Tuesday, March 26, 2013

The Giant is Growing

On the 21st of March it was reported in the Taipei Times that shares in the Taiwan’s largest bicycle manufacturers had by far outperformed the broader market. In the 12 months prior the benchmark TAIEX index had declined  2.19 percent, whereas shares in Giant Manufacturing Co had risen 17.99%. Merida Industry Co, the 2nd largest bicycle manufacturer in the country rose by a staggering 77.78 percent. 

This is pretty interesting stuff, and one would assume this means that the bicycle industry is healthy. Looking closely at these two companies one can see that their target is higher priced bicycles, and indeed both companies have seen a rise in the average price of bikes sold. Also not only is demand for these bikes coming from the EU and US but also China. 

Merida is in the process of establishing a new factory in China which will start with a production capacity of 200000 units per year, and eventually be grown to 2 million. Of which, 60 percent of the production is planned for China. 

It's great to see the growth of these two companies, but I also lament that their growth may also have been at the expense of smaller bicycle companies not to mention many retail shops who have had to compete against "big brand" stores. 

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