Bicycle Industry

Cycling iQ Twintel | 18 – 24 March 2012

In this week’s edition of Twintel: Giant and Merida shareholders watch paper fortunes rise and rise; whilst Sonova shareholders go after Director, and BMC owner, Andy Rihs. Tour of China doubles up. New market entries by Boardman and Specialized. Team Sky does its own bike reviews, and Flight Centre Limited’s bike sales take off.

 

SUNDAY, 18 MARCH

With so many changes to the 2012 UCI AsiaTour calendar – as mentioned in last week’s Twintel – it was utterly confusing to see two separate UCI2.1-ranked ‘Tour of China’ stage races in the most recent calendar update. Cycling iQ approached the UCI and the ToC organiser for an explanation and received the following replies:

Enrico Carpani, UCI Communications Director
“Regarding Tour of China, they just split the race in two parts, in accordance with the wishes of the UCI Road Commission for shorter stage races and also to avoid too long transfers. Therefore, in 2012 we will have two Tour of China, with different teams and both with a final overall ranking.”

Rio Sun, Media Dept., Tour of China OC
“Because of the time length of Tour of China 2012 is much longer thant the year 2011, we provide two options when submmitted our application to UCI. One is all match days without rest day among them, the other option is we split it into Tour of China 1 and Tour of China 2, and they are practically one tournament.  There will be only one team champion and also the same for the 4 jerseys.”

Still confused?

Also, Tour of Beijing and Japan Cup are not shown on the 2012 UCI AsiaTour calendar for very simple reasons, which yours truly overlooked. The former is a WorldTour event (hence a separate calendar) and the latter is in October; the beginning of the 2012/13 calendar and also a new financial year in Switzerland.

 

MONDAY, 19 MARCH

Initially spotted at Taipei Cycle show: Chris Boardman recently added Acme Sports Marketing Co in Taichung, Taiwan, to distribute his eponymous brand of bicycles into the mainland. The former World Hour Record holder and Tour de France maillot jaune wearer had initially given Wiggle near-exclusive worldwide rights to distribute his popular bikes into far-reaching parts of the globe. It remains to be seen whether the UK e-tailer will continue selling Boardman bikes into the world’s (soon to be) biggest consumer market.

The European Union has launched a 15-month long review into whether punitive anti-dumping duties on Chinese-made bicycles and parts imports should be lifted. Following last-years decision by the EU Commission to uphold the 48.5% impost for another five years until 2016, new evidence has reportedly been discovered which would render the tariff’s basis “irrelevant”. Referenced link

Deminor SCRL, a Brussels-based specialist in shareholder damage recovery has, on behalf of its clients, taken action against Sonova Holding AG (formerly Phonak Holding AG) and Sonova Board Director Andy Rihs for allegedly failing to give sufficient notice of an impending sharp dive in the hearing aid manufacturer’s profits. Rihs, owner of Swiss-based bicycle manufacturer BMC, had already stepped down as Chairman of Sonova in March 2011 following accusations of insider trading; he had earlier cashed in stock options before the profit warning that Deminor’s clients apparently would have benefitted from. Referenced link

The UCI issued a WorldTour national rankings update during the week, to which Cycling iQ thought a little more information (population and number of WT riders representing each country) could be added (above).

Giant and Merida, the world’s two largest bicycle producers, are listed companies on Taiwan’s stock exchange. After both manufacturers lost ground in 2008/09 – which was almost impossible to avoid for any publicly-traded business – share values have bounced back and beyond. A detailed article will be published in the next week.

 

TUESDAY, 20 MARCH

Whilst researching for a Cycling iQ article on Cannondale’s investment into Japanese cycling, I came across a very good Cyclingnews Asia interview with former Cannondale VP, Scott Montgomery. Credit to interviewer Robert Lamb for the broad range of questions. Referenced link

 

WEDNESDAY, 21 MARCH

Following the July 2010 Economic Co-operation Framework Agreement between China and Taiwan, a gradual removal of duties – which finally fell to 0% on 1 January 2012 – on cross-trade bicycle imports has materially increased Taiwan’s bicycle exports into China; and is beginning to have the same affect vice-versa.  Referenced link

 

THURSDAY, 22 MARCH

When Future Publishing (owner of Cyclingnews.com, Bike Radar, ProCycling, etc, etc) partnered with Colnago two years ago to “reinvigorate (Colnago’s) brand and mastermind a new marketing campaign for 2010 and beyond” the distinct fields of journalism, news, advertising and marketing blurred into one. On paper, this type of alliance made perfect sense, but caused concern amongst readers that Colnago-related news and advertising would be one in the same. Two years on, we can each make our own conclusions about the various commercial decisions of mainstream cycling news sites and the impacts on content.

Why is this of any consequence? Well, its been especially interesting to see professional cycling teams become news platforms. Many teams now pump out their own news faster, and with more insight, than many large cycling websites who simply don’t have the same level of access to riders. BMC Racing Team and GreenEDGE are perhaps the best examples of teams that have created virtual media entities within their marketing divisions. This then paves the way for co-marketing opportunities like the one between Team Sky pro cycling team and its bicycle supplier Pinarello. Referenced link

Taiwan Economic News (CENS.com) does a great job of covering the fortunes of Taiwan’s listed bicycle manufacturers. CENS reported earlier this week that Giant and Merida are expecting year-on-year sales growth of 30% this year. Referenced link

 

FRIDAY, 23 MARCH

Cycling iQ spoke with Specialized’s Director of Business Development, Joe Wheadon, on Friday after learning of the company’s imminent move into the Indian bicycle market. To date, Specialized has had zero exposure in India. Interestingly enough, Merida – a key Specialized stakeholder and manufacturing partner – also entered the market recently. Whilst Cycling iQ is sworn to secrecy for now, more will be revealed very soon.

 

SATURDAY, 24 MARCH

Bike Europe, a bicycle industry publisher based in the Netherlands, always has its fingers on the local pulse.  John Fentener Van Vlissingen, “a descendant of an illustrious family of entrepreneurs”, purchased a 5.19% stake in Accell Group NV (holding company of many bicycle brands, including Lapierre and Ghost,) recently. The timeline above shows just how easy it is for my mind to wander into related industry chit-chat – this time explaining the connection between Lapierre and Australia’s largest travel agency. Referenced link

In the five years since 2007, BMC has evolved from a smallish company with 40-50 employees into a “BMC Group of Velo Friends” with a headcount exceeding 250. Correspondingly, the professional cycling team and infrastructure owned by the Grenchen (Solothurn, Switzerland) based bicycle company continues to grow and grow. The latest initiative is a joint BMC Racing Team service course and shop in Belgium, due for completion in the first half of 2012. Link

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