São Paulo – The Brazilian bicycle industry is discussing the possibility of establishing a hub in the country to boost production and export. The information was supplied by the managing director of the Brazilian Association of Motorcycle, Autocycle, Scooter and Bicycle Manufacturers (Abraciclo), Moacyr Alberto Paes. “We have a plan, a debate underway in our industry to set up a bicycle manufacturing hub, concentrating production. That would encourage the domestic parts industry, bicycles could be offered at more competitive prices. Then we could try and export,” says Paes.
Having a lower-priced end product would enable the national industry to compete with Asian bikes in Brazil and abroad. Right now, the main issue facing the segment is the fact that it is hard to face up to Chinese and Indian production. The two are the top manufacturers in the world. China makes 80 million bicycles a year, 67% of worldwide production, and India makes 10 million, 8% of the worldwide volume. Brazil is the third leading manufacturer, at 5.3 million bikes, 5% of the total.
Currently, bicycle factories are spread across the country. For instance, there are three plants in Manaus, in the state of Amazonas, one in São Paulo, another in the state of Piauí. Because Manaus is already home to three different plants, according to Paes, the hub may be established there. “But it is still under discussion,” he says. Aside from formal companies, there are several informal ones which assemble the bikes using lower quality imported parts and sell them at very low prices. “The industry is unable to increase its output, due to this competition,” says Paes.
However, the sector got some relief from measures taken this year, such as the 20% to 35% raise in the Import Tax on bikes, which took place in September. Other actions are being implemented as well, including higher standards in parts certification and new tax collection procedures, which should prevent tax evasion and informal activities. As a result, Abraciclo is expecting production to increase over the next few years. “Not at high rates, we are expecting single-digit growth,” says Paes. In 2011, however, there should be a 5% decline in production when compared with 2010, and 5 million units are expected.
According to Abraciclo figures, production has been virtually stagnant over the last few years. The growing consumption of a new type of bicycle in Brazil and abroad, however, is also favourable to the industry. “The segment of more equipped bikes is growing each year as a result of ecological awareness, health awareness. The city of São Paulo boasts a few bike lanes, leisure bike lanes,” says the Abraciclo executive director. Brazil has the knowledge and it already manufactures these bicycles.
Currently, according to Abraciclo figures, 50% of all bikes sold in Brazil are for transportation purposes, including bicycles to ride for work, 32% are children’s bikes, 17% are for leisure and recreation, and 1% consists of competition-oriented bikes. The better equipped bikes are used mostly by athletes or people to whom they are not only a means of transport, but rather a choice, a way to be fitter and to not pollute the air with their automobiles. “But we are still unaware as to how much their consumption is increasing,” says Paes.
*Translated by Gabriel Pomerancblum
