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Tuesday, January 31, 2012

Inside Knowledge: Taiwanese Bike Companies and The Costs of Chinese Manufacturing

Bicycling IQ has a very good article up on the exodus of smaller Taiwanese bicycle component manufacturers from China as structural increases make doing business in China less of a profitable endeavor. The problem for these companies is in finding competing economies of scale.

Courtesy of the China-Taiwan cross-strait economic cooperation framework agreement (ECFA), tariffs on bicycle imports between the two countries have dropped from their previous levels of 12%, to 0% this year. The ECFA has been well-received by Taiwan-based makers of higher-end bicycles; but mostly those who had previously added mainland infrastructure to their manufacturing arsenal, years before they caught a whiff of earnest free trade discussions. They can now toggle their operations almost effortlessly between the two countries, depending on demand and client need. Other, smaller, OEM’s may struggle to compete against such flexibility in a declining global market.

The whole article is really intelligently thought out and is worth a read.


In other news, Giant has apparently won a bid to supply the city of Taipei with a system of bicycle rentals. Details of the winning bid or competing proposals are scant, but it appears Giant has its work cut out for it. This must be good news for Giant's President and Founder, King Liu, who also serves as a special advisor to the Taiwan's president Mr. Ma Ying-jiu.

The You Bike program aims to:
  • Promote Taipei City's image as an eco-friendly international metropolis
  • Create new tourism opportunities in Taipei
  • Improve residential quality of life and citizen satisfaction
  • Reduce the use of cars and motorcycles to improve air quality and transportation
  • Encourage people to take up cycling
  • Transform Taipei into Taiwan's capital of cycling
It is this writer's belief that the Taipei city government will have to do much more in providing city-wide bicycle infrastructure to make this project more than leisure rentals along bike paths. The city will need to provide a safe cycling environment, enforce traffic laws, provide safe storage facilities, retrofit busses and MRT cars for bicycle transit, increase the number of bicycle ONLY lanes and many other projects before this projects can begin to benefit Taipei residents. Lots of work to do before putting bikes on the roads.


The Ritte Stuff: Taiwanese R&D

Wired Magazine has published a great article on Ritte Van Vlaanderen bikes, and how the company built itself up backwards.

Apparently, the company started as a joke to make a less obnoxious jersey, and then it grew into producing bikes using Taiwan's R&D.

My favorite part is this:

Canon was at Interbike, the annual bike biz bonanza, three years ago when he hooked up with a Taiwanese firm that specializes in carbon fiber bicycle engineering and manufacturing. (Canon refused to name the company because he doesn’t want competitors cribbing from his business plan.)

“They had a prototype frame that was amazing,” Canon said. “I convinced them to build me 20 bikes. I went out and presold them at cost, then presold 50 more.”

Although he concedes his Taiwanese partner designed “95 percent” of the first-gen Bosberg, Canon insists Ritte called the shots on later models.

“We have a lot more control over the design,” he said. “I’ve designed the new Crossberg. We’ve completely redone the tubes.”

And, he argues, Ritte isn’t doing anything many of the bigger companies aren’t doing too – outsourcing to experts. The way he sees it, he can’t match the expertise of a company specializing in carbon fiber design and manufacturing, so why try?

I find his honesty refreshing. You don't get all the marketing junk about the team of Italian engineers or the bestestest most laterally stiff, yet vertically compliant... blah blah blah.

Taiwan has a great reputation for not just producing, but also engineering some of the best frames available. Lots of open moulds out there begging for a brand to stand behind them.