Taichung Industry Spotlight on Bicycles

Credit: Courtesy of the World Trade Center, Taichung

Taichung is the world leader in the production of quality bicycles. For 16 consecutive years, Taiwan has been the largest global exporter in terms of export value. In 1996, it exported 9.5 million bicycles worth US$980 million. Some 90% of Taiwan's bicycles and 80% of bicycle parts are manufactured in the Greater Taichung Area.
Taichung's bicycle industry has been export-oriented from the beginning. Since the area was already strong in related industries such as sporting goods, composite materials and machines, it was able to capitalize on the opportunity to become the leading world supplier of bicycles. Recently, a dramatic rise in labor costs has pushed Taichung bicycle manufacturers to develop high-end, quality products and to diversify their product lines.
Even professional items such as mountain bikes for export are now produced in the area. Materials used include titanium, carbon-fiber, chromium, aluminum steel and even wood.
Two manufacturers have become leaders in research and development in bicycle technology. World-renowned Giant Manufacturing Co., Ltd., located in Tachia--20 kilometers from downtown Taichung--has its own R&D team. As a result, the company is winning widespread international recognition under its own brand name. Merida Industry Co., Ltd., located in Yuanlin--which is about 35 kilometers from Taichung--has also developed new types of carbon-fiber bicycles in cooperation with eight other manufacturers. Giant and Merida accounted for about one-fifth of Taiwan's bicycle exports in 1996.
Producing 2.5 million units per year, including 1.1 million in Taichung, 1.4 million in mainland China and 0.1 million in Europe, Giant is now the world's leading bicycle manufacturer and largest exporter. Its factory in the Netherlands started production in June, 1997, with a target of 300,000 units per year in 2000. Falcon Cycle Parts Co., Ltd., located in Shenkang -- 25 kilometers from downtown Taichung -- has also decided to open an office in the Netherlands, in order to develop its own Falcon brand name in the European market.
Falcon is the number one manufacturer of derailleurs in Taiwan and number two in the world. Merida Industry Co. developed the earth-friendly, oil-free, power-assisted "PEDCON" bicycle that went on the market in 1996.
The company has signed sales contracts for US$20 million worth of powered bikes with Holland's Koch Kleeberg B.V., Germany's Merida-Fahrrad-Vertries GmbH and Autosonik Group s.r.l. It is expected to sell 0.18 million powered bikes in the coming five years.
Aside from complete cycles, bicycle components such as derrailleurs, chains and coast brakes also dominate the world market in terms of output. The ROC Ministry of Economic Affairs has financed the establishment of a Bicycle Industry Research and Development Center in Taichung.
According to export figures for 1996, the EU accounts for 2.96 million, or 31%, of Taiwan's bicycle exports, followed by the U.S. at 30%, or 2.92 million units, and Japan at 13%, or 1.23 million units.