Should the bike industry fear a takeover from the auto industry?

In this guest feature we hear from 25 year industry veteran Philip Douglas, founder of Simpel.ch, former Head of Mobility Product at CIP Group, and industry consultant with SwissFleet Services GmbH.

‘The bike industry will be taken over by the automotive industry if we don’t watch out’ seems to be a fear among quite a few people working with bikes.

And when it comes to our streets, car dominance clearly needs to be corrected. I have a rather clear opinion there. But to portray a whole industry as almost evil is taking things a little too far. There’s much to be learned in both industries and it’s never just black and white.

I used to say that I never saw an automotive player enter the industry and not screw up badly at first. It’s hard to believe how fundamentally different these two industries work and it’s way too easy to misjudge the other side.

On one side, the bike industry still feels a bit like family. There is a lot of trust between partners and people know each other. Strong partnerships are formed with a handshake and surprisingly often there are no big contracts in place.

The number of brands and bike models and sizes per brand is mind boggling. There is a lot of change every season and trends come and go fast. With this setup, the effort for one bike model will naturally be lower than for a car model that will be in the market for 7 years + in totally different numbers.

Let me say that I love the bicycle industry. I have worked with bicycles for over 30 years and pioneered a few areas in it. But I do understand if it all seems a little pragmatic to some automotive players. But hey, it works! Margins are good (in saying this its acknowledging that a fragmented sector, where quantities are low, can be a challenge for some, that major players in the industry make the largest percentage.). And finally, most people are pretty happy to work there.

So, where the bike industry is lean, agile and sometimes rather pragmatic, the automotive industry excels in optimizing to the last miniscule detail and controlling processes to a level that is impressive.

But with the transition the bike industry is currently experiencing due to rise of eBikes, there is no status quo to maintain. There is the real need for evolution of technology and open-minded innovation. This is true for B2C but even more so in the professional B2B use. And from what I’ve seen, the automotive mindset is too risk averse to really think outside of the box and take some risks, without having a guaranteed short term return on invest.

So who will dominate in the future? Personally, I believe that the answer is somewhere in the middle. (Hey I’m Swiss, we like a good compromise!)

The bike industry will probably evolve to be a bit less pragmatic and divide into a more sports/fashion-oriented segment and a mobility/utility segment with a lot longer model cycle. And automotive companies will have to allow their bicycle initiatives to be more agile and adventurous than their other projects. And together, they shouldn’t underestimate the motorbike / scooter players.

I think the consumer will benefit hugely from this development and will get considerably more value for money in the future. What do you think?