Bikes Outsell Cars Again! (hint: not where we live)
New figures showed bikes outsold cars in 2007 for the eighth consecutive year. In Australia.
The nation that’s larger than our own sold a record 1.5 million bicycles in 2007, compared to 1.0 million cars.
With bikes being about 58% of the total, and cars about 42%, the Aussie government accordingly spent a whopping 1% of its infrastructure expenditures on projects dedicated to cycling.
Understandably, among the reasons cited for the continued popularity of bicycles there, bike-friendly roads wasn’t mentioned.
A spokesman said cycling has become the fourth most popular physical activity, but didn’t mention the other three. “Australians have rediscovered the bicycle as a great way to commute, with cycling trips to work growing at an average 22 percent across Australian capital cities.” In addition to rediscovering the bicycle, the spokesmen said they also rediscovered the Internet, and reinvented the wheel.
Meanwhile, back in the states where progressive minds rule and technology is king, where we exercise incessantly when chosen for the Biggest Loser show, where we’re all about fighting global warming and spurious wars (oops, wrong soapbox), and where Hollywood reinforces that thin-is-in — we sold the fewest bikes in any year in the past five.
Ouch.
The U.S. bicycle industry was a $5.8 billion industry in 2006, down from $6.1 billion in 2005 (an all-time high, corresponding to the final year of the reign of Sir Lance Winsalot).
Total bikes sold in the U.S. were 18.2 million in 2006, with three quarters sold via the big boxes at an average selling price of $72. Hmmm, imagine the quality of bike you’re getting for less than the price of a decent jersey.
Shockingly, 99 percent of these were imported from China, Taiwan and Hong Kong. Dwarfed by the big box retailers offering bikes from far-away lands (built by kids, for kids, it would seem) at everyday low prices! were the 4,600 soup kitchens/Local Bike Shops selling quality bikes and doing things big boxes don’t do, like fittings, repairs, and expert assembly by people at least old enough to shave occasionally.
While they sell only 17% of total units, our beloved LBSs rang up about half of all the bucks spent on bikes, because they sell better bikes for higher prices. What a concept. LBS price points generally start around $200 and average $422, give or take and, as we all know, only the limit on you charge card sets the “maximum” price.
Nevertheless, the number of specialty bicycle stores has declined in recent years because they don’t make a lot of money.
Rumor has it too many LBS owners think the bike biz is just a hobby where you’re not supposed to make money, and too many cyclists are notoriously cheapos even when they roll in on five thousand dollar bikes (Jimmy, do I get a club discount on bidons?)
About 43 million Americans rode bicycles in 2005, up slightly from 2004. Participation peaked in 1992 at 54.6 million, then we got SUVs and people forgot how to move their legs, then they got fat and couldn’t find them anymore.
Cycling is the seventh most popular recreational activity in the U.S., behind exercise walking, swimming, camping, fishing, exercising with equipment, and bowling. Note: most of these things don’t involve sweating. I repeat, we’re behind bowling. God help us.
About 95% of those who ride bicycles do so for recreation or fitness, and 5% for transportation purposes, and a slim 0.3% for racing. Altogether, that’s 100.3%. We know.
Despite lackluster trends in people buying and riding bikes, the good news is that cycling facilities construction is at an all-time high. The industry has 2,000 companies involved in manufacturing and distributing cycling products to retailers, and approximately 100 different bicycle brand names. You know that if you’ve read the latest product review in Procycling. It’s about as svelte as a 1904 Sears catalog.
Mountain bikes continue to be the largest single bicycle category for LBSs, though the share of Roadies is growing and MBs are shrinking. Comfort bikes, i.e., low tech hardtails with fat seats, are the fastest growing segment at the moment.
Companies specializing in bicycles for the independent bicycle dealer channel of trade include Trek/Fisher, Giant, Specialized, Raleigh America, Pacific Cycle (Schwinn and GT), Haro and Cannondale, ranked by market share. Okay, who rides a Haro?
Your LBS – Not Fort Knox
The average specialty bicycle retailer had gross sales in 2004 of $550,000 per year, 91% of them had one store location, and average store size was 4,822 square feet.
Their revenue sources were 47% from bicycles, 35% parts and accessories, 11% bicycle repair, 2% bicycle rental, and 5% other, which included coins found under couch cushions.
The average store sold 650 bicycles per year and carried five bicycle brands. Gross margins on bicycles averaged about 37%, though the break-even point was 42.5%. Translation, LBSs lose money selling bikes. However, margins on goods other than bikes are 48%, helping the LBS to live in financial purgatory with the advantage of no income tax problems.
U.S. Funding for Cycling
After a two year delay, the U.S. federal government finally passed it’s five-year, $286.5 billion transportation funding bill called SAFETEA-LU. It stands for Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy for Users. Actually, it does; there’s no way to make that kind of stuff up.
$4.4 Billion For Bikes, No, Make That $2.5bn
The bill authorizes much as $4.4 billion in new federal spending on bike paths, trails, and related programs. However, if actual spending follows historical patterns, only 55% of this total will go to bicycle and pedestrian projects, for spending in the range of $2.5 billion.
Easy come, easy go.
Doing the math again, $2.5 billion out of $286.5 billion of total transportation infrastructure spending, equals less than 1.0% going to cycling/pedestrian friendly projects in the U.S. — which is almost identical to the portion allocated in Australia.
Some things are universal, it seems.
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