Bicycle “pandemic” has been brought on by the outbreak. Since this year, the price of upstream raw materials used in the bicycle industry has increased dramatically, pushing up the cost of various bicycle components and accessories such frames, handlebars, gears, chain cleaner tool, bicycle repair tools and bowls. Local bicycle makers have begun increasing their prices as a result.
The cost of raw materials has increased significantly, forcing bicycle makers to raise product costs.
The writer met the supplier of bicycle components who was delivering to the whole bicycle factory in Shenzhen, a business that sells bicycles to consumers. The supplier revealed to the reporter that his firm mostly fabricates shock forks from raw materials such as aluminum alloy, magnesium alloy, steel, and other metals for bicycle companies. This year, he had to passively alter the supply price due to the rapid growth in raw materials.
The cost of raw materials for the bicycle industry has historically been extremely constant, with few noticeable fluctuations. But since the start of last year, the price of many of the raw materials required to make bicycles has increased, and this year the price has not only increased but at a faster rate as well. Executives at a bicycle consumption company in Shenzhen told reporters that this was the first prolonged period of rising raw material prices they had ever encountered.
The cost of raw materials keeps going up, which causes bicycle businesses to incur large cost increases. Local bicycle consumption businesses were forced to change their car manufacturing prices in order to relieve the cost pressure. However, because to the intense market rivalry, many businesses still experience significant operational stress from increased expenses since they are unable to transfer all of it to the market for downstream terminal sales.
The manager of a bicycle tool manufacturer in Shenzhen claimed that the price was increased by more than 5% twice this year, once in May and once in November. Never before had there been two annual adjustments.
According to the person in charge of a bicycle shop in Shenzhen, the price adjustment for the whole line of items began around November 13 and increased by at least 15%.
Businesses that manufacture bicycles concentrate on designing medium- and high-end models in the face of many unfavorable conditions.
The cost of acquiring raw materials is rising, as are the expenses of export transportation, among other unfavorable circumstances, making the bicycle industry’s competitiveness extremely fierce and testing businesses’ operating capacities. To absorb the effects of unfavorable variables like the increase in raw material prices, several businesses have taken advantage of the market need, expanded innovation, and aggressively prepared for the mid- to high-end bicycle market.
Because earnings are relatively high and the consumption of mid- to high-end bicycles is the primary objective, this sector of the bicycle consumption industry is less affected by rising freight and raw material costs than other significant portions of the industry.
According to the general manager of a bicycle business in Shenzhen, the firm mostly produces mid- to high-end bicycles made of carbon fiber, with shipping costs of around 500 US dollars, or about 3,500 yuan. The reporter encountered Ms. Cao in a bicycle store in Shenzhen when she was there to purchase a bicycle. After the pandemic, many young people around, like her, began to love riding for exercise, Ms. Cao told the reporter.
While it is acknowledged that consumer demands for bicycle products, such as functionality and shape, are gradually increasing, many bicycle manufacturers face fierce market competition and are concentrating on making more competitive mid- to high-end bicycles while planning for relatively high profits.
Post time: Nov-14-2022