Bruised Bicycle Bellwether: Giant Reeling in China Market

China, once the most promising bicycle market is now a heavy burden for Giant harming the company’s financial results. There are even no signs for improvement as Giant points to China’s slow economy. Even the country’s booming bicycle sharing systems, in which Giant is involved directly as well as via its own bicycle sharing program YouBike, could not give much financial relieve.--Bike Europe (11/14/2017)

The bicycle industry is already suffering with multiple pressures from a shift in retail channels to currency exchanges and cultural change in areas traditionally more favorable to higher-end cycling equipment. For most of a decade we have heard one of the industry leaders beating the drum for Taiwan's economic (and political) integration with the People's Republic of China. 

Or as Ralph Jennings wrote in 2009:

TAICHUNG, Taiwan (Reuters) - Economic powerhouse China and export-reliant Taiwan, political rivals for six decades, agreed on Tuesday to negotiate a trade deal that would cut tariffs and bring the two sides closer. 

Of course ECFA was never intended to be entirely about economic, but rather a means to rein in Taiwan's independence, which is supported by a vast majority of the population, in creating an economic dependency with deep political implications. 

ECFA garnered vocal support from Giant Manufacturing and Ma Ying-jeou's re-election campaign even saw then Giant chairman, Anthony Lo, issue a last minute vote of confidence to Ma's Kuomintang Party in the closing days of the election with an urgent call for support of his China-centered policies. He continued to remain bullish on Ma's vision and brushed the issue with tones of urgency. 

In 2010 Giant put its money where it's mouth was. 

According to reports from Taiwan media, appreciating the huge potential of the mainland market after the signing of the ECFA, Taiwan Giant Global Group plans to strengthen the capability and competitiveness of the mainland headquarters this year by launching a new investment plan to invest an initial RMB 1.16 billion for the establishment of the Bicycle Industrial Park in Kunshan, Jiangsu Province.

Reports disclosed that with the expansion of the market, Giant Global Group will increase its investment to raise its market share in the mainland bicycle market. Based on its original SUV brand GIANT, the Group will vigorously develop a new brand MOMENTUM to raise the market share of passenger vehicles. The medium-priced brand will be aggressively promoted through about 2,000 distribution channels.

Giant Global Group plans to increase its investment to build a bicycle plant in Kunshan, which has gained great support from the mayor of Kunshan Guan Aiguo. The 40-hectare new plant will consist of plants for bicycles, frames, carbon fiber and electrical vehicles. Besides, the cycle track & bicycle theme park plan will also be pushed forward. The investment in the initial stage amounts to USD 36 million (NTD 1.16 billion).
Reports disclosed that with the expansion of the market, Giant Global Group will increase its investment to raise its market share in the mainland bicycle market. Based on its original SUV brand GIANT, the Group will vigorously develop a new brand MOMENTUM to raise the market share of passenger vehicles. The medium-priced brand will be aggressively promoted through about 2,000 distribution channels. 

Giant Global Group plans to increase its investment to build a bicycle plant in Kunshan, which has gained great support from the mayor of Kunshan Guan Aiguo. The 40-hectare new plant will consist of plants for bicycles, frames, carbon fiber and electrical vehicles. Besides, the cycle track & bicycle theme park plan will also be pushed forward. The investment in the initial stage amounts to USD 36 million (NTD 1.16 billion). (6/2010)

Giant's self proclaimed "Godmother of Women's Cycling", Bonnie Tu, doubled down on ECFA and the China market. According to a Bicycle Retailer article (7/2010), Tu could barely suppress her enthusiasm for the post ECFA China boom.

Bonnie Tu, Giant Manufacturing’s chief financial officer, told the Financial Times the agreement could help the company better manage its production. Giant has factories in Taiwan and China. Giant builds its high-end bikes, particularly carbon fiber, in Taiwan. Lesser value models are made in China. 

“If there is no tax issue, we can really integrate our factories and shuffle production as we like,” Tu said. “China’s economy of scale for high-end bicycles could be really big,” she added.

This despite the beginnings of a quiet exodus of Taiwanese firms from China. 

“Our future lies in China and one of our goals is to develop this rapidly expanding market”, said Tony Lo, CEO of Giant Global Group at the press conference hosted by the Taiwan External Trade Development Council (TAITRA) at last week’s Eurobike show. “The best platform to build up this emerging market is the Taipei Cycle Show which is taking place from March 7 – 10, 2012,” said Lo.-- Bike Europe (8/2011)

... and later: 

Anthony Lo (羅祥安), chief executive officer of local bicycle maker Giant Global Group (巨大集團), said the government needs to establish a vision.
“What Taiwanese enterprises want to see is the government striving to help businesses build unique brands that can provide innovative products and services,” Lo said on the sidelines of the forum. 

Lo said Taiwan needs to integrate into regional markets as soon as possible so local firms can enjoy the trading privileges that other nation’s companies do, such as tariff exemptions. 

“The markets are changing so fast that the rules have been reset, and if we don’t catch up, it is going to be harder for us to hold our own in the global market,” he added.--Taipei Times (4/3/2013)

The China market has been a quagmire for some time and several indices have highlighted this situation.

The Chinese market for Taiwanese bicycles declined by 33% to 79,000 units. Though not yet that large, the Chinese market was seen as a main growth market for several years. This development has now stopped due to the economic decline in China.--(11/17/2015)

This past year Bicycle Retailer reported:

The weak link in global sales for Taiwanese companies, including Giant, remains China. "Giant China's performance continues to suffer from soft demand and the popularity of bike sharing, which affected sales recovery in the first half," Giant said. 

China's infatuation with bike sharing has forced companies like Giant and Merida to close some company-owned stores as retail sales have plummeted, particularly for higher end models. Independent shops have also been hurt by a lack of demand brought on by bike sharing. 

Still, Giant said it believes its co-sponsorship of pro-cycling's Team Sunweb, and its performance in the Tour de France and the Giro d'Italia, has elevated its global brand awareness and will drive future demand, especially for its carbon frames and accessories.
"Looking forward to the second half of the year, Giant projects Europe and the U.S. will continue its growth momentum," the company said. However, it cautioned that unpredictable exchange rates as well as continued turmoil in the Chinese market would be of concern for the remainder of the year. 

But if we just wait a bit longer...maybe China will do us a solid....

Training to Climb in Hsinchu: The Magnificent 竹37

Nothing begs for a bike ride more than a clear weekend in October. For many places around the globe late October means the best riding weather is long gone. For us in Taiwan, it means the best three months of cycling are upon us. By mid-October the heavy coat of humidity has blown away, the threat from a passing typhoon is greatly reduced, and the skies glimmer with bright warm sunlight. This is the season to ramp up the training and get into some kind of shape before getting sick and starting all over again.

For this weekend I knew I wanted to get out and beat my legs up a bit to better recover from my three-month summer layoff. I have also been itching to spice up my love affair with Taiwan's shapely roadways with a little something new in an area I rarely get the opportunity to explore. The map was telling me Hsinchu was that place and the 竹37 was the route.

The 竹37 starts in Beipu, the little urban outpost along the Highway 3 where the foothills begin their vertical transition into mountains. The attraction of the 竹37 was that it appeared to traverse a longitudinal ridge line from Beipu to the scenic Nanzhuang area. The road appeared long enough and put the wind at our backs. The trick was how to get there.

In a flurry of overnight texting, we had assembled a small group of riders with Dom, Matt and I taking the HSR to Hsinchu, while Michael and Mike Surly took the local train to Zhuzhong Station. It was set. Taiwan's train system puts so much within reach of a viable day ride.



After a quick stop for coffee and fuel in Zhuzhong, we hit Kehu Rd. through the rippling foothills of Hsinchu. The entire area is a labyrinth of criss-crossing rural roads that traverse the deep gullies and estuaries of hill country. While it may be impossible to build a straight road among the ocean of steep inclines, it is possible for local governments to provide proper signage. Don't worry, they didn't. It can be very easy to get lost in the maze with several roads splitting and leading to the same destination...or not. The horizon is just layer upon layer of stacked ridges echoing off into the distance.

We took our time to check our bearings and avoid any unnecessary climbing. On a day when you have already accounted for some vertical pleasure, anything that isn't necessary becomes a worrisome burden.



Along the way there are a few roadside treats as this area seems to be a favorite among local cyclists and day tourists.



The climbs to Beipu are short, sweet, but no less taxing. There are a couple of memorable grades among the rollercoaster of farming roads.





The road coasts into Beipu and a little slow rolling toward the back of town can find the drop into a wide valley to the lower reaches of the 竹37, which is also posted as 大坪路 and 大林路. This is an excellent place to grab snacks and water for the ride as the interior has plenty little in the way of refreshments except for a single roadside store that hawks wieners and dry sundries to weekend cold spring goers.



As we advanced a kilometer or two up the road, Michael and I both had the dragging feeing of disappointment wash over us as we realized we had already ridden it before and the sparkle of a new road for the books had been tarnished by the familiar roadside peculiarities. It wasn't that there was anything wrong with the road. It is really quite beautiful with some interesting attractions, but we were lacking the mystery. I was sure we hadn't taken that road to Nanzhuang and we pushed on with hope that we would soon out climb the familiar for a taste of something new.



After having strung out over a kilometer of lovely two-lane asphalt bordered by verdant walls on all sides, we reconvened at a "T" intersection where a smaller road slithered into the sunlit greens of the hill above. This was our 竹37.



The 竹37 to Nanzhuang starts as a lane and a half footnote to the larger road below. It bucks and zags upward past the crumbles of Japanese era infrastructure that once helped support forestry and mountain agriculture.

As the road continued upward it narrowed to a single car's width and became more interesting at every bend. There was little traffic and few dwellings save for a B&B and a Tears of Guanyin temple where believers filled plastic bottles of spring water from beneath a towering fiberglass statue of the deity.



After the Guanyin statue the 竹37 becomes more like a well paved bicycle path that flits through shaded cedar groves and tall trees. There are still some cedar harvesting operations in the area and it gives the area a strange sense of displacement. On one corner banana leaves brush your ears, the next a grassy clearing, and then the bend ahead reveals the tall red trunks of evergreens--like a page from a  scrapbook of Taiwan's rural landscape all within a few minutes.



The road began to open up again as we pushed skyward out of a small highland marsh and up to the crest of the hill. The scenery was incredible, but light conditions made for poor photography. From the high point we could look down on Nanzhuang and the mountains high above. That really is a lovely area.

After a short rest we screamed down the hill onto the 苗21, which is also a fantastic cycling road that leads to the Xiangtian Lake area. It is all well worth the price of exploration. After a lunch and siesta at the Family Mart in Nanzhuang, our little band split into two groups with one group seeking a straight decline toward Zhunan Station, and the other still game for more altitude staying on the 苗 24 to the Highway 3 at Shitan. I elected to go with the latter group and abuse my legs some more on the hills.



I had forgotten how much of a climb that 苗24 had been. Actually, I had only ever ridden it in the opposite direction and I distinctly remember thinking on the descent, "Wow, I am glad I am not coming up this thing...."

The lower sections are a little more merciful. The worst part is the onslaught of weekend tour busses. After a bit more altitude the busses disappear but the climbing remains. It is a hill where it pays to just find a steady cadence that you can stick with and then let the legs roar.



As I capped the summit I stopped for a few shots of the hills on the western side of the Highway 3 before rolling into the parking lot of the famous Lingdong Temple. It makes a nice place to grab a drink or snack, but you need to allow for tourist prices.

On this day it was the rare case of the ascent being more fun than the descent as we got stuck behind a line of braking cars and severe crosswinds.



We eased onto the Highway 3 and into the jet wash of the winds from the northern monsoon. Had we decided to turn tail and ride back to Taichung it would have been cake to just sit upright in the saddle and let the wind do all the work. Alas, we opted to cut across the Mingde Reservoir on the 126 to Miaoli City and then hop the HSR at the new Miaoli Station.

After a few more climbs and a duel with crosswinds, we had logged around 100k and 2000m of climbing.

Most of all we had ridden a true gem of a road that proved to be satisfying in its beauty, challenge and range. What a buzz!



Read Michael Turton's Ride Post: HERE

Cycle Route 4247189 - via Bikemap.net