Bicycle technology and its use had turned up into its own by the early 1870s. (Bicycle: Encyclopedia Britannica) Cycling is designed to be a pleasurable activity. Te people who do not derive pleasure out of it do not cycle. The fundamental necessity for getting pleasure from cycling is a flawless linkage between your physique and your extremely resourceful piece of equipment. The bicycle shop selling custom designed cycles guarantees this connection by presenting you a cycle as per your need: a cozy and well-organized fit, practical design intended for your use, and customization of the appearance of the bicycle. A specially made qualitative bicycle encompasses everything of these- accurately in the manner you wanted it to be. (What Motivates a Custom Bicycle Buyer?)
The company, Daiel Manufacture has excess plant. The company wants to produce bicycle. However, the U.S. bicycle industry has been affected severely during the last five years, with other countries particularly China taking over. Let us understand some of the reasons for the decline of the bicycle industry in U.S. which discourage the company wanting to venture into producing bicycles.
1. Declining demand for bicycle
There has been a declining demand for bicycles in U.S. For the last several years. In order to appreciate the plummeting requirement of bicycles, we shall be looking at the production of bicycles in the year 2000. Manufacturing of bicycles during the time span from January to September 2000 was at 3,623,000 numbers or 52,112 million on value terms, 83.6% and 84.5% correspondingly, as against the same period in the year 1999. This accounts for more than 15% reduction in the two capacities. (Production, Shipments, Imports and Domestic Demand for Bicycles) Everybody objects to and admits that there is a dearth of clearness explaining the tactics in support of bicycles. In the opinion of the majority of the retailers, they do not get sufficient product loyalty, business support and earn profits from the production companies. According to them, mail order businesses are eating up their market slice and undermining the products. They are of the view that Category Killers which are the Organized Retailers do not back or favor cycling. (In the Bicycle Industry, Selling Fun Is Our Responsibility)
The production units bemoan that the IBDs are not been abreast of the developments of the retail industry and display a dearth of comprehension of the sellers necessity to continue and augment their productivity and rise of their market share. They voice their apprehension of aberrant or default in the payment of products dispatched to the retailers. They normally carry advertisement and in their promotional initiatives highlight the intense part of cycling, ignoring the wants and utility of the majority involvement of the ultimate users. It has been illustrated by the Marketing Managers that the trend and the big idea of their advertisements are addressed to their buyers, overlooking the latest statistics on bicycling studies. (In the Bicycle Industry, Selling Fun Is Our Responsibility) Several people in the business keep on concentrating on the dearth of youths enjoying cycling. Nearly everyone admit that the business of the street bike is meant for 35-to-50 age group. (The U.S. Retail Bicycle Market Hits $4.2 Billion)
The widespread belief is that bicycles are playthings and not at all apparatus for amusement or just another answer of mobility fulfilling needs. Public perceive that cycling is innately unsafe and there is a dearth of secured locations to keep themselves busy with this exciting action which support an excellent health and vigorous standard of living. A shortage of chosen bicycle pathway is not only there but even linkages of available exclusively bicycle paths. The fact of track utility limitations and ends influence all non-users of road riders not considering their potential. Dumping and not emphasizing the idea of happiness has affected the bicycle industry a great deal. The populace has become averse to the philosophy of cycling and has become oblivious of the fact which inspired the people to perform cycling as the preference for involvement or the course of their career which had in the earlier period a vital component in their lives. (In the Bicycle Industry, Selling Fun Is Our Responsibility)
In the United States, cycling is presently treated like pimples: as something experienced at the time of youth, which ultimately you will abandon with advancing age. "Display maturity and go for a car" we are always reminded. (Cycling for Transportation: The Japanese Example) The concerns of the industry lies in the advertisement and the marketing of the modern technological bicycle enhancements and joining the extreme cycling events and this is the cause of plummeting profits and market share. (In the Bicycle Industry, Selling Fun Is Our Responsibility) Most of the buyers are no more interested to visit the bicycle shop around the corner of the road to buy a new bike. As an alternative they are attracted to mass retailers, wherein the decision to buy are based mainly on the cost. (Bicycles Market - U.S. Report)
In the year 2001, 68% of the bike sales were done through mass retailers, whereas just 21% were sold through specialty bicycle retailers. During the middle part to the late 1990s that divide was 60/30. (Bicycles Market - U.S. Report) A significant enthusiasm for the extensive use of bicycles is financial. It is very costly to maintain a car in Japan while the cost of gas is comparatively higher than U.S.. (Cycling for Transportation: The Japanese Example) Increase of sales within the country will be impacted mainly by sluggish enhancements in real disposable earnings. Due to this, the faith of the buyer is not hoped to be perk up remarkably and customers will in all probability keep unrestricted expenses low. (Personal consumer durables - Industry Overview)
2. High producing cost
The European market, through its larger thoughts, has visualized how to offer completely prepared bicycles at an inexpensive price and without too much load on the retailers. The U.S. bicycle industry has not visualized how to do that, so practically no bikes are ever exhibited with those components fixed and nearly all customers have to ask and pay a lot more to get what are really necessary parts of an effective bicycle. (Wheels of Change: Greater Interchange between Advocacy and the Industry Will Get Us Out Of Our Rut) Local producers in U.S. must import parts to uphold or augment manufacture, as many bicycle components are no longer made in the United States. For U.S. bicycle market exports, Mexico is a main market at present. The bicycle industry is extremely labor oriented and Mexico's salaries are considerably lower than those in the United States. (Personal consumer durables - Industry Overview) In the U.S. The wage rates are comparatively high which in turn lead to increased cost of production and higher costs for bicycles.
3. Great competition (both domestic and oversees) etc.
For a quite a long time, the U.S. bicycle industry has confronted rigid import competition. (Personal consumer durables - Industry Overview) With most of the effect striking the market since 1997, the U.S. bicycle industry in the last decade has traveled through swings of major developments. (Bicycles Market - U.S. Report) A number of U.S. companies have shifted all or most of their production operations out of the country during this period. As U.S. taxes are being phased out, bicycle manufacturers from the United States have an encouragement to move production to Mexico and other countries. (Personal consumer durables - Industry Overview) Besides lower demand during the spring season, the key aspect triggering such a hold up of production was a fast growth of imports of inexpensive bicycles from China and Taiwan when demand usually steps up, which dawdled the pace of shipments, leading to fall in production. (Production, Shipments, Imports and Domestic Demand for Bicycles)
Rather than as a danger, China's lower costs appeared more like rescue to American companies anxious to recover a competitive edge in world markets. Imports, chiefly from Taiwan and the Netherlands, constitute a major share of the total import market and stand for the tough competition for U.S. products. (STAT-USA Market Research Reports) China gently exceeded the U.S.A. As the No. 1 exporter. (China's low-cost labor lures Japanese firms) Over the last five years, the People's Republic of China has come to control the global bicycle industry, producing 55% to 60% of the world's bicycles, about 60 million units in 2001. Only India, with about 11% of worldwide bicycle production, comes nearby. At present, 86% of the bicycles sold in the U.S. are imports from China that includes higher end models too. (China Rocks Global Bike Industry) There has been a quick transfer in where bikes are sold and their pricing, and finally there has been much merges among principal brands in USA. (Bicycles Market - U.S. Report)
The mergers and acquisitions of the last decade have lead to financial disaster, trimming the workforce and more merges, and this is what the business press and the global bicycle industry are concentrating on. (U.S.…