A five percent increase for Interbike 2000! As we reported last month, the 2000 Interbike Show was very successful. In an October 8 press release, Interbike reported record attendance with over 20,000 industry personnel representing more than 1,000 exhibitors and 4,200 specialty bicycle retailers. This is an increase of approximately five percent over 1999 attendance. 

A good year in 1999 and a good selling season in 2000. This increase in attendance at the largest U.S. bicycle trade show is a positive indication of, first, a good year in 1999 and secondly a good high selling season in 2000. This has all contributed to the positive attitude and optimistic atmosphere at this year’s Interbike. The statistics behind this positive attitude reflect some very interesting shifts in bicycle product sourcing. 

The U.S. is largest net importer of bicycles. As I have reported in this column, the U.S. has become the largest net importer of bicycles in the global market. The Bicycle Council has compiled the following statistics covering the U.S. Bicycle Market from 1992 through 1999: 

Table 1:  U.S. Bicycle Market 1992 – 1996 Actual, 1997 - 1999 Estimated

Prepared by The Bicycle Council

Total U.S. Bicycle Market, All Wheel Sizes (1,000 Units)

*Excludes exports

Sources:  USITC, Investigation 731-TA-731 (Final), Table IV-3 for 1992-1995

               BMA and U.S. Department of Commerce Import Statistics for 1996

               The Bicycle Council estimate for 1997, 1998 and 1999

Ten percent increase in U.S. market consumption last year. In 1999 the U.S. market consumption of new bicycles increased by 10.4 percent over 1998, the largest annual up-tick since the nine percent increase posted in 1993. U.S. net domestic production (less exports) represented only 6.3 percent of total U.S. market consumption in 1999, and imports occupied 93.7 percent of the U.S. market. 

Domestic production decreases. As has been reported in the U.S. trade press, domestic production was estimated as decreasing 45 percent in 1999, or by 911,000 units. At the same time bicycle imports increased 18.5 percent or by 2,556,000 units. This shift from domestic to import sourcing of bicycles started in 1996. It should be noted at this point that U.S. bicycle brands have changed position in the market over this same timeframe – but the sourcing shift is primarily U.S. domestic companies moving production, in a variety of ways, from the U.S. to foreign manufacturing. The sourcing shift is definitely not driven by foreign brands gaining greater penetration or market share in the U.S. market. 

China is largest source country. It comes as no surprise that China is the largest source country for bicycles that are imported into the U.S., followed by Taiwan, Mexico and Hong Kong. It is also reasonable to combine the bicycles originating in Hong Kong with those from China, which drives the total for this source very close to 80 percent of total U.S. imports.

Eight-month year-to-date imports. Table 2 was developed from U.S. Department of Commerce import statistics and covers the most current (eight-month) year-to-date bicycle imports from the top four source countries and the grand total for all imports. Bicycles are imported from a total of 24 countries – but the top four countries, as listed below in Table 2, represent the vast majority of the units with 99 percent of the grand total.

Table 2: Total U.S. Bicycle Imports from Top Four Source Countries Eight Months Year to Date

Prepared by Jay Townley & Associates, LLC- August 2000

Source: U.S. Department of Commerce Import Statistics

Taiwan has high average unit value. Average unit value is a very good indicator of a number of product attributes, but since Table 2 is a composite including all wheel sizes, the average unit value generally indicates that the majority of U.S. imports originating in Taiwan are destined for the specialty bicycle dealer channel of trade. This isn’t to say that some of the bicycles originating in China and Mexico are not also headed for specialty bicycle retail sales floors, but the striking difference in the average dollar value between Taiwan and the rest of the top four source countries leaves little or no doubt that Taiwan is the source for higher cost dealer quality bicycles in the U.S. market.

Table 3:  Total U.S. Imports Eight Months Year to Date

Prepared by Jay Townley & Associates, LLC

August 2000 compared to August 1999

Source: U.S. Department of Commerce Import Statistics

2000 compared to 1999 imports. Table 3 provides a comparison of Total U.S. imports eight months year-to-date 2000 compared to the same period a year ago. Total U.S. imports from all source countries are up 27 percent, or by 2.9 million units, and come to a little over US$95 million, an increase of 16 percent in total dollar value.

What is the U.S. bicycle market forecast for 2000? Thanks to The Bicycle Council (TBC) we do have a current forecast for the 2000 U.S. bicycle market, as presented below in Table 4. According to TBC the U.S. bicycle market is estimated to increase by just less than 4 percent, to 18.1 million units by the end of this year.

Table 4:  U.S. Bicycle Market 1997 - 1999 Estimated, 2000 Forecast

Prepared by The Bicycle Council

Total U.S. Bicycle Market, All Wheel Sizes (1,000 Units)

*Excludes exports

Sources: The Bicycle Council estimate for 1997, 1998 and 1999/ The Bicycle Council forecast for 2000

U.S. consumption of domestically produced bicycles will continue to decline and consumption of imports will continue to increase, as has already been indicated by the eight month YTD import statistics. The actual increase for eight months is 27 percent in imported units, but this rate of increase may very well decelerate with the slowdown in the economy and retail sales during the third and fourth quarters of this year. 

Accordingly, the TBC forecast of a 4.5 percent increase for imports and 3.6 percent for the overall U.S. bicycle market in 2000 is intended to be conservative in the light of current and potential slowing of the economy between September 1 and December 31, 2000.

The good news is that 2000 is forecast to be another good year for the U.S. bicycle market, even with an anticipated slowdown in the economy!

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