In his latest report to the US-equivalent to the ACT – available as a PDF download, below – trade consultant Jay Townley states that things are looking slightly brighter for the bike trade:
"With the war reaching its effective conclusion the US economy and the bicycle business can return to modest growth and a mild recovery."
However, retail analysis aside, Townley’s report is notable for its praise for the A-Team initiative, a cross-industry ideas bank founded by Giant and Merida, and eleven Taiwanese component makers. The A-team founder members will remain static for this year but new members will be admitted – subject to board approval from next year onwards. Non-Taiwanese suppliers can also join, but they must have manufacturing bases in the country.
The A-Team is aiming to incubate a high added-value global market for bicycles, "transforming the Taiwan bicycle industry into the preferred global source for the highest quality, most innovative bicycle products available though a rapid response Just-In-Time manufacturing system focused on the world’s specialty bicycle retailers," said Townley.
"The A-Team plan has been well thought-out. The goal sounds lofty – but the A-Team vision of building the future of cycling through the power of partnerships and innovation [is] not only strategically correct but also ultimately achievable. This [is] no pie-in-the-sky vision without substance. In my opinion, it has every chance of success."
One of the main visions is 24 inventory turns per year. By 2005.
Townley believes this will improve "specialty bicycle retail channel efficiency [and that in turn] will benefit everyone from component manufacturers, bicycle manufacturers, and distributors."
The A-Team members in Taiwan are to embrace the Toyota Just-In-Time (JIT) system and will use JIT to "leverage the distributors and bicycle dealers from the current 2.5 to 2.8 inventory turns per year to 24 or more inventory turns on new bicycles per year," says Townley.
"By mid-decade the A-Team envisions [IBDs] selling a high value added bicycle to a customer and having the product replenishment order electronically placed through the distribution channel to the manufacturing plant and the replenishment order delivered from Taiwan to the dealer within two-weeks."
Tony Lo, president of Giant, and his fellow members of the A-team, will succeed, believes Townley, because of their passion for all things bike:
"The Taiwan bicycle industry has an absolute passion for the bicycle as a product and as a lifestyle, and is equally passionate about its vision for creating a new high added-value global market for bicycles."
According to the A-Team’s new website, the bike industry has to wake up and smell the coffee:
"All the booms are over. There is a lacking of innovative new products, and the bike markets not only matured and oversupplied, but also start to shrink and losing its vitality, the specialty retailers are losing share to the mass merchandisers, and the only game in town is lower-price, lower quality, no profit. This is like a Racing-to-the-Bottom, eventually consumer will find no interest in bicycle and spend their money elsewhere, leave all of us in the bike business a sluggish, stagnant market without a tomorrow. Something must be done to stop this evil trend, and A-Team is one of the solutions we have come up with."
The A-Team wants to "create a game of Racing-to-the-Top. Striving for manufacturing and operation excellence, deliver the highest quality, just-in-time. Endeavor to deliver more innovative design new products and bring to the market at faster speed, to create a new high added-value market. Collaborate with specialty retailers worldwide, endeavor to develop innovative added-value, high quality products, at reasonable price and margin."
Alex, Dah Ken, Formula, Giant, KMC, Merida, SR Suntour, SRAM, Tektro, Tien Hsin, Velo, VP Components, Wellgo.