“Bridging the Gap” is an initiative of CIE’s members and partners to evaluate the state of supply chains in the European cycling markets after the effects of the COVID-19 pandemic and to recommend strategic actions that companies, governments, investors and associations can take to underwrite a sustainable supply of bicycles and allied products to European markets.
The ultimate aim of Bridging the Gap is to create a set of strategic recommendations to support expected growth in bicycle sales in Europe and by that contribute to reaching joined goals on sustainable growth of mobility, road safety and public health.
With the EU Commission announcing that a new cycling declaration to be published in early 2023 there is now an increased opportunity to build international cooperation around the supply needs of the industry that increases both reliability and sustainability.
In 2021 CIE commissioned an expert team of independent researchers to study the state of the industry and collect anonymised data across the cycling ecosystem from consumers to components supply. Based on the experts’ recommendations three studies have been completed.
- A consumer demand study was carried out in six large and representative markets, showing how consumer behaviour and demand changed during the covid pandemic and getting an early view on buying predictions for coming years.
- Anonymised data was supplied by key companies in the supply chain for both assembly and components supply with same timeline as the consumer research.
- Supply chain managers and senior executives were interviewed anonymously to give qualitative views on the causes and possible solutions to challenges in supply chains.
Throughout 2022 CIE members have been getting access to aspects of the studies as they are released, with the unique insights from the consumer research proving particularly useful.
At Eurobike in July the CIE Research Group gave their first public presentation of some of the key findings of their work while CIE’s Kevin Mayne gave a preview of how the EU institutions are trying to support companies in all sectors through the multiple challenges of post COVID recovery, the Russia-Ukraine conflict and applying the EU’s Green Deal objectives to industry.
Highlights and key topics from the presentations included:
- A clear mapping of consumer demand over the years 2019-2021 and a comparison to supply chain demands over the same period. This highlighted the variations in consumer demand over time, and also suggested that the sector has experienced a pronounced “bullwhip effect” (see online article here) which created additional and enduring pressures on supply chains beyond the demand peaks of 2020.
- This maintained pressure is partly caused by external factors such as shortages of raw materials, long supply chains and challenges to shipping, but several structural issues within the industry are making it less able to respond to the challenge than comparable sectors such as automotive. These include the multiple actors, lack of integration, lack of information sharing and the tendency to react to challenges by ordering further and further ahead rather than reforming the supply chain. Recommendations to improve collaboration and transparency will be key to reforming supply chain effectiveness in Europe.
- Plans by the EU to support industries facing so called “strategic dependencies” – reliance on critical supply chains that may be at risk again. Cycling is included in identified EU challenges such as raw materials (aluminium and battery materials) and microchips, but has to clarify the future risks from supply of both bikes and components from Asia.
External evidence supports these findings because there have been warnings of cooling demand in several key European markets and companies are anecdotally reporting significant increases in inventories built up in 2021 which are tying up both money and capacity. CIE now plans to quantify some of these effects as part of its contribution to the EU Cycling Strategy and examine what is needed when the EU bike market re-accelerates growth towards 30 million units by 2030.
CIE members and participating companies will get a report from “Bridging the Gap” in the coming weeks though CIE’s Market Intelligence and Impact Expert Group and the work will also help companies working on the sustainability needs of the industry. Join us to play your part!
A separate report called “The New Consumer” was presented to Eurobike’s Start-up and Innovation Day, giving additional insights on how future markets will need to react to a younger, more female and e-bike oriented consumer base. This report is for sale from CIE alongside our 2021 Market Intelligence Report. Contact info(at)cyclingindustries.com to learn more.
Acknowledgements
Due to anonymity rules only the Research Group knows the individual contributors, but CIE thanks all companies who have contributed to the development of “Bridging the Gap”.
CIE’s Supply Chain Research Group is chaired by Professor Christof Backhaus of Edinburgh Napier University and includes researchers from Edinburgh Napier, MotionLabs (Berlin) and Sports Marketing Surveys (SMS). CIE thanks them for their insight and professionalism in this important and sensitive work.
Consumer research for “Bridging the Gap” was supported financially by Cycleurope, Trek, Accell Group, PON and Specialized.
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