Repeated strikes in public transportation, the global pandemic, the increase in bike lanes, and purchase incentives are all factors that have promoted the development of cycling in France over the past two years.
According to the professional association Union Sport et Cycle, bicycle sales increased by 117% between 2019 and 2020. This reflects a genuine bike boom across the country since the end of lockdown.
You have probably noticed that, since May 2020, it has been very difficult to get an electric bike. Whether in mass retailers, specialist stores, or through e-commerce giants, the industry is experiencing a global shortage. We will explain why in this article.
1. A record year
Despite the turbulent times caused by the current situation, bicycle sales continue to soar. The industry is not experiencing a downturn, and electric-assist bikes (EABs) continue to break records. The cycling industry is seeing rapidly increasing demand.
Many countries have made cycling a transportation option in order to observe social-distancing measures after lockdown. This strategy has both accelerated the ecological transition already initiated by the Paris Climate Agreement and promoted new means of transportation to limit COVID-related infections.
Here are some figures illustrating this exponential growth:
- €3 billion in revenue from sales of bicycles, components, and accessories in 2020, representing a 25% increase compared with 2019 (as with the leading Schwinn bike).
- +1.7% in volume, reaching nearly 2.7 million bicycles sold.
- 514,672 EABs sold in 2020, representing 19% of the market: a 29% increase in volume compared with 2019.
- In value, the increase is even more significant: +58% revenue growth. With 56% of total revenue, EAB sales exceeded one billion euros in 2020. For the first time, the EAB market in value exceeded that of conventional bicycles.
- City bikes remain the best-selling category (40% market share), while electric-assist mountain bikes rank second (+46% in volume). The market is seeing growth in folding bikes (+95%) and road bikes (+215%). Even more spectacular, and a testament to changing habits, are electric-assist cargo bikes (+354%, with 11,000 units sold).
- According to CONEBI (Confederation Of the European Bicycle Industry), electric bike sales in Europe are expected to rise from 3.6 million units in 2019 to 11 million in 2025!
- 514,000 electric bikes were sold in 2020, compared with 15,000 in 2008.
2. A disorganized industry
Faced with the scale of the phenomenon and fluctuations in the health situation, the industry is struggling to adapt, going so far as to call the entire production chain into question.
The bicycle industry has been heavily impacted by delivery delays for parts and accessories from producing countries. It is important to understand that a bicycle is an assembly of components that mostly come from the same factories, spread around the world. These producers were all affected by the pandemic, but at different times.
In addition, employees were not always able to travel to work depending on infection rates. All these events are responsible for the extended delivery times we are all experiencing.
The gradual relocation of the cycling market could provide solutions to one of the main challenges: supply. Manufacturers have faced and will continue to face difficulties related to the logistics chain. Demand was anticipated and orders were placed, but suppliers are pushing back their deadlines. On the retailer side, stock shortages occurred quickly, generating significant delivery delays.
Several areas of expenditure have been affected by the health crisis. The first is transportation. A year ago, a container departing from China cost around $2,000; today, the same container costs $8,000. The cost of road transportation in Europe has also increased significantly in recent months.
The second area is the cost of raw materials, which has risen sharply due to the surge in global demand (especially for materials used in electric vehicles) and unfavorable exchange-rate changes for European Union countries.
Will French production make a comeback?
In 2020, nearly 660,700 bicycles were assembled in France, including 261,000 EABs. This is a positive development for jobs and the national economy. Assemblers expect a 40% increase in bicycle production in France in 2021.
When will things return to normal?
Industry players do not expect a return to normal before 2022/2023. This is a long-term undertaking that requires strategies to be put in place to restore a complete industrial sector.
It only takes a tour of bicycle stores to see the stock shortages. Delivery times range from 6 to 12 months. Although electric bikes have become scarce, it is still too early to use the word shortage, but it is true that strong demand has ultimately caused a bottleneck.
The parts needed to assemble bicycles that are not produced in France now take more than 6 months to arrive, compared with 3 months previously.
It will therefore be necessary to carefully assess the situation, secure funding, and protect supply sources in order to restore long-term stability.
More to come...
