Who Made Your Bike – A $65 billion global industry

The cycling industry is huge — road bikes, mountain bikes, and BMXs, not to mention all the accessories, components, and apparel.
Research company Lucintel estimates the global bicycle industry will reach $65 billion by 2019. It’s a big industry with some big players.
Canadian giant Dorel Industries [TSE:DII.B] owns the Cannondale, Schwinn, Mongoose and GT brands. Dorel has a market cap of around CAD$1.25 billion (AUD$1.28 billion).
Japanese giant Shimano Inc. [TYO:7309] makes gears, wheels, pedals and other bike parts. Their market cap is around JPY¥1.46 trillion (AUD$15.72 billion).
Accurately-named Giant Manufacturing [TPE:9921] is the world’s largest bike manufacturer. Giant is a Taiwan company, and their market cap is TWD$109.34 billion (AUD$4.48 billion). They’re an OEM for the bike industry. But they also market and sell their brand around the world.
Specialised, Trek, Fuji, BMC and Colagno are just a few more bike brands you might recognise. Every year these companies bring to market new, cutting edge bike technology. Some specialise in road bikes. Some in mountain bikes or BMX. Some do a bit of them all.
Regardless, the bike industry as a whole has come a long way in the last few decades.
Now the basics are still the same — two wheels, handlebars, seat, frame, gears…bottle holder. But advanced technology such as carbon fibre, disc brakes, hydraulics and electronic components have become the norm. Carbon fibre in particular has revolutionised the performance of bikes over the last 20 years.
Now, it’s important for cyclists and investors to know that, while the Cannondale, GT or Felt brand name might be on the bike, they aren’t necessarily the manufacturers of the bikes.
Shimano makes gears, pedals and other components found on many high-end bikes. But there are other big OEMs in Asia that make most of the world’s carbon fibre bike parts. Felt, Cannondale and Fuji use Asian composite makers.
Giant is one company that makes their own stuff. Merida is another. They both have the scale to make their own equipment. And they both still make frames and parts for other companies.
Cycling iQ did a fantastic piece a couple of years back. They went into some detail to explain how brands make their high-tech bikes.
Often brands will use an OEM to make key parts. You might think you might have a European or American bike, but chances are it’s Asian.
Researching the various bike part makers offers a fascinating look into global manufacturing, but it’s no great surprise to see the Asian region dominating.
The scale of Giant and Merida is mind blowing. And the level of technology they use in modern bikes is just as impressive.
It’s hard to say what will come next.
We’ve gone from steel and aluminium frames to carbon fibre. Modern bikes are as high tech today as many cars — more so in some instances.
Bike technology is clearly progressive. The level of innovation year in year out is outstanding. While other tech industries get the praise and glory, bike tech continues to plug away.
But it’s big business for companies like Giant, Merida, Shimano and Dorel. And at Excel I hope to get a glimpse of the future of this industry…and a better idea of how these companies stand to profit from it.

So, who built your bike?

Article by Sam Volkering and first published in “Tech Insider”