The Taiwanese bike industry grouping known as the A-Team said the members’ exports grew by only 1.25 percent in volume last year, but the total export value jumped by 32 percent. At its annual general meeting, held during the Taipei International Cycle show on March 18, the chairman of the A-Team, Michael Tseng of Merida Industrial, said the growth in average unit value was due to the efforts of the industry group to invest in upgrading quality and introducing the TPS (Toyota Production System) and other manufacturing techniques at member companies. Most of the member companies’ exports are shipped to Europe.
Tony Lo, the former chairman of the A-Team, confided that sales to Europe had begun to dip in the last quarter of 2008 and that 2009 was shaping up to be a challenging year, or at least a return to the norm after three years of boom. He was confident that the industry would survive the current crisis, as bike sales continue growing worldwide due to concerns about health and the environment.
Formed at the beginning of the century as bike manufacturing was moving en masse to China, the A-Team was a collective effort by Taiwan’s bike industry to promote and preserve high-end production on the island. A core of prominent assemblers and parts makers led by Giant and Merida studied advanced production techniques from TPS to TQM, while also shifting focus from OE manufacturing to ODM and original branding. The bike industry in Taichung is now getting its own wind-tunnel facility to test and further develop aerodynamics.
Largely due to the 48.5 percent EU anti-dumping tariffs on Chinese-made bicycles and parts, seven out of every 10 bikes exported from Taiwan are shipped to Europe. In 2007, Taiwan sold 3.1 million bicycles in European markets.
The consensus outlook for 2009 is that the low-end and high-end segments of the market will be hit hardest by any slump in consumer spending, but this will not be confirmed until the results of the spring sales season are gathered. Incidentally, Taiwan’s industry has also been lifted by an extraordinary domestic cycling boom, with sales growing by around 60 percent in the last year. The group is hopeful that other Asian markets will also catch fire to compensate for the anticipated fall in European sales.
The A-Team has grown to include 22 member firms from Taiwan, as well as five associate members. Members include Velo, Kenda Rubber, Sram, and associate members such as Dahon and Specialized. Fiercely competitive domestic rivals, these companies recognized the need to raise their game in the face of cut-throat price competition from domestic Chinese manufacturers. A-Team member firms must maintain their R&D facilities in Taiwan and throw open their factories to fellow members for mutual study. Moreover, the group fostered cooperation between assemblers and parts makers.
The group’s efforts have already been instrumental in raising average export prices from US$98.09 in 1998 to US$221.90 in 2007. In the third quarter of 2008, exports to the EU by the industry as a whole amounted to US$167.9 million, up by 35 percent compared with the same period the year before, with the average sales prices up by 37 percent to US$212.75. While Tony Lo emphasized manufacturing improvements in his six years as chairman, Michael Tseng is focusing on shortening lead times from 10 to seven days, as well as strengthening original branding and marketing.
