For the past two weeks, the biggest news story has been the spread of the coronavirus (COVID-19). The actual effects of this flu-like illness have yet to have a widespread impact on North America, though that is now very likely. But even if the disease has not impacted your daily life, fears and economic tremors are already being felt far and wide.
How Will The Coronavirus Impact The Cycling Industry?
Uncertainty related to the impact of the coronavirus has wracked global stock markets, wiping out months of gains and, despite today’s rate cut by the Federal Reserve, it appears we’re just getting started. China, Taiwan, and Vietnam are the key producers of cycling components, and all these nations are being severely impacted by illness, quarantines, and factory shutdowns. The Taipei Cycle Show, arguably the most important cycling industry trade show, was canceled in response to the rapid spread of the disease.
Stateside, the North American Handmade Bicycle Show just announced it is postponing its upcoming show in Dallas, Texas, amid fears related to the coronavirus. “Based on current news reports and travel restrictions, and in talking to many NAHBS exhibitors, media, and partners over the past week, I’ve made the difficult decision to postpone NAHBS and reschedule this year’s show. As a global show that attracts people from all parts of the world, and in evaluating the current variables and public health risks, I feel this is in everyone’s best interest,” said Don Walker, NAHBS founder and president. NAHBS was initially scheduled for March 20-22; it will now be held from August 21-23.
The Port of Los Angeles, the single largest seaport for imports arriving to the US from Asia, projected a 25-percent drop in container volumes.
According to industry experts, the spread of the virus will determine how deep its effects are felt. Many brands that produced frames in China shifted production to factories in other Asian nations in response to the trade war between the United States and China. This strategy protected the companies from tariffs but may not shield them from the threat posed by this new disease.
EVIL’s COO Jason Moeschler notes that bike many bike brands will face the same issues if the virus becomes a global pandemic. “A few of EVIL’s suppliers source parts from China for manufacturing in Taiwan. We are experiencing delays from those suppliers. Luckily, EVIL’s stock is ok, so there will be little to no impact. If the virus spreads outside of China, the picture will change for everyone, and the situation will erode quite fast,” Moeschler said.
Tire manufacturers, including WTB, are already feeling the effects. “We work with production facilities in provinces that directly border the Hubei province, which is where the coronavirus originated. There’s a heightened sense of fear in neighboring provinces, as well as additional shutdown regulations implemented due to their proximity to the epicenter of the outbreak. Weeks ago, we were informed that many employees would not return until March, and it could be pushed back even further, said Clayton Wangbichler, WTB’s public relations, and product marketing manager.
“Bottomline is that we, like every other company in this industry, produce bike parts and in the end…bike parts can wait. None of us at WTB would put our production deadline before the health and wellbeing of any individual who is working to make our concepts a reality,” Wangbichler added.
What Does This Mean For New Bike Purchases?
Many experts I spoke with stated that product availability is still good, but the situation is very fluid. According to Michael Zellman at SRAM, the company is still is operating on standard 30-day lead times.”We have not determined if these lead times will be affected, but we will inform customers immediately if they are,” Zellman said.
One product manager I interviewed, and who didn’t want to be quoted by name, had a much more dire outlook for bike and component availability this season. “If it’s not already on a boat from Asia to the United States, it’s not going to be here anytime soon,” they noted.
This pessimistic sentiment echoes my own experiences with canceled press launches. Two media events I was scheduled to attend have been postponed due to a lack of product availability.
So what should you do if you’re considering a new bike purchase? Given what I’ve learned from speaking with industry experts, here’s my advice: if you’re comfortable with your current financial situation, it is better to buy sooner, rather than later. The latest 2020 model year bikes will be in short supply in the first and second quarters of the year and possibly longer. The breakdown of supply chains and resulting production delays may also discourage retailers from discounting previous model-year products since they won’t have many new bikes to replace them. Prices for used bikes and components may also rise if these production delays drag on through the summer.
Last but not least, get a flu shot and wash your hands—a lot.