A steadily expanding market for bicycles in China is driving sales for leading Taiwanese manufacturers, Giant Manufacturing and Merida Industry. According to a report by the China Economic News Service, Giant has seen its sales volume grow 10% year on year in China. Giant reportedly aims to sell around 1.7 million bikes in the huge Chinese market.
Giant has recently acknowledged the role played by China in boosting its overall revenues. This has been particularly helpful given tough trading conditions in the Euro Zone. Supported by sales in China, the company recently reported a 9% gain in revenue in the first half of 2010.
Both companies note the increasing importance of sales in China in driving overall revenue.
Merida states that sales in China have grown over 30% during every year in the past five years; although, the company is clearly growing from a lower base. Merida has reportedly witnessed a 40% year on year gain in unit sales in China in the first half of the year, with 130,000 bikes sold in the country.
Most importantly, Merida has reported that growth has been profitable in China for three years and profits are expected to continue growing.
Giant has reported that sales in Taiwan now account for only 7% to 8% of the group`s global revenue, with the business clearly focused on export activity. China itself is a key growth driver for the company, and an opportunity to drive significant unit shipments.
In 2008, Giant reportedly sold around 1.5 million assembled bicycles in China, growing to 1.6 million in 2009, and forecasted to reach 1.7 million in 2010.
To diversify in the higher-end segment, Giant launched its ‘Momentum’ sub-brand in 2010. Some 200,000 Momentum bikes are expected to be sold this year.
Earlier this year, Giant unveiled plans to invest an initial US$36 million (€26 million) in its new bicycle and electric car plant in eastern China – located in Kunshan city in the Jiangsu province. While the focus of the plant will be on bicycle and electric car manufacturing, the new Kunshan site will also produce bicycle frames and carbon fibre.
