‘Braking’ Into The Middle Market In The Bicycle Industry
Finding the balance between performance and cost.
The bicycle market has changed gears in recent years. Despite a drop in sales between 2008 and 2009, the industry is beginning to recover. Bicycle manufacturers have enjoyed significant growth worldwide over the past two years and this is set to continue well into the future . And a number of new trends look poised to alter the landscape of the cycling industry in the coming years.
In the USA and the European Union, recessionary pressures have led to a decline in disposable income. The brunt of this has been borne by middle-class consumers in these regions, whose buying power is set to remain stagnant for the next five years. More and more, consumers are looking for products that offer high-performance and durability without the expensive price tag. Mid-market bicycle brands, that develop moderately-priced models, face the greatest challenges to meet consumer requirements in these countries .
Robust economic growth in the BRIC nations - Brazil, Russia, India and China - has led to a rise in disposable income and a new and burgeoning consumer class. This in turn has led to a boom in the sale of higher-quality products in the region, particularly in the bicycle market. Also, as more people move to the cities in these countries, they are looking for bicycles that are robust and hard-wearing, attributes necessary for urban life .
The growing popularity of cycling globally has led to an increasing number of town planners to include the bicycle in their transport policies. National governments are introducing cycle lanes in major urban centres, from Amsterdam to Shanghai  to improve road safety for cyclists. There has also been a growth in the implementation of cycle hire schemes, such as the Bixi scheme in Montreal, Canada, and Barclays Cycle Hire in London, UK. Congestion pressures in cities globally are driving the growth of these schemes. In addition, an increasing number of local governments are introducing bye-laws to permit folding bicycles on transport networks, such as the London Underground, further encouraging the development of the bicycle as a viable means of urban transportation.
In this climate, bicycle manufacturers are looking for more cost-effective ways to balance consumer demands for performance and cost-effectiveness in order to thrive in a competitive market. For many manufacturers, it is often the smallest components that can make all the difference in marrying cost and quality.
The Rise of the Middle Market
In order to tap into the middle market, bicycle manufacturers face challenges that must be overcome in the design stage. It is important to take into account consumer demands for quality, performance, longevity and safety, all the while bearing in mind the end cost of the bicycle.
Despite restricted incomes, consumers are still demanding high performance from their bicycles. It is important that the bicycle can offer a smooth and comfortable ride over any terrain the vehicle might traverse. For many consumers, the bicycle must be a pleasure to ride and not simply a basic commuter tool. This requires the bicycle wheels and suspension system to be designed to a high quality standard and made of materials and components that can offer the optimum performance for the right cost.
Consumers’ search for value has led many to weigh the initial price of the bicycle with the total cost of ownership. For many, the bicycle that offers the best value for money is not necessarily the one with the lowest price tag. Rather, the bicycle that offers the most reliable performance and the longest life-span is the most cost-effective as it will not be necessary to repair broken components or replace the bicycle for longer periods of time. This again requires manufacturers to source high-quality materials to ensure their products meet consumers’ requirements for longevity.
With the rise of the bicycle as a mode of urban transport, safety has become of paramount concern for consumers and governments alike. Bicycle brakes need to be able to react quickly and efficiently in the event of an emergency stop and cyclists need to be confident that their steering is sufficiently responsive to prevent collisions. The components that make up these systems must be capable of offering optimum performance to ensure the bicycle is a viable mode of transport in increasingly congested towns and cities.
While consumers want their bicycles to meet all of these requirements, they still desire a product that is cost-sensitive and economical. It is necessary, therefore, for manufacturers to investigate and source materials and components for their bicycles that enable them to offer performance, safety and longevity and allow them to offer the right price tag to appeal to cash-strapped buyers.
Finding the Middle Ground
Like the customers who are considering a bicycle purchase, manufacturers must think carefully about which components will best suit their performance needs. It is becoming more necessary to move away from traditional component designs and materials that may no longer be suitable to market conditions, for example due to cost or weight. The best components, though small, marry consumer requirements for performance, safety, longevity and cost-effectiveness, all of which can prove to be the deciding factor in a purchase, both for consumers and bicycle producers. There are a number of areas in the bicycle that offer opportunities for manufacturers to meet consumer demands while reducing cost.
In the bicycle brake cable, it is necessary to use materials that meet high standards for performance and wear. Many consumers require their bicycles, the brakes in particular, to be as responsive as possible to ensure optimum safety when sharing the road with automotives. It is particularly important in this case for manufacturers to select materials for the brake cable that offer the best performance for the bicycle’s intended price range. They must be robust to withstand wear inside the brake cable and to withstand exposure to adverse weather conditions. Steel is the preferred material for use in the inner wire and housing of the brake cable, due to its durability. However, the steel wire can be damaged by ingress of rainwater or fray due to constant wear, affecting the performance of the cable. Traditionally, brake cables protected the steel components of the cable by lubricating the inner wire with light machine oil or by using a plastic cable liner to reduce wear. These solutions can become less effective over time, as they are worn away during use.
Modern brake cables use Polytetrafluoroethylene (PTFE) coated cable liners which protect the wire and the housing from contact with rainwater while significantly reducing the stick-slip effect within the cable, improving the responsiveness of the brake and enhancing safety. The PTFE is a hard-wearing dry lubricant with the lowest coefficient of friction of all known solid materials that is used in numerous applications to reduce friction and stick-slip effect. A cable liner coated in this substance offers consistently lower friction values over the life of the component, ensuring the bicycle brake suffers no degradation in performance.
To ensure maximum comfort for the cyclist, it is necessary that the shock absorbers offer consistent high-quality performance with little or no degradation in performance over the course of the bicycle’s lifetime. Key to the shock absorber’s effectiveness is the bearing used inside. Traditionally plastic bearings have been used in suspension systems to protect the individual components from wear. Such bearings have the advantage of being cost-sensitive, but they offer higher friction values and are not robust, meaning increasingly poor performance over time. High-performance bicycles feature steel rolling-element bearings in their suspension systems. These are robust, long-lasting and offer low stick-slip effect, enabling these bicycle models to meet consumer demands for performance and longevity. However, rolling-element bearings can increase the weight of the suspension and the bicycle as a whole. In addition, rolling-element bearings can be expensive and have a negative impact on prices in a competitive market.
PTFE-coated composite bearings have been developed with the middle market in mind to offer the low friction values and durability of the rolling-element bearing with the cost-effectiveness of the plastic bearing. Weighing one tenth of a traditional rolling-element bearing as well as consisting of one single component, PTFE bearings also have the advantage of enabling bicycle designers to reduce the size and simplify the engineering of their suspension technology, decreasing the amount of material required to manufacture the bicycle, and further lowering cost.
Bicycle headsets also require high-quality materials to ensure they are responsive during the bicycle ride for safety and comfort purposes. Again, rolling-element bearings have been traditionally used to ensure a smooth riding experience for the cyclist. However, the cost of these bearings can be inhibitive for manufacturers. PTFE-coated bearings, with their wearing resistance and excellent friction values, can meet consumer demands for responsiveness and durability without the expensive price tag for bicycle producers.
A Bright Future for Bikes
Over the next four years, the bicycle market will continue to grow. By 2015, the global market is expected to exceed $77 billion . The middle market will comprise an increasingly large share of this market. In order to take advantage of this growth and meet the needs of consumers, bicycle manufacturers need to select components and materials that offer the highest performance while remaining cost-effective. By finding the right balance between quality and cost, brand owners can guarantee a strong relationship with consumers well into the future.
About The Author: Paul Humphreys, Global Market Manager Bicycle, Saint-Gobain Performance Plastics
Paul joined Saint-Gobain Performance Plastics in 1990, initially spending ten years in Sales and Sales Management in the UK. Following this Paul was District Sales Manager in the automotive business for seven years and then specialised in the bicycle market in North America. Prior experience in the bearing industry includes SKF and Schaeffler.
In his current role as Global Market Manager Bicycle, Paul combines over 20 years worth of expertise in Saint-Gobain products and technologies with a thorough understanding of the bicycle market, to implement global strategies, grow sales and develop products that continue to meet the demands of the industry.
About Saint-Gobain Performance Plastics Bearings and Tolerance Rings SBU
Saint-Gobain is a global leader in the design, production and distribution of innovative, high performance materials for industry and employs around 195,000 people. With operations in over 64 countries, Saint-Gobain is the 60th largest employer and among the top 100 global industrial companies worldwide. Last year, Saint-Gobain achieved global sales of over €42 billion. Saint-Gobain is listed on the stock exchanges of Paris, London, Frankfurt, Zurich, Brussels and Amsterdam. Saint-Gobain’s global strategy is focused around three core markets: Construction Products, Innovative Materials, and Building Distribution; and, the company is committed to play a leading role in developing energy efficient innovations for the housing and construction sectors, protecting the environment, and managing growth in a sustainable fashion.
With 15 sites and six R&D centres globally, the Bearings and Tolerance Rings Group, a division of Saint-Gobain Performance Plastics, provides ‘engineer-to-engineer solutions-in-motion’ to high volume international OEMs in the automotive, leisure, energy, industrial, and other markets. Backed by a heritage of product innovation, technology, advanced materials and market leadership, they are dedicated to working with customers using their extensive engineering expertise to deliver standard and custom solutions in NORGLIDE® bearings, RENCOL® tolerance rings, SOLGLIDE bearings, JOINSHIM® rings, and NORSLIDE® cable liners that meet the most demanding applications. For further information, please visit: www.bearings.saint-gobain.com
Global Industry Analysts Inc Report: PRWeb – 15th September 2010: http://www.prweb.com/releases/bicycles_adult/mountain_electric_bikes/prweb4515734.htm
 The Cycling Experts 2010: http://www.thecyclingexperts.co.uk/the-cycling-industry/opening-a-bike-shop/
 Global Sherpa – 5th January 2011: http://www.globalsherpa.org/world-bike-market-eco-indicator-international-development
 Oddstuffmagazine.com: http://oddstuffmagazine.com/most-bicycle-friendly-cities-in-the-world.html