This weekend's Wall St. Journal had a very interesting article about Chinese bicycle manufacturing. “A Legend's Bumpy Ride” about Flying Pigeon bicycles and the demise of the brand. You think things are tough in your industry? The remnant of the company is thinking of outsourcing to Indonesia or Sudan to lower labor costs!
15 bicycle makers in China declared bankruptcy last year. They sell a $70 wally mart bike for $35 wholesale at 3% profit. 73 million bikes were made in China last year. They export 52 million bikes a year. Pretty soon every person on earth will be on a bike.
The best quote of all was from the article was that with all the competition Chinese bicycle manufacturers “are getting screwed into the ground”.
Now think about this: Bicycles have been banished from Shanghai's major roads to make way for cars and you have to ask why oil is so expensive?
Bicycles were banished from Shanghai? Seems unlikely, bikes are basically everywhere in China.
Bicycles are only banned from certain major roads, mostly in the downtown area. These roads are so congested with high-speed traffic that no American would want to bicycle there. There are parallel bicycle routes into town.
However, bicycles are much less common in urban China these days compared to Chairman Mao's time. Since China's economy starting picking up in the 1980s and 1990s, motorcycles have become the prefered vehicle in the cities.