Bicycle Racing News and Opinion:
Friday, November 6, 2015
Bicycle Racing News and Opinion:
Friday, November 6, 2015
Back to news and opinion index page for links to archived stories | Commentary
World's biggest bike maker to get new boss
In an interview with Bloomberg Business, 81-year old King Liu revealed his plans to retire in 2017. The founder and chairman of Taiwan's Giant Manufacturing Company, the world's largest maker of bicycles, is planning on retiring at the end of 2017. A new chairman and CEO as well as the succession plans are expected to be finalized by the end of 2016.
“There is internal consensus on the succession plan and the candidates are set”, Liu said in that interview on 22 October. One of the candidates is said to be his son and Giant China president Young Liu.
Nevertheless King Liu doesn’t want to give out any further details and names in the company succession plan so far. All he says is “planning for my succession is to give the young people a chance.”
The baton-passing would be the first since 1988 for Giant, which makes a third of its sales in China, a quarter in Europe, and a fifth in North America. Analysts estimate year-on-year sales growth to be 5.1 percent in 2015, compared to a 10.4 percent rise last year, primarily due to the slowing Chinese economy and the rise of smaller local competitors. Giant’s products range from high-end racing bikes to starter wheels for kids.
Giant has gone from a supplier of bikes to Schwinn to the largest bike maker in the world, title sponsor to World Tour team Giant-Alpecin
Company spokesman Ken Li declined to elaborate on the succession plans and said any change in management must be approved by the company’s board.
“Planning for my succession is to give the young people a chance,” said Liu, who, along with his family, owns a 19 percent stake in the company. The octogenarian said the new leadership would need to know the ins and outs of the company, he said.
Liu founded the firm in 1972 and built it up from a supplier for U.S.-based Schwinn Bicycles into a standalone brand that, according to CIMB Securities analyst Jack Lin, ships more bikes around the world than any other maker.
“I have to make these plans while I’m healthy,” said Liu, who still rides his bike 2 1/2 hours to or from work each day. “Otherwise we won’t be able to keep up with time.”
When Schwinn pulled its orders, Giant was confronted with the challenge of quickly promoting its own brand to international markets, and the company maintains its dual business strategy today. According to JPMorgan analyst Dan Lu, Giant is the market leader with as much as 10 percent market share of global sales.
Bikes to be cheaper?
While we're on the topic of bikes made in Taiwan, Bike Europe had a story about a possible coming price cut to Taiwan production:
TAICHUNG, Taiwan – At the mid-October Taichung Bike Week, prices were a much discussed matter. In particular, the costs for raw materials like steel and aluminium have been dropping by 30 to 40% lately while labour costs increases were limited in China this year. Will this bring lower prices for Model Year 2016 and 2017 bikes?
Such price cuts will follow on the price increases for Model Year 2015 bikes that were implemented last March/April. At that time the big drop in the euro value against the US dollar had such a major impact on procurement costs that bike prices had to be raised. Will exactly the opposite take place now?
Whether bike makers and importers will bring their suggested retail prices down because of lower prices for the components they use in the assembly, is THE question for the coming months.
Retailers will not be happy when they are confronted with the lower prices for MY 2016 bikes. In particular, as their inventory levels are expected to be higher than usual after a season that saw sales reaching a somewhat lower level compared to last year when weather conditions were better.
Gazprom to sponsor RusVelo
Gazprom, Russia's largest company, will be the new sponsor of UCI Professional Continental team Team RusVelo. This was announced by the Russian minister of sport, Vitaly Mutko, during a meeting that was assembled to work on the Rio 2016 Olympic games.
Gazprom produces about 70% of Russia's natural gas and controls 18% of the world's known gas reserves.
Viatcheslav Ekimov (shown here in the 2006 Tour of Flanders) is one of RusVelo's directors.
Düsseldorf wants to host 2017 Tour de France start
The German city of Düsseldorf wants to host the 2017 Tour's Grand Depart. A narrow majority of the city's council voted in favor of the idea, promoted by mayor Thomas Geisel.
The cost for hosting the Tour start will be more than six million Euros, an amount many of the council members found difficult to stomach. Doping also was a component of the debate. German cycling fans have not been able to watch the Tour on the German ARD and ZDF channels in recent years because of ongoing doping scandals, starting with Patrik Sinkewitz' positive in 2007. Positives by Stefan Schumacher and Bernhard Kohl in the 2008 Tour exacerbated the situation.
It was only this year that ARD again began broadcasting the Tour live.
Stefan Schumacher in 2015
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