Coronavirus factory shutdowns continue and heap pressure on cycling industry supply chain

While some of China’s factories have returned to operation following the coronavirus shutdown, many remain closed or undercapacity, threatening the normal supply of parts and frames for the global cycling industry supply chain.

Factories in China have been closed for an extended period over the last few weeks. The traditional fortnight closedown for the Lunar New Year have been extended to halt the spread of coronavirus aka Covid-19.

Bafang flagged up potential supply chain issues last month, confirming that its Suzhou factory had undergone an extended shutdown.

E-Bike conversion kit brand Swytch Bike has warned of delays too. Swytch CEO Oliver Montague said the UK manufacturing team, based near Shenzen and Shanghai in China since early January, was returned to the UK in response to the coronavirus outbreak. “The safety of our team is our utmost priority and we’re pleased to say we are all in good health,” the CEO wrote earlier this month.

As of 18 Feb, Swytch reported that while some factories in some regions of China are beginning to open, the “majority of our supply chain is unfortunately still closed”.

Supply chain experts have warned that companies need to urgently review their alternative sourcing locations.

Will new models or parts be affected?

According the HMRC statistics analysed by the Bicycle Association of GB, bicycle imports from China increased 25% in 12 months (Q3 2018-Q3 2019), but the association told Cycling Industry News that this was probably due to normal fluctuations more than evidence of a significant uplift.

The BAGB told CI.N: “All the evidence we have, from HMRC data and our own Market Data statistics, points to the UK having significant inventory when it comes to bicycles. Perhaps new models or parts will be affected as has been reported by a few companies, but the overall message is likely to be: too soon to tell.”

E-bikes from China have been trending downwards following anti-dumping measures last year, so the shutdowns could possibly only speed up that trend.

The potential impact on the cycling industry supply chain will extend beyond China-made bicycles, with parts and components sourced from the region and used for production in other parts of the world also likely to be affected – particularly if the shutdowns continue.

Other industries more reliant on Just in Time (JIT) part deliveries like the automotive industry are beginning to report on delays impacting on production, including in the UK. Jaguar Land Rover has reportedly resorted to bringing in parts by suitcase. JLR told Sky News that should factory shutdowns continue into March, production at its vast UK site will be impacted.

The broader effects of coronavirus include the push back of Taipei Cycle Show to May this year. Major B2B shows in Europe, outside the cycling industry, are also being impacted, not least Barcelona’s Mobile World Congress which was cancelled after major exhibitors pulled out.