If you’ve been keeping track of recent developments in relation to dumping tariffs on electric bikes you will be aware of an ongoing case submitted by the European Bicycle Manufacturer’s Association on behalf of EU e-bike producers alleging dumping practices. The reaction from those importing from China has been robust, with the formation of the LEVA-EU backed Electric Bike Importer Collective making a counter case and one that alleges protectionism practices.
Here, MV Sports Graham O’Hara, an importer close to the saga, writes on how the battle stands to deal severe damage to electric bike sales in Europe, delivering a nasty blow to bike shops at a time when the pedal-assist market is one of few driving bike sale profits.
Over to Graham:
The UK cycle market is going through some tough times at present with pressures from so many areas. It’s a little wonder any of us stay in the trade at all! But it is our passion for the product and enjoyment of riding bikes that keeps us here, striving on through thick and thin.
The recent saving grace for much of the industry and many struggling shops has been the Electric bike – unit sales may be down, but sales of higher priced E-bikes are helping to keep the tills ringing with sales steadily growing in this increasingly buoyant sector of the market that has huge potential for growth. Given the right government support, the sector has the potential to transform urban transport- especially with many UK cities due to implement congestion charging zones in the next few years.
Whilst all has been rosy up till now with Chinese sourced E-Bikes only attracting 6% duty, all this is potentially due to change with the little reported (outside of bicycle industry trade sites) EU e-Bike Dumping Duty Investigation. The investigation has been brought by big players in the European bike market – essentially Billion £ companies with a vested interest in stopping bikes coming into Europe from China. They simply want to stifle any competition and somehow think that despite only entering the E Bike market in the last few years that they have the absolute right to dictate supply. We should have all seen this coming with the huge investments in Europe in many robotised plants capable of producing 1000’s of bikes a day – could this be not seen as oversupply? If I look at some of my very small Chinese factories one of them has the capacity to make no more than 100 e-Bikes a day. Hardly a threat to the global dominance of certain big EU firms and motor companies is it?
So this is where we are all at. In July we will know where we stand, but until then little can be done – essentially meaning that the big EU players win regardless of whether anything happens or not as we cannot get bikes from any of our current sources due to the threat of whatever dumping duty is decided (if any) being back dated.
Sure, we could look to Europe, but this means higher prices for UK retailers and their customers – even if the product costs the same out of the factories in Europe the freight rates to the UK are considerably higher and also there are risks – will the quality be any good? What is the service and back up like etc… it’s a minefield.
The outlook currently is not looking great for the entry level E-bike market, with the potential for lack of supply over the summer. Even if the status quo remains the same, no one will risk bringing in Bikes after April, the potential duty hit could cripple many small to medium companies so it is just not worth the risk. Consumers, retailers and distributors all lose out.
So, what can our government do I hear you ask? – Nothing is the answer. The Department For International Trade say we just have to sit tight and wait. They understand the frustration, the potential for lost sales and lost jobs, but can do nothing to help. Maybe the future of GB outside after Brexit could actually be quite rosy.
My industry prediction for this year is that it will be tough, very tough. Prices are going to potentially rise further and there will be a shortage of entry-level E Bikes in the short term. So for retailers I would say buy your stock in as soon as you can and hold decent stock levels to get yourself through any potential drought while your faithful distributors scrabble around for a solution!