Bike Manufacturing Industry Briefing for May 2022
Taiwan Covid-19 Situation
Taiwan is now experiencing its first large-scale wave of Covid-19 infections. Bike industry manufacturers continue to operate, although daily increases in infections have placed many people in self-quarantine. We expect to see this continue until July or August, until the Covid wave can peak out and infection rates begin to fall.
In the meantime, Taiwan is continually lowering its travel requirements for visitors into the country. Currently, quarantine requirements for visitors have been lowered to 7 days and then self-health management for 7 days. We expect to see the government continue to proactively lower requirements for entry towards July.
Zero Covid in China
Since April, China has initiated severe quarantine and general lockdown of all manufacturing in the Shanghai region. Since then, the Zero Covid policy has expanded to dozens of cities across China. The effects of this have been felt almost immediately as delivery schedules were disrupted and lead times undeterminable due to the unknown amount of time required for lockdowns.
With Chinese bike manufacturers already dealing with lower order volumes and cancellations prior to the situation, it will be important to see how the bike manufacturing supply chain is able to fulfill orders and if their customers are able to wait indefinitely.
Massive Order Cancellations
Although China has saw lower orders and cancellations following the immediate impact of higher shipping costs to the United States and other countries, we now see the same trend of order cancellations in Taiwan, Vietnam, Indonesia, and Cambodia. The cooling down effect from the historically high demand during the Covid-19 pandemic is now spreading from China to other bike manufacturing countries.
We expect to see a significant drop in demand and at the same time very slow re-alignment from manufacturers to offer better lead times. The most significant lead time factors remain largely from Shimano, SRAM, Tektro, and frame makers – which have few alternatives available for complete bikes. With China in lockdown and the Russia-Ukraine conflict, material availability will continue to be a driving factor for general lead times through the year.
