Friday, October 24, 2014

Taxes and credit shortages are bicycle sector

The expansion of bike lanes in the city of São Paulo has increased consumer interest in adopting the two-wheeled transport. Some manufacturers record growth in sales, but the motion is not widespread. For the most part of this industry, which in recent years shows stagnating and this year is heading towards a likely pullback due to the economic slowdown, the effect is still small. But there is the expectation of vigorous expansion in the coming years.
The high tax burden and a lack of funding programmes impede purchases for lower-income consumers, who are already with the Pocket committed to other expenses. Some retailers, however, reported growth in sales, mainly of imported bicycles (see Retailers detect higher demand).
Houston, which produces an average of 800 thousand bicycles per year in a factory complex in Teresina (PI), asserts that the lanes must heat the bicycle market from this year and, mainly, in the long run. "Our expectation is positive. Issues such as sustainability, health, sports practice and encourage clean transport are increasingly bullish, "said Adilson Custódio, commercial Director. The production company must move into the double digits in 2014, he said.
The Brazilian Soul Cycles, manufacturer of about 40 thousand bicycles per year, also designs expand sales in 2014. Founded in 2010, the company is in a phase of expansion. São Paulo is the second largest market for the company, concentrating on 35% of revenue. The main market of Soul Cycles, which has factory in Itajaí (SC), is the southern region, target of 42% of its production.
The entities that represent the bicycle sector do not have specific data on production and sales in São Paulo, which makes it harder to recognize immediate changes in the segment. "There is no licensing, which makes it difficult to follow changes in volume," says José Eduardo Goncalves, Executive Director of Abraciclo, entity that gathers the manufacturers of bicycles, motorcycles, scooters and other vehicles of two routes in the country.
According to data from Abraciclo, the number of bicycles manufactured in Brazil has remained stable in recent years, around 4.5 million units. The average prices in the country varies from r $ 250-for a simple version without speed-r $ 3 thousand. A collapsible template, suitable for integration with other types of transport, costs about $ 1.5 million.
For the Brazilian Association of industry, trade, import and export of Bikes, parts and accessories (Abradibi), the price of the products is a factor that makes a stronger demand increase. Ana Lia de Castro, Executive Director of Abradibi, says that the high volume of taxes makes bicycles and the lack of funding programs causes the vehicle to lose attractiveness for motorcycles in peripheries.
"In big cities, like São Paulo, since the start of the cycling infrastructure programs, bicycles left their garages. But this is not reflected in the market, "says Ana Lia. Affected by the economic downturn, the sector suffers retraction. A questionnaire sent by the Abradibi to 200 manufacturers, the average responses indicates 14% drop in sales in 2013 and a decline of about 20% this year.
Imports of bicycles also decreased this year. According to data from the Ministry of development, industry and foreign trade (MDIC), the first half imports fell 24.2 percent in volume, to 102.6 thousand units. In financial volume, there was an increase of 6.95%, to $ 18.6 million.
Ana Lia, of Abradibi, explains that the manufacturers that have invested in the production of higher value-added models managed to maintain or increase revenues in recent years. "Almost half of the country's bicycles are used as a means of transportation, but the main investment of manufacturers going to sport bikes, which are more expensive."
During the campaign for re-election, President Dilma Rousseff (PT) advocated the bikes as a means of public transport, and proposed the creation of an exclusive line of financing for its acquisition. The Mayor of São Paulo, commanded by Fernando Haddad (EN), embraced the proposal. The city has more than 100 km of roads for cyclists and offset the city's goal is to reach 200 kilometers until December and bend the extension until the end of 2015.
Gautam, from Abraciclo, says that the increased visibility of bicycles encourages the use of means of transport, but that's not enough for a recovery in the sector. "So that the domestic industry can compete on quality and have better price that the Asian, the production has to add parts and pieces of higher added value," he says. The organisation suggests a new basic productive process, with the nationalisation of part of the investment in new products and components. Currently, around 80% of the parts are imported, coming mainly from Asia (India, China, Taiwan and Japan).
"The lanes will bring an increase in consumption, but we're concerned about the issue of infrastructure," says Alexander Adoglio, marketing manager of Soul Cycles. "There are points to the rider, of mechanical, hydration, as well as places to store the bike." The improvement on that Board would bring more cyclists on the streets.
According to Adoglio, the most wanted product is the bicycle of varied uses. "Most Brazilians don't buy bikes for a single application-only work or sport-, as occurs in other countries," he says. The average sales price of the models is of r $ 3.5 thousand. Depending on the lanes, the Soul Cycles studies expand the acting in the segment of services in 2015, with support points to cyclists. The company already has a concept store that offers cafeteria, keepers and mechanical workshops for cyclists, next to the University City, in São Paulo.
Valor Economico
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