Market Talk

This week: Indonesia’s tight deadline for new Asian Games velodrome; Oil prices impact Astana Pro Cycling Team; Netherlands the EU’s largest bicycle exporter in 2015; Giant planning to go direct in India?; Trek Bicycle’s NZ subsidiary now official.

Market Talk is a collection of market intelligence from across the Asia-Pacific selected to educate and inform anyone interested in understanding the APAC bicycle industry, its key players and the business behind the machines.  


INDONESIA’S TWO-YEAR DEADLINE FOR 2018 ASIAN GAMES VELODROME

Jakarta-based property developer PT Jakarta Propertindo (Jakpro) is confident it can deliver a new indoor velodrome two months ahead of the official opening ceremony of the 2018 Asian Games.

Following a USD40m tender process, Jakpro – a Regional Owned Enterprise (ROE) – awarded UK-based ES Global with the contract last month. Australian architectural firm Cox Architecture, who has also designed the velodrome for the 2018 Commonwealth Games, has been tasked with designing and managing pre-fabrication of the 3’000-seater Velodrome Rawamangun.

2018 Asian Games velodrome concept

The timeframe is unusually tight because Indonesia only became host of the 2018 Games in August 2014, following the late withdrawal of original host Vietnam. Vietnam was appointed as the host of the 18th Games in late 2012, but informed the Olympic Council of Asia of its withdrawal in April 2014, citing financial constraints.

As the Jakarta Post reports, the velodrome is only one of many Games infrastructure projects which Indonesia needs to complete ahead of the August 2018 opening ceremony.

 

OIL PRICES IMPACTS ASTANA PRO CYCLING TEAM

The global oil price slump is impacting Kazakhstan’s sports teams, with Astana Pro Team’s funding dropping in “real terms” according to a news report from Tengri News

2016 Tour de Langkawi stage 4 Astana lopez

The funding problem is a by-product of sharp depreciation to the Kazakhstani Tenge, according to the manager of a sovereign wealth fund which has been monitoring the situation. The UCI WorldTeam reportedly receives USD18m in annual funding from the Astana Presidential Sports Club, which was set up in 2012 by Kazakhstan’s President Nursultan Nazarbayev to boost the nation’s profile.

 

NETHERLANDS EUROPE’S LARGEST EXPORTER OF BICYCLES

The Netherlands leads Germany and Belgium as Europe’s largest exporter of bicycles, according to 2015 data released earlier this month by Statistics Netherlands (CBS).

2015 European Union bicycle exports

According to the news release, the value of the Netherlands’ 2015 bicycle exports increased by 14% compared to the previous year, reaching a total value of EUR793m. Germany was the EU’s second-largest exporter by value, sending EUR708m worth of bicycles abroad in 2015. Belgium was a distant third, exporting EUR205m worth of bicycles.

The report also claims that the Netherlands was ranked third in the world for bicycle exports in 2015 (behind China and Taiwan), while the “bulk” of bicycles exported by the Netherlands are manufactured domestically.

CBS is an independent Government body responsible for compiling official national statistics. Part of its scope is to also compile and publish statistical information data from the EU community

 

HINTS THAT GIANT BICYCLES WILL GO DIRECT IN INDIA?

Times of India reports that Starkenn Sports Pvt Ltd, the exclusive distributor of Giant Bicycles in India, is seeking to focus completely on its own range of Starkenn brand bicycles in future.

Starkenn Giant

“We have learned a lot through international brand tie-up (with Giant), but now we are trying to create everything in Starkenn,” Starkenn MD and CEO, Pravin V Patil is quoted as saying in the article.

Asked whether or not Starkenn would be looking to establish a separate business in the future, Patil replied “No announcement as of now. But yes, that is the direction.”

Though the brief TOI article doesn’t dig deeper into the strategy behind Patil’s comments, his statements could indicate a commercial divergence is in the pipeline; either prompted by Giant itself as part of a mid-term distribution exit strategy, or by Patil as he seeks to claw back margin in a market that will only become more aggressive.

 

TREK BICYCLES’ NEW ZEALAND SUBSIDIARY NOW OFFICIAL

As first reported here in early March, Trek Bicycles has confirmed it will be opening up a branch office in New Zealand with support from its Canberra-based Australian subsidiary. The move comes after a 23-year relationship with existing distributor Cycle Sport New Zealand, which is owned by former national cycling coach Ron Cheatley.

Treks Bike logo

Bicycling Trade published excerpts from the official press release, which states Trek Bicycles Australia will take over the management of New Zealand’s Trek bicycle retailers from 01 July.

“By going dealer direct in New Zealand, Trek will be able to make full use of their global infrastructure and give our New Zealand customers access to a wide range of value added services, as well as a full line of best in class products.

Trek is currently in the process of making some key hires to support its NZ growth targets, with additional positions expected to be announced in future.

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