INDUSTRY OPINIONS: Why buy homegrown? - BikeBiz

INDUSTRY OPINIONS: Why buy homegrown?

In recent months there have been increasing whispers that UK manufacturing may re-emerge as the cost of imports spiral. Mark Sutton talks to some British manufacturers about UK-made product and its appreciation in value...
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The cycle industry has a long history within the UK, however the past 20 years has seen UK manufactured products and businesses fall to all but a few. The drive to purchase from overseas has often been driven by cost, not quality.

One of our recent successes was gaining the Brompton account for supplying their brake pads. This account was gained due to rigorous testing and our UK-made product was found to have the best performance and durability.

The advantages of local sourcing are that dealer stocks can be maintained at a low level with a guarantee for replenishment when required, along with the great advantage of reduced air or sea miles.

Dealers also avoid the risks of buying product in advance, and in a foreign currency. Many cycle components for 2009 will have seen massive changes to the landed cost in the UK due to these changes. These variables do not occur with a UK-based supplier.
John O'Brien, MD, Fibrax

Us UK manufacturers have finally got a real price advantage over importers this year.

However, that a product is UK made should be of only incidental concern. A product must be well-designed, functional and competitively priced. A British flag on the packaging can be a small incentive for some people, but it won’t help to sell a badly designed product.

Crud will be increasing production this year, with new and revised products. I am totally confident in the viability of cycle retailing going forward.

I can’t really talk for the importers, but I find that there are still small manufacturers who can do excellent work at reasonable prices in the UK. You just have to find them. I would imagine you also have far more control on quality, lead times, and rejections due to faulty manufacture than you would on an overseas shipment. You also don’t have to fly around the world on a regular basis to keep tabs on the above. That is a huge benefit of having each process in-house and is hard to quantify.
Pete Tompkins, MD, Crud

Importing bikes and accessories manufactured in Asia inevitably leads to higher UK RRPs when Sterling is as low as it currently is. We are not entirely insulated from the weakness of the Pound, as many of our parts and commodities are priced in US dollars and Euros; but foreign currency-denominated costs represent a minority of our direct costs, so the impact isn’t huge.

The result was clear to see in the pricing for 2009; whereas we raised our UK retail prices by three to five per cent, most brands were hiking theirs up by 15 to 35 per cent. Those who buy Bromptons tend to be drawn to the brand by its unique characteristics and are, to that extent, less price-sensitive than the average consumer; but with our prices becoming ever more competitive relative to some Asian-built brands, we may well see more price-conscious consumers deciding to ‘trade up’.

The economic downturn is not something that is of particular concern to us; the industry tends to do well in recessions. The early indications are that our UK sales are stronger than ever, with demand well ahead of this time last year; one or two of our European distributors are being a little bit more cautious than they were in early 2008, but most of our Asian and North American markets continue to grow exponentially, continuing the trend from 2008.

With the currency volatility, our upgraded range is actually priced lower than it was in 2008 in most overseas markets. We’re even looking to recruit and raise production here.
Emerson Roberts, marketing manager, Brompton

Our production is based in glamorous Stockport, Greater Manchester. We employ about 80 people here and this is our only manufacturing facility.

The weak Pound against the Dollar and Euro should certainly help companies dealing with UK-made product. Prices from overseas sourced competitors are increasing rapidly, while home-made product prices will see much smaller rises.

Our greatest concern for 2009 is that it has been difficult to make accurate forecasts. We are working in a market based on discretional spend, which in a downturn is the first place people look to cut. However, we are hopeful that because the parts Renthal sell to the Motocross market are consumable, if people carry on riding, perhaps without purchasing a new bike, they will need to buy our products. We are also excited about expansion into the cycle market, which of course is all additional business.
Rees Williams, Marketing, Renthal

With 99 per cent of cycles sold in the UK being imported from largely Dollar-based economies, it is not surprising that prices from distributors have increased by about 40 per cent over the past 18 months as a result of increased base cost prices and more importantly, the adverse exchange rate. Our prices have been held as our wage rates are stable and any increases in raw materials and component costs are countered by production efficiencies we have introduced, such as a new paint plant.
Adrian Williams, MD, Pashley

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