Bike company to electrify exports

Highly charged – Leonardo DiCaprio and Blake Lively sighted on Stromers in the Big Apple Bullspress.de

One small company is attempting to prove that it can buck the trend and expand globally at a time when many Swiss firms are being priced out of the market by the franc.

This content was published on November 20, 2011 - 10:18
swissinfo.ch

The manufacturer of the electric bike Stromer recently got the kind of publicity no money can buy: images of Hollywood stars Leonardo DiCaprio and Blake Lively riding high in Stromer saddles through the streets of New York.

But the brains behind the bike, Thomas Binggeli, was faced with a dilemma. His pedelec (pedal+electric), which was launched only three years ago, had become so popular he couldn’t meet demand. Yet in the long-term, Switzerland is too small a market for the ambitious businessman and his bicycle company, Thömus, to become a serious player in the market.

“We had two possibilities, either look for investors, or sell [the e-bike division] to a larger company that could realise its global growth potential,” Binggeli told swissinfo.ch.

Rumours were rife that the 37-year-old former Swiss young entrepreneur of the year was in talks with investors.

Finally on November 9, a deal was announced. International Sport Holding (ISH), the Swiss company that owns BMC bikes (team of Cadel Evans, who won the 2011 Tour de France), would buy Stromer. Binggeli would get a 30 per cent stake in ISH and become its CEO.

Established brands

ISH was created by Swiss multimillionaire businessman Andy Rihs, whose bike brands are already established internationally.

Rihs is keen to get a piece of the electric-assist bike market that European analysts and manufacturers are very bullish on.

Sales of e-bikes in Switzerland have increased tenfold over the past five years and now account for more than 11 per cent of all bicycles purchased. However, the 39,000 sold on the domestic market last year is a drop in the bucket compared with Europe as a whole where half a million were sold in 2009.

In Germany alone, the association representing the country’s bicycle industry predicts e-bikes will eventually account for between ten and 15 per cent of the market there. In numbers, that’s as many as 600,000.

There is also great growth potential in the United States for premium Swiss e-bikes that include not only Stromer, but the more established Flyer by the firm, Biketec.

“I think the American market is ready for the e-bike. We’ve managed to move all of our stock in the shops in the US where we sell the Stromer. The demand exists,” Binggeli said.

Commuting

Analysts in the US surveyed by swissinfo.ch agree with him. “We project that [the e-bike market] could grow by 20 per cent a year for the next few years with the high price of gasoline and people downsizing in terms of their budgets,” said Frank Jamerson of Electric Bikes Worldwide Reports.

“Getting electric bikes for short commutes instead of using a car may become more established”.

Jamerson estimates that approximately 80,000 pedelecs were sold in the US last year. He said the high price tag of the Stromer – costing between $4,600 and $5,000 (SFr4,190 – SFr4,690) – would not put off buyers, based on the record of a home-grown US company, Optibike, which can’t keep up with demand for its battery-charged two wheeler despite the $9,000 price tag.

The American e-bike expert says a problem could be distribution – getting enough retailers to not only sell e-bikes, but offer parts and repairs for them too.

But US company, Trek, a big player in the bicycle market, is having success with its e-bike models, convincing more than 20 per cent of its US dealers to carry them.

Baby boomers

Trek spokesman Eric Bjorling told USA Today that the 79 million ageing Baby Boomers in the country represented the “low-hanging fruit”, since they want to stay active without exerting themselves.

Jamerson agrees, seeing retirement communities in states like Florida as potential markets. Meghan Cahill of the League of American Bicyclists thinks the growth will start in cities like San Francisco or New York, where DiCaprio and his Swiss e-bike were captured on camera.

“If they are to catch on, it would definitely start in urban areas. If the facilities and infrastructure are available as in cities, it will be easier,” she told swissinfo.ch. According to a recent US census, Cahill said more and more people are commuting to work by bike.

The growth has also caught the attention of manufacturers who normally supply to the car industry. Manfred Gingl, the former president and CEO of auto parts giant Magna, started his own company BionX to make a kit consisting of a battery and motor that is designed to convert any bicycle into an electric one.

And German firm Bosch has gone the same route with its electric “Drive Unit”.

“If we can position ourselves in the premium segment, and if the quality and design are right, then I think we’ll have a good chance of success, even in the US,” concluded Binggeli.

E-bike popularity

In 2006, only 4,000 electric bikes, or pedelecs, were sold in Switzerland. The figure increased to 39,000 last year (of 351,000 bicycles in total) and is expected to top 50,000 this year.

Another hot but much larger market is Germany. It has also been seeing rapid e-bike growth. About 25,000 were sold in 2005 and 150,000 in 2009. The German bicycle industry forecasts the figure will be 300,000 in 2011.

Estimates put sales of electric-assist bicycles in the US at 80,000 last year.

But all of these figures pale in comparison to the Chinese market. Consumers there are expected to purchase more than 20 million e-bikes this year.

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