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T H E B E S T O F 20 1 7

6       March 2017 BIKE europe


While the e-bike gained a market share of 15%, speed e-bikes sales are still marginal

German Market Follows E-bike Trend:
Less Volume, High Turnover
BERLIN, Germany - After two ex-                    gained in the second half of the year. Therefore
cellent bicycle sales reports for                  we are convinced that the industry can be sat-
                                                   isfied with the final result. We should not for-
2014 and 2015, the German in-                      get that the market was excellent for the indus-
dustry organisation ZIV announced                  try in 2014 and 2015 so we are comparing 2017
less positive market results for                   sales with very high levels. All together we are
2016. Last year the volume of                      very confident about the future.” At Eurobike
                                                   last year, ZIV still expected a decline in market
combined sales for bicycles and                    volume between 6-8%.
e-bikes declined by 6.9% com-
pared with 2015, to 4.05 million                   Average retail price up
units. Once again the e-bike was                   In sales, the German bicycle market follows the
                                                   same trend as the Netherlands in the past
the positive note. Both sales and                  years, with the rise of the e-bike. In Germany
exports climbed by double digits.                  the market tendency now shows a decline in
                                                   overall volumes, while the turnover increases
jan-willem van schaik                              just like the average price. In 2016 the market
                                                   volume in Germany decreased by 6.9% while

     IV managing director, Siegfried Neuberg-      the turnover rose by 7% from €2.42 billion in
     er puts the 2016 market results in perspec-   2015 to €2.6 billion in 2016. According to the
     tive by stating, “2016 was a difficult year   ZIV this is the result of the increase in sales of
     for the German bicycle industry. The in-      e-bikes but also the growth in demand for
dustry is heavily dependent on the weather         higher quality bicycles. Last year 605,000 new       Also for the German dealer cooperative ZEG, the e-bike is now really in the lead.                       Photo: Bike Europe
conditions during the bicycle season. Unfor-       e-bikes entered the market, an increase of 13%
tunately these were unfavourable in the first      compared with 2015. As a result the average          the German market is the e-bike, which now                 brands, but also the e-MTBs of Bulls and the
half of the year. Most of the business which was   retail price surged last year by 15% to €643. Ob-    accounts for up to 15% of the volume. The ZIV              e-city and e-trekking bikes of Pegasus as well
lost between January and July, could not be re-    viously the leading trend boosting the value of      expects this number to grow in the years                   as Hercules had prominent positions at the
                                                                                                        ahead. They anticipate an 18-20% market                    ZEG show.
                                                                                                        share in the medium term and even 30% over                 Less positive news from the bicycle manufac-
                                                                                                        the long term. The speed e-bike market is                  turer’s side came from MIFA.
                                                                                                        slowly picking up as well. The volumes are still           In December the company moved to a brand
                                                                                                        marginal and 99% of all e-bikes sold are part              new factory in its home town Sangerhausen.
                                                                                                        of the 250W and 25km/h category. German                    However, just before the production could ac-
                                                                                                        made e-bikes are very much in demand on                    tually start, it became clear that the company’s
                                                                                                        other markets as the export volume boosted                 long time financial difficulties could not be
                                                                                                        for the second consecutive year. In 2015 the ex-           solved with multi-million euro investments
                                                                                                        port volume was already up by 37%. It explod-              only by owner Heinrich von Nathusius and the
                                                                                                        ed again last year, growing by 66% to 233,000              company filed for insolvency. Apparently not
                                                                                                        units.                                                     everybody could benefit from the e-bike boom
                                                                                                        When stating “2016 was a difficult year for the            on the German market. The final outcome of
                                                                                                        German bicycle industry” the managing direc-               this insolvency is still unclear at the time of
                                                                                                        tor of the ZIV was mainly referring to the mar-            writing.
                                                                                                        ket for regular bicycles which declined by
                                                                                                        nearly 10% in volume, or 370,000 units. In 2015
                                                                                                        over 3.8 million bicycles were sold and last                Market Share E-bike Categories
                                                                                                        year this volume dropped to just over 3.4 mil-
                                                                                                        lion. The main part of the decline came in the              E-City/Urban                                              45%
                                                                                                        categories city/urban, trekking, youth bikes                E-trekking                                               35.5%
                                                                                                        and MTBs. The other categories, Holland                     E-MTB                                                     15%
                                                                                                        bikes, touring bicycles and others, remained                E-Cargo bikes                                             2.5%
                                                                                                        stable.                                                     Speed e-bikes                                              1%
                                                                                                                                                                    Others                                                     1%
                                                                                                        New bicycle factory and shifting                            Source ZIV

                                                                                                        The market transformation to more e-bikes in-
                                                                                                        stead of regular bicycles only was also echoed
                                                                                                                                                                    Market Volume Bicycles & E-Bikes
                                                                                                        in the changing strategy of some big players in                                 2015          2016          +/-
                                                                                                        Germany. Last October Derby Cycle’s CEO                     Total market        4.35 m        4.05 m        - 6.9%
                                                                                                        Thomas Reith was appointed head of all Pon                  Bicycles            3.82 m        3.44 m        - 9.7%
                                                                                                        Bike Group’s e-bike activities. According to a              E-Bikes             535,000       605,000       + 13%
                                                                                                        company statement “In the fast growing e-
                                                                                                        MTB sector Focus is to be the leading brand of
                                                                                                        the Pon Bike Group.”                                        German Bicycle & E-Bike Market
                                                                                                        Also for the German dealer cooperative ZEG,
                                                                                                                                                                                        2014          2015          2016
                                                                                                        the e-bike is now really in the lead. They al-
                                                                                                        ready claimed a market share of 50% of all e-               Sales in volume        4.10 mio      4.35 mio         4.05 mio
                                                                                                        bikes sold in Germany. This claim was reflect-              Average price          528 euro      559 euro         628 euro
                                                                                                        ed in the 2017 model range presented last July              Production total       2.14 mio      2.19 mio         1.97 mio
                                                                                                        where e-bikes were top of mind for the first                E-bike production      254,000       305,000          351,500
                                                                                                        time for all ZEG brands. Obviously Zemo and                 Import                 2.55 mio      2.91 mio         2.59 mio
                                                                                                        Greenmover are ZEG’s dedicated e-bike                       Export                 1.09 mio      1.02 mio         0.92 mio
BIKE europe January/February 2017               9


Shimano Europe MD Frank Peiffer on shortening lead times to meet today’s and future customers’ expectations

‘It Has To Happen’
EINDHOVEN, the Netherlands –
Frank Peiffer leaves no doubt what-
soever about the transformation by
the bicycle industry needed to meet
the requirements of ever more con-
sumers ordering online. “That has to
happen,” he says. Regarding how to
make it happen, the MD of Shimano
Europe’s bike division presents a
clear view, including the ifs and
buts that come with it.

Jack Oortwijn

     ike Europe interviewed Frank Peiffer at
     Shimano’s new European HQ exactly one
     week after its official opening. It’s an office
     that stands out design-wise as well as lo-
cation-wise. He explains what it expresses
about market expectations by the world’s big-
gest manufacturer of bike parts.
“Of course we believe strongly in bicycles and
their future. What growth lies ahead is some-
thing that nobody can predict precisely with re-
gard to ‘consumption’ and bike sales. But that
there is and will be a strong growth in usage is
clear. That’s also expressed in the latest trends.
It used to be fun and technology related to
mountain bikes. Nowadays Europe is setting
the trends which are more function-focused.”

What does this new HQ say location-wise
with regard to future Shimano products?
“That bikes will have more electronics like            Frank Peiffer, ‘Changes must come fast as online sales grows fast and with that consumer expectations for delivery within one day.’                     Photo: Bike Europe
many more products used daily. Bicycles will
become more high-tech, like cars that have             for instance by Amazon. The industry has to               “Currently only the 7-speed internal gear hub              duction needs. It’s an integration process which
functions such as ABS and traction control.            catch up here with regard to secured availabil-           is produced at the Czech plant. Whether pro-               is used by the car industry. You could say that
Such accident avoiding functions will also             ity.”                                                     duction here is to be expanded is an option. Ja-           e-bikes are touching on collaborative planning
come in bikes. And to create that we are at the                                                                  pan has to decide on that. It’s a big facility so          nowadays as more industries are involved like
right location for forming partnerships with           Increasing the speed to market ability of                 we don’t want to exclude this possibility. Also,           electronics, batteries, and software. And it is
high-tech companies.”                                  bike makers in Europe means that lead                     production in Europe will help to increase sup-            also being pushed by big growth in working
                                                       times have to be shortened. Is this possible              ply chain flexibility and speed to market. But I           capital.”
Is it correct to see this new HQ also as an ex-        for Shimano?                                              want to emphasise the fact that the attention to
pression of the fact that Europe is by far the         “It’s possible for everybody as this is foremost          planning is of the utmost importance.”                     Final question; would collaborative plan-
largest market for Shimano?                            related to planning. That needs more attention                                                                       ning be in the interest of Shimano? In par-
“Correct; Europe is by far the biggest market for      than changing production locations. Basically             Are there other ways with which Shimano                    ticular when looking at the huge ups and
Shimano sales-wise. Whether it accounts for            everybody needs to focus more on planning.                can meet the supply chain flexibility/in-                  downs in Shimano‘s production levels in
close to 50% of all our sales or over 50% is also      However, the industry is relatively bad in plan-          creased speed to market needs of the indus-                2014/2015 and 2016, according to a recent
a question of currency fluctuations.”                  ning. What also comes into play here is that              try? A supply chain expert said that collabo-              Credit Suisse report.
                                                       everybody looks at their own plate instead of             rative planning could also offer a suitable                “Yes, it would definitely be in the interest of
Next to e-bike systems I think that soft goods         the whole chain. Co-ordination and accurate               solution. Do you agree?                                    Shimano. Because of the ups and downs in pro-
are also getting more and more important               numbers is what counts.”                                  “Collaborative planning is a good tool. But I am           duction levels, we offered this years ago to our
for Shimano Europe regarding the Lazer ac-                                                                       not sure to what extent this is realistic. It calls        customers. At that time it was not regarded as
quisition. What’s the strategy here?                   One of the leading bike makers in Europe                  for co-operation at many more steps in the                 an issue. Now we are still far away from produc-
“Lazer is another step in completing our soft          presented a goal for shortened lead times –               planning process. It also looks further in the fu-         tion planning standards used in the car indus-
goods range. Here’s still quite something to           it eventually must come down from 26                                                                                 try.
gain for Shimano. We are currently focusing on         weeks to 8 weeks. How do you comment on                                                                              Getting to 8 weeks lead time is something that
brand positioning and at this new HQ we are            this ultimate goal?                                       ‘Online sales and                                          needs to be achieved. Dealers have presented
bringing together all soft goods functions for         “Shorter is better; also for Shimano. We are                                                                         a time buffer and still do. Online sales require
creating more synergies.”                              adding a 3rd major shipping and logistics base            future markets require                                     a much shortened supply chain. We need a po-
                                                       in Europe; in Lyon, France for faster deliveries          a much shortened                                           sition on that in which all hands must be work-
Let’s switch now to the latest trend in the EU         to our customers in France and Italy. But of                                                                         ing together. It also requires a vision on future
market; do you agree to the claim that in-             course there’s a limit to stock-levels. Also you          supply chain.’                                             products and where to have them made.
creasing the speed to market of bikes and              have to define lead time. Does it, for instance,                                                                     Switching to omni-channel is not an easy step
bike products will become essential in the             include raw material purchasing? Including                                                                           also when taking logistics into account. But as
coming years when taking changing con-                 that you cannot come to 8 weeks.”                         ture. It requires a real one-year ahead forecast           an industry we cannot afford for such a switch
sumer behaviour and rapidly growing on-                                                                          including the production planning in numbers.              to take too long. Changes must come fast as on-
line sales into account?                               Is more production in Europe an option for                Next to that, collaborative planning includes              line sales grows fast and with that consumer ex-
“What’s clear here is that consumers are ex-           Shimano to meet the industry’s need for                   discussions on market expectations that go two             pectations for delivery within one day. It has to
pecting more nowadays. In particular when              speed? And what are you currently produc-                 years ahead including factors such as technol-             happen. Otherwise others will take-over the
taking into account the online services offered        ing in the Shimano Czech Republic facility?               ogy developments, product planning and pro-                business.”
12       March 2017 BIKE europe


30th Taipei International Cycle Show reflects

E-Bike Significance Rising to New Highs
TAIPEI, Taiwan – Electric bikes in                         of China industry had a disastrous 2016 with a               new 250W motor is with under 3.5 kg also light-            offers ‘Comodule Analytics’; an online platform
various forms were the big, main                           drop in bicycle export of some 26%. Export to the            er. The Dapu motor offers a big 80Nm and is suit-          which visualises live performance data of the
                                                           country’s number one destination – Europe – was              able for power assist up to 25 - 32 km/h.                  Brose drive system for the manufacturer. The
thing at this year’s Taipei Cycle. Of                      down by 25%. These official Taiwan Bicycle As-               Also Bafang presented a new mid-motor at Tai-              second feature is called ‘Comodule Operate’.
course they have been there for                            sociation (TBA) figures are excluding e-bikes.               pei Cycle. It’s one that is targeting e-MTBs but           This is a smartphone app made for the bike rid-
years already - but now everybody                          Compared to regular bikes ‘Taiwan’ did much                  can be used in any e-bike category including               er and offers him or her direct interaction with
has set their sights on electric                           better with e-bikes. The TBA reported a “strong              speed pedelecs. For that it offers a rated power           the bike. Other service providers that were pre-
                                                           and steady growth” on the export of electric bi-             of 1,000W and a maximum torque of a big                    senting in Taipei offered similar connectivity so-
bikes; from parts makers to connec-                        cycles. Total export upped big, by 83% to over               160Nm. More news on Bafang is that the drive               lutions.
tivity providers while the interest for                    110,000 units in the first ten months of 2016. With          system manufacturer will start to produce bat-             Last but not least on e-bike developments pre-
e-MTBs from Asia is rising. Taipei                         that the Taiwan industry is gaining a foothold in            teries. The company announced an initial invest-           sented in Taipei was that more drive system sup-
Cycle’s message was crystal clear;                         the all-important mid to hi-end segments of the              ment of €11.2 million to push its own battery de-          pliers are entering the market. Companies like
                                                           e-bike markets; contrary to Chinese exports                  velopment and an automated production                      Hydrive from Taiwan, MAC from China and
the significance of the e-trend will                       which continue to linger at the low to mid-end               facility. “OEM partners prefer complete system             Marquardt from Germany. Marquardt stems
continue to exceed all expectations.                       market segments.                                             solutions today,” said Jack Brandsen, GM Bafang            from the automotive industry and is a maker of
                                                           That many of the OEMs in Asia are now focusing               Europe. “It became crucial to offer this option as         display’s, handlebar controls, motor control
jack oortwijn                                              on e-bikes has also much to do with the fact that            well, besides the flexible approach Bafang is pro-         units as well as batteries with BMS. The compa-
                                                           on various Asian markets the interest for in par-            viding.”                                                   ny cooperates with Brose for offering complete
What the 30th edition of the biggest bike show in          ticular e-MTBs is growing. However, this raises                                                                         drive systems.
Asia also indicated was that the bike market, af-          the question of how to handle aftermarket ser-               E-bike connectivity                                        Apart from all this, the waiting is now for nice
ter a tough 2016 that brought poor results, is             vices. In particular when taking the knowledge               Connectivity solutions for e-bikes were also pre-          spring weather to spark sales. Many have their
starting to move again. But it’s still in the early        on electronics by Asian retailers into account.              sented in Taipei by providers like Comodule. In            hopes up for the Easter weekend - contrary to last
stages and being cautiously addressed by many.             Apart from all that; thanks to the interest in e-            a common project Brose and Comodule imple-                 year when it was in March, it’s now in April. Warm
Next to that it’s limited to e-bikes as well as e-         bikes more visitors from Asia were at this year’s            mented a complete e-bike integration system. It            and sunny weather then should do the trick.
MTBs. And that goes particularly for Europe.               Taipei Cycle. They filled the gap formed by few-
Reviewing this year’s 30th Taipei Cycle, one thing         er visitors from Europe and the US.
is certain; this edition will not go down in the his-                                                                    New 2018 dates to restore former identity as industry show?
tory books as an outstanding one. That has all to
do with 2016 leaving its mark on inventory lev-
els. Many on the show floor indicate them as still
                                                           New e-bike (mid) motors; new drive train mak-
                                                           ers; new batteries; new parts specifically target-
                                                                                                                         Taipei Cycle Going Back to the Future?
high in the US. In Europe it’s said to be a less           ing electric bicycles; all of that was at the 30th Tai-       With Taipei Cycle 2017 gone into the his-                 in Europe and the US. The industry role
pressing problem. And this is where the market             pei Cycle. Which of these will move the market                tory books, the 2018 edition comes into                   of Taipei Cycle diminished because the
starts to move again; in particular for e-bikes.           most in 2018 was what became known from                       view. And that’s the one that has a                       OEM ordering cycle changed over the
                                                           Bosch at Taipei Cycle. Europe’s biggest e-bike                schedule which is completely different to                 years. This triggered the rise of Taichung
Future growth                                              drive system maker is launching a mid-motor for               all the previous Taipei Cycle shows. The                  Bike Week.
The big trend in Taipei was the e-bike. Parts mak-         lower price segments. E-bikes fitted with this new            30 previous editions all took place early                 Whether the Taipei Cycle 2018 date
ers in particular are finally viewing them as              Bosch system are to retail for €1,300 to €1,500.              in the year. For next year however Asia’s                 change to the end of October is mainly
where the possibilities for future growth are. And         This Model Year 2018 ‘Active Line Plus Genera-                biggest bike show is switching to an end                  driven by competition reasons with Tai-
with that are looking for every opportunity to             tion 3’ mid-motor is setting new price points in              of the year schedule.                                     chung Bike Week is denied by the show
hook-up to the e-trend. The same goes for the              Europe’s e-bike mid-motor market. Electric bi-                The 2018 Taipei International Cycle                       organiser of Taipei Cycle that claims,
OEM makers located in countries that have GSP              cycles fitted with front hub motors are currently             Show will be held from 31 October to 3                    “The purpose and function of Taichung
+ (import duty free) status for Europe. A&J, Asa-          sold for about €1,299 at retailers. With the new              November 2018. With that date change                      Bike Week is very different from Taipei Cy-
ma, Strongman, and others like Bangkok Cycle               Bosch system this price segment looks now to                  is Taipei Cycle also changing back to                     cle. There’s no direct competition.” Also,
are now all getting heavily into electric bicycles         become the entry-level point for models fitted                what the show was in its early days?                      the 2017 Taichung Bike Week will take
and in particular into e-MTBs. One of them said,           with mid-motors. Bosch has launched its entry-                Back in the late 80s and early 90s (it                    place 17 – 20 October. If such dates are
“We are a bit late stepping into it. But we have           level generation 3 mid-motor earlier to OEMs. At              started in 1988) Taipei Cycle was an in-                  also scheduled for 2018 there will be di-
been working hard and investing into the capa-             Taipei Cycle the first parts that can be used in              dustry ordering show. Over the past 30                    rect competition between the two events.
bility to produce them. We have our line-up                combination with this new drive system were                   years Taipei Cycle evolved more and                       At this year’s Taipei Cycle many said it
ready now.” The OEMs located in Cambodia, Vi-              presented.                                                    more into a distributor show where                        would be ludicrous to attend or as an ex-
etnam and other Asian countries were present-              Another new mid-motor and one that stands out                 wholesalers, importers place their follow-                hibitor take part in both events and that
ing broad ranges of in particular e-MTBs. The              for its size was presented by Dapu. It’s compact              up orders for the upcoming sales season                   they would opt for Taipei Cycle.
same goes for the ones in Taiwan. The Republic             for easy and better frame-integration while the

The 30th Taipei Cycle will not go down in the history books as an outstanding one.                Photos: Bike Europe   Next September Fritz Jou will open the brand-new Portugal facility where pilot production is then to start.
BIKE europe March 2017                  13

                                                                                                                                                                                                    SHOW REVIEW

Bosch is launching a mid-motor for lower (€1300 re-        Parts makers are viewing every possibility to hook-up     Basic bicycle for Chinese bike-share programs cur-          Taipei Cycle’s crystal clear message - e-trend will con-
tail) price segments.                                      to the e-trend.                                           rently made hundreds of thousands per month.                tinue to exceed all expectations.

An honour for Taipei Cycle - Taiwan’s new President Ing-wen Tsai made a speech and joined the opening ceremony.

                                                                                                                     Thanks to the interest in e-bikes, more visitors from Asia were at Taipei Cycle; filling the gap formed by fewer
TIG welding and laser cutting robots were presented by Shuz Tung Machinery, as alloy frame production grows in EU.   visitors from Europe and the US.

Apro E-Road frame. Road race next to be hit by e-trend?                                                              Bafang’s new mid-motor targets e-MTBs with 1,000W power and 160Nm torque.
8       April 2017 BIKE europe


As demand explodes not only from automotive industry in coming years...

E-Bike Sector Facing Battery Supply Shortages?
ASCHAFFENBURG, Germany – The                        dustry compared to that of the automotive sec-
future scenario looks bleak. Espe-                  tor, Bauer predicts a scenario of, “main suppli-
                                                    ers of battery cells not being able to meet the
cially when taking into account the                 demand. The smaller customers like e-bike
strategic gap in battery cell supply                manufacturers will be faced with shortages or
now arising as demand is explod-                    even a stop of supplies.”
ing – not only due to the automo-                   However, the CEO of battery maker BMZ also
                                                    presented a solution to such a nightmare situ-
tive industry switching to electric                 ation. What the solution looks like will follow in
cars and buses. Other applications                  this report. First, the current and future situa-
such as energy storage systems are                  tion of the worldwide battery market; accord-
on the rise because of the transi-                  ing to an analysis by Sven Bauer.

tion to green energy. Where all this                Current and future technology
leads to was outlined in a global                   That current situation shows for instance a Tesla
market analysis by CEO Sven Bauer                   car that needs close to 8,000 battery cells, or an
of BMZ GmbH, Europe’s biggest                       electric public bus that has a battery system in-
                                                    corporating a whopping 35,000 cells! By compar-
battery maker, at the recently held                 ison, an e-bike battery has about 40 – 60 cells. In
Battery Experts Forum.                              series and parallel-connected cells make up a
                                                    complete battery including all that comes with it
jack oortwijn                                       such as the Battery Management System (BMS).
                                                    Almost all of these cells are currently 18650

      urrently the world’s e-bike sector takes up   types (18 mm diameter and 65 mm long) and
      about 10% of all battery cells produced.      look like the commonly used penlight batteries.
      Taking into account the fact that Bosch re-   Cell production is slowly switching to 21700
      cently said that it expects the e-bike mar-   ones as the bigger size is bringing a bigger ca-      BMZ CEO Bauer: ‘Main cell suppliers will not be able to meet the demand. Smaller customers like e-bike makers
ket to have tripled by 2020, the demand for cells   pacity. With that capacity the lifetime of an e-      will be faced with shortages or even a stop of supplies.’                                      Photos: Bike Europe
used in e-bike batteries will rise to 30%. Look-    bike battery is extended from the current aver-
ing at the current market situation and taking      age of roughly 500 charging cycles up to 1,500        According to Bauer, the round 21700 cells with             Production concentrated in Asia
into account the significance of the bicycle in-    to 2,000 cycles.                                      their nominal capacity of 5.2Ah are the way to             Currently the world has four major cell makers;
                                                                                                          go for the near future. He said, “It will be the           Sony, Panasonic, Samsung and LG. Next to
                                                                                                          new standard. Of the major cell makers Sony                them there are about a dozen smaller makers
                                                                                                          and Panasonic will start producing them next               like Lishen, Maxell, or ATN while Apple i-phone
                                                                                                          September and Samsung by April 2018.”                      producer Foxconn is looking to step in. All these
                                                                                                          However, the BMZ CEO also explained that while             producers are located in Asia; in Japan, Korea,
                                                                                                          Tesla is convinced of the superior 21700 cell              and China.
                                                                                                          qualities, the German car industry isn’t, as BMW           The four biggest makers handle 80% of the mar-
                                                                                                          is opting for prismatic Lithion-Ion batteries.             ket. According to the BMZ CEO, annual cell pro-
                                                                                                          Next to 21700 Lithion-Ion battery cells the BMZ            duction currently stands at 5.4 billion. This pro-
                                                                                                          CEO doesn’t see any other technology taking                duction total is expected to quadruple in the
                                                                                                          over from the current Lithium-Ion technology.              next ten years. But even then the question re-
                                                                                                          Apart from Li-NMC (Nickel Manganese Cobalt)                mains; will there be enough supply? And next to
                                                                                                          that is. He predicted at the Battery Experts Fo-           that another question arises. And that is wheth-
                                                                                                          rum that this is the battery technology for the            er batteries will still be affordable in the near fu-
                                                                                                          near future.                                               ture? This question is brought about by the fact
                                                                                                          “NMC is the battery of choice for power tools,             that the demand for lithium is growing by 27%
                                                                                                          e-bikes and other electric powertrains. It will be         per year. According to Sven Bauer, “there’s
                                                                                                          possible to reach over 2,000Wh and with that it            enough but it comes mainly from China and this
                                                                                                          will be possible to produce more tailored bat-             country’s subsidies for switching to Light Elec-
                                                                                                          teries like for instance for e-bikes that need an          tric Vehicles for urban mobility brings a huge de-
                                                                                                          annual recharging of only some 50 cycles.”                 mand increase. Will it come to China First? Next
                                                                                                                                                                     to that the price for copper is up by 30%.”
                                                                                                                                                                     According to BMZ CEO Bauer, all this leads to
                                                                                                           Battery Experts’ Forum                                    the following conclusions:
                                                                                                                                                                     • Cell makers cannot keep up with demand;
                                                                                                           The 13th Battery Experts Forum - meet-                    • Cell makers will concentrate on the automo-
                                                                                                           ing point for the international battery                     tive industry;
                                                                                                           world - took place in Aschaffenburg,                      • Raw material prices on the rise;
                                                                                                           Germany from 14 - 16 March 2017.                          • Increased volatility also in currencies.
                                                                                                           The organiser was Batteryuniversity
                                                                                                           GmbH. Over 50 leading experts, devel-                     Cell production in Europe
                                                                                                           opers and researchers reported on the                     What is to bring relief to the nightmare scenar-
                                                                                                           latest trends in lithium ion battery tech-                io described by Sven Bauer – with e-bike mak-
                                                                                                           nologies. In addition to the presenta-                    ers no longer getting the batteries they need, is
                                                                                                           tions, the forum also featured a small-                   to start cell production in Europe. That is made
                                                                                                           scaled exhibition. The 13th Battery                       possible as the federal German government is
                                                                                                           Experts Forum was visited by some                         offering a subsidy.
                                                                                                           400 professionals from the power                          At the Battery Experts Forum the plans for the
                                                                                                           tools, e-bike and forklifts industry, and                 cell producing facility were revealed. Plans
                                                                                                           other businesses relying on batteries.                    clearly show that they are already in a well-ad-
                                                                                                           The 14th Battery Experts Forum will take                  vanced stage. A company called DZP which
                                                                                                           place from 27 February to 1 March                         stands for ‘Deutsche Zell Produktion’ (German
                                                                                                           2018 in Aschaffenburg, near Frankfurt.                    Cell Producer) will be formed by a consortium
                                                                                                                                                                     of companies that each take a stake in the cell
BIKE europe April 2017   9


The 13th Battery Experts Forum was visited by some 400 professionals from the power tools, e-bike and forklifts
industry, and other businesses relying on batteries.

producing facility. The cell production facility          amount to some €3 billion.
has not yet been named. Conglomerate Thys-                The initial planning of what Sven Bauer calls the
senkrupp will take part in DZP, as well as Manz           ‘European Giga Cell Facility’ has started. This
AG, M+M GmbH, BMZ Group, and others. This                 facility will have a total ground surface of
consortium has to put up 50% of the total invest-         120,000m², of which 34,000m² is the production
ment in the German cell producing facility. The           area. The giga cell facility will feature accredit-
other half will come from the German govern-              ed test laboratories. Production is expected to
ment. Total investment in the facility will               start in 2021.

 Exhibition Reflects Battery
 Importance for E-Mobility
 That Lithium-Ion batteries are the corner-
 stones for the breakthrough of electro-
 mobility was reflected at the exhibition
 that ran parallel to the Battery Experts
 Forum. Here it became very clear that
 battery research is running at full speed
 as globally electromobility is regarded as
 one of the keys for stopping global warm-
 E-Mobility comprises many more ele-
 ments than just the electric vehicle: the
 electromobility system is formed of many                 The exhibition that ran parallel to the Battery Ex-
 components together, from drive technol-                 perts Forum made very clear that battery research
 ogies to the charging infrastructure. Be-                is running at full speed.              Photos: Bike Europe
 tween 2020 and 2030, the experts from
 the German national platform for electro-                showed that such developments boost
 mobility (NPE) are expecting a significant               the electronics industry. Various battery
 breakthrough in electromobility. Germany                 makers that also target e-bikes present-
 aims to acquire a leading position with                  ed themselves here. Companies like
 high-quality products, services and solu-                Akku Power GmbH, Ansmann or TWS
 tions. For that the federal government is                showed their latest batteries, while nu-

                                                                                                                                   H-B la ck Pro
 pursuing the aim of registering a million                merous testing houses were also here.
 electric cars by 2020. To this end, it                   The same goes for others that target the
 agreed a promotion in 2016 in the form                   safe storage of Li-Ion batteries like Li-

                                                                                                                                                        ables superior
 of buyers’ premiums, tax incentives and                  maTech which offers the Akku-Safe for

                                                                                                                               to r te c h no lo gy  en
                                                                                                                       Proje c
 expansion of the charging infrastructure.                safe charging and storage of (among oth-

                                                                                                                                                        in g 10 0 % o f
 The Battery Experts Forum exhibition                     ers) e-bike batteries.

                                                                                                                          ligh t pa ttern b y utiliz
                                                                                                                                                     output up to
                                                                                                                          availa ble L E D ligh t,
                                                                                                                                                    achin ed housin g,
                                                                                                                        23 0 lum en s, C NC m
                                                                                                                                   as  dy na m o  an d  e-  bike versions
                                                                                                                       availa ble

                                                                                                                                 t id ea s fr o m liv in g in da rkness.
                                                                                                                          B righ

 Various battery makers that also target e-bikes pre-
 sented themselves at the Forum’s exhibition. Com-        Akku-Safe for safe charging and storage of (among
 panies like Akku Power, Ansmann or TWS.                  others) e-bike batteries.                            
10       April 2017 BIKE europe


Stable sales mask a booming e-bike market:

Brexit Looms Over UK Market
LONDON, UK - The vast majority of                    most in the UK bike trade - who are largely de-
UK cycle sales are imports from                      pendent on the price of imports - is how long
                                                     and how successfully extra costs induced by the
the Far East and there is a boom-                    weak pound can be absorbed or mitigated, es-
ing but relatively tiny e-bike market                pecially now Article 50 has been triggered by the
numbering in the tens of thou-                       UK government.
sands of units. Cycling UK sug-
                                                     The rise of the chains
gests, based on ‘informal industry                   It is estimated that the independent bike sector,
estimate’, that 30% of cycles sold                   though having very slowly declined its market
are childrens’, 30% MTBs, 10%                        share in recent years, still accounts for 35-40%
road, 26% classic/hybrid, and 4%                     of bike sales. The major bike retail chain Hal-
                                                     fords has a slightly smaller market share than
folding/other. They also suggest                     all IBDs combined. One cloud on the Halfords
about half of the retail value of the                horizon is the recent analyst downgrading of
cycle market comes from bicycle                      shares, despite the company’s greater empha-
sales, and half from parts and ac-                   sis on online sales and the growth of its high
                                                     street stores, branded Cycle Republic. Halfords
cessories.                                           main chain competitor, Evans, saw its 2015 pre-
                                                     tax profits plunge 69% but it is not yet clear how
Richard Peace                                        2016 has treated the company who have also
                                                     rolled out its own brand electric bike, as well as

      o perhaps the biggest news is what has not     significantly increasing its third-party e-bike
      happened. A shock impact from the June         brand offering.
      2016 Brexit referendum result has not yet      Other chain competitors include Go Outdoors,
      materialised in the UK economy at large        whose 58 out-of-town superstores are now
nor in the cycling economy. Consumer spend-          owned by JD Sports Fashion plc, who felt they        UK bike manufacturing renaissance? Next to new Brompton facility, Frog relocating production from China to
ing and wage growth have not collapsed, de-          complemented their own town centre locations.        South Wales, as well as by Trinity Cycles.                                                       Photo: Brompton
spite pressure on prices due to the weak pound       Earlier in 2016, pre-takeover, Go Outdoors in-
in the wake of the result.                           vested millions in new stores and expanded its       er in our market, we don’t sell direct, we’re see-        but Momentum Electric has done the reverse to
                                                     cycle product range significantly as a result.       ing an increase in sales to IBDs whilst the spe-          enter a more vacant sub GBP 1,000 (€1,170) cat-
UK bike manufacturing renaissance?                   Decathlon also looks to be making good pro-          cialist e-bike retailers are also increasing the          egory to gain volume.” He also said: “E-MTBs
However, there are signs pointing to possible        gress and its 20 UK stores might expand in-line      volume of KTMs they are selling.” This was tem-           are taking off in a huge way but I think the main
trends ahead. UK-based bike manufacturing re-        with the company’s increase in profits and glob-     pered with a warning on costs: “Some of our e-            benefactors are the major European brands. E-
mains tiny in the UK at around 70,000 bikes per      al expansion philosophy and it will be interest-     bike’s recommended retail prices (RRP), for an            MTBs are complex machines and the average
year, but showed signs of resurgence. Most no-       ing to see if the Decathlon ‘City’ brand of stores   identical product are now (2017) 20%+ more                Chinese OEM factory is not able to produce a
table in 2016 was folding bike manufacturer          are rolled out in the UK.                            than in 2016 due to exchange rate rise, account-          decent one easily. I know of several new direct
Brompton’s completion of the move to their                                                                ing for, a 14% increase at cost price while the           to consumer brands coming on to the market
new large London factory, aiming to substan-         E-bike bubble or long term growth                    rest is caused by currency fluctuations. Who              in the near future. I do not think they will last
tially up production from the current level of       With sales estimates varying, it seems 50,000        knows what will happen to the RRPs in 2018 if             because although the margins are more attrac-
around 40,000 bikes per annum and to start           plus is the current upper guesstimate accord-        we leave the single market as is currently                tive, to survive they need to invest heavily in
manufacturing an electric assist version in 2017.    ing to those in the industry. With e-bikes strong-   planned.”                                                 marketing and after sales and that is something
There were other small signs in 2016 of a UK         ly entrenched at London and Birmingham bike                                                                    I have not seen done correctly in the UK. The
bike manufacturing renaissance, with light-          shows, in many IBDs, Halfords and Evans it           E-MTBs taking off                                         main positive example that people like to draw
weight children’s bike manufacturer Frog relo-       seems their strong growth is here for the short      Ying Tsao-Tan of Momentum Electric had a dif-             on is Stella in the Netherlands and they are do-
cating production from China to South Wales          term at least. For example Whisper and EBCO          ferent take on the exchange rate fluctuation, be-         ing a great job on those two fronts.”
and talk of introducing mass production of steel     both report a doubling of stock levels for 2017.     lieving it has presented his company’s more               Of course the even bigger overarching question
bikes by Liberty House, following their purchase     Again the big cloud hanging over the UK e-bike       budget orientated e-bikes with an opportunity.            for the UK electric bike market is whether they
of Trillion Cycles. Looking even further ahead,      industry is Brexit and price rises. Bike Europe      “Brexit has had a huge impact on many busi-               can emulate the sustained success of Germany
Hero Cycles are clearly aware of the possibility     got two similar yet contrasting views from those     nesses due to the weak pound. There is possi-             and the Netherlands - both countries with rel-
of post Brexit trade deals, signalled by the open-   in the UK industry. Fli Distribution Ltd imports     bly further uncertainty due to regulations but            atively widespread networks of high quality cy-
ing of their global design HQ in Manchester.         KTM. Fli’s Col Williams commented: “We sell          that is not immediate. Many competitors have              cle paths and relatively high levels of cycle us-
In the short term though the big question for        out of everything e-bike, year-on-year. Howev-       increased their prices due to the weak pound              age.

                    YOUR WORLD
                    OF CYCLING
                   H I G H M A R G I N S · F U L L A S S O R T M E N T · A LWAY S AVA I L A B L E
  mwave_bike_europe_554x90+3_170310.indd 1
BIKE europe April 2017              11

                                                                                                                                             MARKET REPORT THE NETHERLANDS

E-Bike sales stable around 270,000 units in 2016:

Netherlands Sees Record in Value, Drop in Volume
AMSTERDAM, the Netherlands –                            was limited to 3.1%. In 2016 the total market
For the 4th consecutive year the to-                    volume decreased by 5.7%, from 983,000 units
                                                        in 2015 to 928,000 bicycles last year. Not since
tal bicycle market value in the                         1987 has the market reached such a low vol-
Netherlands reached a record lev-                       ume. The Dutch market shows a steady decline
el. The turnover made with the sale                     since 2007 as in that year the market volume
of new bicycles and e-bikes ended                       tipped the 1.4 million units, an absolute record.

at close to €1 billion on 31 Decem-                     90 e-bike brands on the market
ber 2016. Despite this record, the                      The chairman of the bicycle section of the in-
Dutch industry association RAI-Ve-                      dustry association, Wouter Jager, did not want
reniging reported that not all the                      to characterise the market as being in stagna-
                                                        tion. At the ‘Tweewieler Retail Trends Con-
news from the cycling loving coun-                      gress’ organised by Bike Europe’s sister maga-
try was positive, as the 2016 sales                     zine Tweewieler he said. “It’s too early to say
volume declined to the lowest level                     that the e-bike market has reached its maxi-
in 30 years.                                            mum share at 29% as it was in 2016. We think
                                                        that there’s is still potential for growth in this
                                                        product category.” On the other hand he also
jan-willem van schaik                                   pointed out that “in the future regular bikes will
                                                        continue to make up a substantial part of the

     he RAI-Vereniging market statistics for 2016       market, I am convinced of that.” Jager also re-
     show a total of 928,000 new bicycles and e-        ported that, “Rampant growth of e-bike sales          The market share for e-bikes increased again – from 28% in 2015 to 29% last year.                    Photo: Bike Europe
     bikes were sold in the Netherlands. The to-        resulted in the presence of more than 90 differ-
     tal retail value of those sales stood at €937      ent e-bike brands on the market today”, and on        cult to make the speed-pedelec as successful                    able on the market now.” In an official
million. The statistics also indicate e-bike sales      the other hand, “the announcement of Media            as the e-bike in the Netherlands,” said Jager,                  ceremony at the end of March, Dutch Minister
hovered around the same level as in 2015 – at           Markt that they will pull out (of ) the e-bike        “but this category of bicycles certainly has                    of Transport Melanie Schultz handed this
270,000 units.                                          market shows that market entrance is certain-         more potential. A lot of consumers hesitated to                 speed pedelec helmet to the cyclists’ federation
The growing importance of the e-bike catego-            ly not easy.”                                         buy a speed-pedelec due to new regulations                      Fietsersbond. “This is a fine example of inno-
ry, pushing up the average retail price, contin-        This was not the only change occurring in the         which were implemented last year. Also the ob-                  vation,” said Minister Schultz at the presenta-
ued in 2016, though at a much lower pace. The           bicycle retail market. In 2016, IBDs managed to       ligation as of January 2017 to wear a helmet                    tion. “The market develops a nice product the
market share for e-bikes increased again – from         increase their market share in volume substan-        when riding a speed-pedelec made people re-                     consumer likes a lot and the government ad-
28% in 2015 to 29% last year, making it the sec-        tially; from 70% to 76%. Jager pointed to the         luctant. Therefore, we are very content with the                justs the laws and regulations as soon as possi-
ond largest category after city and touring             bankruptcy of the department store Vroom &            special speed-pedelec helmet which was de-                      ble.” According to the RAI-Vereniging, the fleet
bikes. Thanks to e-bikes the total market value         Dreesman as well as the retail chain Halfords         veloped in close co-operation between the na-                   of speed-pedelecs in the Netherlands already
increased by 4.2%. Also, for the first time in his-     as a contributing factor. Although Halfords           tional authorities and the industry and is avail-               exceeds 10,000 units.
tory the average retail price in all distribution       made a restart on a smaller scale “the turnover
channels, including online, exceeded the                in bicycles of both formulas who were offering
€1,000 mark and ended at €1,010, an increase            bicycles in the low to mid-end range has part-
                                                                                                              Dutch Bicycle Market 2012 - 2016
of more than 10% compared with 2015. For the            ly been taken over by several webshops,” Jager                                                              2012     2013       2014        2015       2016                +\-
IBD channel only, the average retail price is           said. The same goes for the market share of           Sales in units (x 1,000)                          1,035        1,008     1,051         983        928          - 5.7%
even higher – at €1,094, although the increase          large DIY-stores who have greatly limited their       Market value (x € 1,000)                       769,159       797,264   886,605      899,020   936,829         + 4.2%
                                                        bicycle range in the past few years. Unfortu-
                                                        nately the statistics of the RAI-Vereniging do        In price categories
Bicycle Categories on the Dutch                         not clarify the market share of webshops, as the      till 300                                              22%       18%       14%          12%        11%
Market                                                  growing importance of online sales is a leading       301 t/m 499                                           11%       15%       17%          17%        16%
                         2014   2015   2016       +\-   issue regarding the future of the IBDs.               500 t/m 699                                           17%       21%       22%          21%        22%
City bikes               41%    42%     43%    - 3.4%                                                         700 t/m 899                                           20%       18%       20%          16%        15%
Hybrid bikes              7%     5%     6%    + 14.3%   Potential of the speed-pedelec                        More than 900 euro                                    30%       30%       27%          33%        35%
Kids bikes               12%    14%     12%   - 19.6%   Just like the e-bike sales, the market for speed-
E-bikes                  21%    28%     29%    - 1.8%   pedelecs in the Netherlands also stayed at the        Average retail price in euro                          743       791        844         914      1,010        + 10.5%
Others                    9%    11%     10%    - 1.4%   same level in 2016 compared with 2015, with a         Average retail price at IBDs in euro                  964       989        974        1058      1,091          + 3.1%
Source: RAI Vereniging                                  volume of just over 3,400 units. “It will be diffi-   Source: RAI Vereniging

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                                                                                                                                                                                                             10.03.2017 11:27:56
BIKE europe May 2017                7


World Cycling Forum keynote speaker Ronald van Klooster, Maxlead, on online battle for consumers and

How To Survive Competition of Online Players
DOETINCHEM, the Netherlands - Ronald van Klooster is passionate about
the opportunities new marketing technologies can bring to brands. He is
the co-founder of Maxlead (, a consultancy specialis-
ing in online marketing for suppliers operating with dealer channels. He
is a keynote speaker at the World Cycling Forum; the Conference on con-
sumer centricity & increasing speed to market taking place 7 and 8 June
in Porto, Portugal. At the conference he will be providing hands-on-advice
on how suppliers/brands can transform digitally in their dealer opera-
tions. You can still sign up for the conference at

Jack Oortwijn                                     With that competition in mind – is a distri-
                                                  bution strategy operating through dealers
At the World Cycling Forum you will speak         still a commercially viable and sustainable
about the new realities in retail. What           option?
does that look like?                              “The dealer channel must make itself indispen-
“Consumers used to be easy to reach. News-        sable. If it does not, it may very well happen that
papers, television or radio, only three media     this channel ceases to exist. Links in the value
channels. Over the past 10 years, this has        chain like dealers are already being deleted.
quickly changed through the internet. It pro-     This disintermediation trend is also happening
vides a growing number of contact options to      in the bicycle and e-bike sector. For instance, by
reach the consumer.                               an e-bike brand named Stella, successfully op-        Ronald van Klooster: ‘The dealer channel must make itself indispensable. If it does not, it may very well happen
Technology and data are becoming increas-         erating in Holland. It offers straightforward on-     that this channel ceases to exist.’                                                                   Photo: Maxlead
ingly important for reaching consumers at the     line products (and offline), supported by lots of
right time in the right media channel. For        advertising, and consumers love it. But, as long      ers often lack the skills to do that effectively. On-       diately. IT tools are able to track dealers’ out-
each industry those contact options, also         as the bicycle manufacturers continue to make         line marketing, dealer portals and experience               bound performance and can make that perfor-
called touch points, are different. For bicycle   complex (electric) bikes, the retail channel is       centres generate leads. These leads to consum-              mance transparent to dealers. It also offers
brands, reaching the consumer has also be-        needed.”                                              ers that have shown online their interest in par-           suppliers/brands an insight into which leads are
come fragmented and harder. The playing                                                                 ticular products will be passed on by the sup-              well followed by their dealers. It offers the pos-
field in which the fight for consumers is tak-    What are your views on the future of                  pliers/brands to their dealers. Many times it’s             sibility for suppliers/brands to select dealers on
ing place is becoming more and more crowd-        retailing bicycles and e-bikes?                       there where it goes wrong. In particular, in sec-           their outbound performance. And, for instance,
ed. The internet forces brands to make choic-     “Brands are putting more money and effort in          tors that operate with dealers which are similar            stop providing the ones with a low performance
es on how to survive the competition of           the hunt for consumers. Online marketing has          to the bicycle business. Experience shows that              with leads.”
especially online players.”                       become a sales tool and much needed as deal-          many dealers don’t follow-up the provided
                                                                                                        leads. Then the supplier’s investment in online             How will the business model with leads work
                                                                                                        marketing turns into a disinvestment. It raises             out for dealer margins?
 ‘New Role for Distribution Chain in Online Marketing &                                                 the question, what the added value of such                  “What is certain is that margins will no longer
 Sales’                                                                                                 dealers still is? That value will be determined by          be determined by purchasing volumes only.
                                                                                                        the success rate of the dealer converting leads             Maybe the Über model will become common-
 As well as being its co-founder, Ronald Van Klooster (51) is also commercial director of               into actual purchases.”                                     place in the value chain of the bicycle sector.
 Maxlead ( Maxlead calls itself “Strategic online marketing partner.
 We help you generate leads and sales, both in the Netherlands and abroad.”                             How can suppliers/brands transform
                                                                                                        digitally to obtain leads?                                  ‘Online marketing
 “Maxlead has grown strongly in recent years and has become one of the largest on-
 line marketing agencies in the Netherlands with a staff of 75. We train online talent in
                                                                                                        “Do what for instance does, where
                                                                                                        consumers book their travel arrangements,
                                                                                                                                                                    turned into a sales
 our own Maxlead Academy and are part of the Everywhere Network, a collaboration of                     making them feel like (they are) avoiding pushy             tool for generating
 international online marketing agencies. At the end of 2016, Maxlead expanded its                      operators. Such bookings spur a digital signal
 digital analytics team and expanded its activities to a support center in Slovakia: Digi-              or cookie to Google Adwords and travel opera-               leads for dealers to
 tal Analytics Support Center (DASE),” explains Van Klooster.                                           tors resulting in online ads. Another example,
                                                                                                        purchasing at webshops means accepting their
                                                                                                                                                                    follow-up on. But
 In the bicycle industry                                                                                transaction terms and conditions. Accepting                 there is where it goes
 Maxlead’s clients in the bicycle sector are Accell Group’s brands Batavus and Sparta.
 Also AGU, Fast Forward and O’Neill. Other brands that Maxlead works for are Happy
                                                                                                        them also provides webshops permission to link
                                                                                                        an online profile (cookie) to the consumers’
 Socks, TomTom, DRU, Luxaflex, as well as other international brands. The total clien-                  name. This identifies interested consumers and
 tele stands at about 100. Maxlead specialises in online marketing for retail channel                   brings leads. We at Maxlead have installed such
 suppliers and claims to have a vast knowledge in this area.                                            online marketing tools in the IT systems of sev-            This means that the customer assesses the driv-
 Van Klooster’s presentation at the World Cycling Forum is titled ‘New role for the dis-                eral customers. What you see more and more                  er and reviews his or her performance. This
 tribution chain in online marketing & sales.’ This is the abstract of his presentation:                now is brands trying to entice consumers with               could work out for bike retailers. Supplier/
 ‘Many manufacturers owe their historic success to a high-performance distribution                      incentives to obtain their online profiles. Mon-            brands monitor the reviews and fit it in their kpi
 chain (Independent Bicycle Dealers). There are good reasons why the partner channel                    ey and effort is put into this as online consum-            schemes for determining the dealer’s margin.
 has always taken a prominent position in Porter’s Value Chain.’                                        er profiles bring leads with which dealers can              This might sound like a fata morgana now for
 “However, in recent years the internet has led to a major shift in all industries that                 reach out to the right consumers with relevant              traditional bicycle dealers, but it’s already real-
 work with a distribution chain. We see that the distribution chain is losing breadth,                  information at the right time.”                             ity in other sectors. However, what has to be tak-
 but is developing in depth. The links in the chain are smaller in number but stronger.                                                                             en into account is that bicycle and in particular
 In some industries, the intermediate links between company and customer have all                       How can dealers follow-up on leads? What                    e-bike retailing distinguishes itself from other
 but disappeared. This phenomenon is known as disintermediation: the disappear-                         does it require?                                            sectors through the service aspect. But also that
 ance/removal of intermediaries between manufacturers and customers. Which distri-                      “Foremost it requires a well-organised sales                service aspect requires a superior online follow-
 bution chain strategy works best for your online business? In this presentation, you                   force. Following-up on a lead means calling the             up as this is can provide an all-important com-
 will find six distribution chain strategies including examples of companies that have                  potential customer within 10 minutes. If that               petitive edge for dealers in their competition
 applied these models, and their respective advantages and disadvantages. Bonus:                        does not happen then what’s named ‘outbound                 with online suppliers. My tip for dealers to work
 12 practical tips to optimise your distribution chain,” says Ronald van Klooster.                      performance’, or the chance of converting the               that out successfully - put young people in your
                                                                                                        lead into an actual purchase, decreases imme-               team. They know what’s going on.”
10       August 2017 BIKE europe


Cycling 4.0; migration from mechanical and hydraulic parts to platform based electronics and software

Shift in Industry’s Revenues & Profits
LYON, France - Who would have                              ical system be the differentiator. Intelligent
thought just five years ago that the                       electromechanical components will be the driv-
                                                                                                                                             Transformation of Global Cycling Industry
                                                           ers with software as the enabler and remote an-
most innovative product line would                         alytics, upgrades and new apps as the cash-flow                                           Platform in CYCLING 4.0
shift from the traditional groupsets                       machines.
consisting of front and rear derail-                                                                                                As revenues and profits shift from hardware to software, from products to
                                                                                                                                     services this transformation will lead to a shift in industry leadership, in
leurs, rim brakes, brake/shifting                          Over 100 million code lines in cars                                             some cases, to new intelligent cycling component suppliers.
                                                           Such a transformation in Cycling 4.0 is pictured
levers, cranksets etcetera to an in-                       in the illustration on this page. While there will
tegrated electric-assist motor/                            be many doubters and naysayers all anyone has                                                              Intelligent
transmission, disc brakes and a                            to do is look at the same transformation that has                                                         Component
push-button electronic shifter? At                         been taking place in the automotive industry                                                                                            Cloud Servers:
                                                           that has also migrated down to the motorcycle                                                         INTELLIGENT                         - Software Upgrades
the core of this transformation is a                       industry. An average new automobile contains             CYCLING                                                                          - Parts and Remote
                                                                                                                                         CYCLIST                   CYCLING
migration of value to a platform                           50 to 100 or more electronic control units
                                                                                                                                                                                                       Diagnostics and Service
                                                                                                                                                                                                     - Big Data Analytics
based upon electrical and soft-                            (ECUs) with over 100 million lines of code—re-                                                                                            - App Store

ware-based components.                                     quiring as much as a 2.7 km of wire to connect
                                                                                                                                                                  TWO, THREE AND
                                                           them over several different networks. The pre-                                           IBRs           FOUR-WHEEL                  OEMs/Brands
                                                                                                                                                                 CYCLING VEHICLES
                                                           mium models of the leading motorcycle OEMs
Patrick Keating – Velo Capital                             contain 5 to 10 electronic control units (ECUs
Partners                                                   with over 10 million lines of code-requiring sev-
                                                           eral metres of wire to connect over one or more
                                                                                                                Bosch, Continental                                            er in this transformation with a total invest-

     lectrical components are the essential pre-           networks.                                                                                                          ment over the last several years that we’ve es-
     condition for software components and                                                                      and other Tier Auto-                                          timated to be a minimum of US$50-100 million.
     the algorithm will be the most valued piece
     of the puzzle leading to the shift to intelli-
                                                           Value shift in automotive
                                                           Of course, we all know what has happened as
                                                                                                                motive Suppliers will                                         As a result, it has dominated the e-assist mid-
                                                                                                                                                                              motor market and, recently, accelerated its ef-
gent components and to fully autonomous cy-                the value in the automotive industry has shift-      continue to bring                                             forts with the release of the world’s first elec-
cling vehicles. No longer will a purely mechan-            ed to electric vehicles dominated by software,                                                                     tro-hydraulic anti-lock brake system (ABS) for
                                                           making Tesla the most valuable US car compa-         innovation to the                                             e-bikes. We have no doubt that Bosch along
                                                           ny and fourth most valuable in the world. The        global cycling market                                         with Continental and other Tier Automotive
                                                           top automakers, their recent market caps, and                                                                      Suppliers will continue to bring innovation to
                                                           2016 worldwide sales are:                                                                                          the global cycling market.

                                                           1.   Toyota, US$155.88 billion market cap, 10.1      revenue in 2016. The driving force behind the                 Shimano able to keep up
                                                                million sales                                   wave of consolidation is the pressure to keep up              As for existing players in the global cycling in-
                                                           2.   Daimler, (Mercedes-Benz), US$70.35 bil-         with the shift toward autonomous driving that                 dustry, only Shimano really has similar finan-
                                                                lion, 3 million sales                           started about five years ago.                                 cial resources to keep on the same level as these
                                                           3.   Volkswagen, US$67.24 billion, 10.3 million                                                                    automotive players. But, it’s been slow to capi-
                                                                sales                                           Automotive suppliers bring bike                               talise on this transformation even though it had
                                                           4.   Tesla, US$60.28 billion, 76,230 sales           innovation                                                    the edge with the introduction of its Di2 elec-
                                                           5.   BMW, US$54.77 billion, 2.4 million sales        Of course, the global automotive industry is a                tronic shifting in 2009. But, they are improving
                                                           6.   GM, US$51.45 billion, 9.6 million sales         US$5.0 trillion industry compared to the glob-                their e-assist mid-motor and we have seen a
                                                           7.   Ford, US$44.65 billion, 6.7 million sales       al cycling industry that by our best estimates is             patent it filed in 2016 for an integrated electro-
                                                                                                                roughly a US$100.0 billion industry. So, it is un-            hydraulic ABS into its e-assist mid-motor. So,
                                                           While this transformation of the automotive in-      likely we are going to see this level of M&A ac-              it’s probably not far behind Bosch in that area.
                                                           dustry has shocked the market, it has been over-     tivity especially from existing OEMs and Tier 1               Will there be any outsiders such as a kickstart-
                                                           shadowed by the acquisition of the next gener-       suppliers. Only Garmin has come from the out-                 er or venture-backed startup that will rise-up
                                                           ation in intelligent components in the               side like Intel to pay in the millions of dollars             and become a player in the global cycling mar-
                                                           automotive industry such as the US$15.0 billion      in the global cycling industry for the acquisi-               ket? Of course, there will be a few of these that
                                                           acquisition by Intel of Mobileye – a leader in       tion of MetriGear and Backtracker purely for                  will make a difference out of hundreds we’ve
                                                           computer vision for autonomous driving tech-         the technology as both companies were pre-                    tracked over the last five years. So, don’t be sur-
Intelligent electromechanical components are near          nology. Startling is the value Intel placed on       revenue. But, we have seen Robert Bosch (with                 prised by it as this disruption is the essence of
future revenue & profit drivers.      Photo: Bike Europe   Mobileye which only had US$104.6 million in          US$85.2 billion in sales) become the new lead-                Cycling 4.0.

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