DISRAELI DOCUMENTS

Taiwan

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For the Taiwanese cycle industry it all happened in 1972. Bicycle manufacturers Giant and Merida were established that year, as were the companies that manufacture the Falcon and SunRace component brands. For the next ten years the Taiwanese bicycle industry cut its teeth on low end ten speeds. I remember a Giant ten speed from about 1980, it had beautiful paint, Japanese chainset and derailleurs, unfamiliar, highly chromed, no-name brakes, pedals, headset etc. and weighed about 10kg more than you expected it to. Oh! how we laughed - in our ignorance of the future.

During the 1970’s the US market gradually became addicted to Japanese manufactured bicycles (and Japanese manufactured cars, cameras, televisions, hi-fis etc...). Then two earthquakes hit at once. One earthquake was the ‘Yen shock’ that partly arose out of this addiction - the Yen doubled in value against the dollar. Suddenly Japan was uncompetitive.

The second earthquake was the arrival of the mountain bike. This had a new look, was a new and disruptive technology and grew a new culture surrounding it. The new consumer demanded new brands. Suddenly the brands and supply arrangements that had dominated the 1970’s were no longer in control.

The Taiwanese companies were perfectly positioned to take over from the Japanese. Taiwan had low wages and established competent bicycle manufacturers. It took the new US-based mountain bike brands five minutes to realise that their future was production in Taiwan rather than Japan.

Taiwanese component manufacturers concentrated on feeding the booming Taiwanese bicycle industry - particularly specialising in low end components, where cost was more important than brand or technology. And so you get the endless catalogues of imitations of Shimano Tourney derailleurs.

Since the mid 1990’s this recipe has started to fail. Taiwanese standards of living (and wage costs) have risen and China has opened up. Taiwanese companies have developed in two ways; firstly they have moved into China in a big way, opening factories with much lower costs, secondly, and much more interestingly, they have started to add value to their own products. SunRace and microSHIFT are definitely trying to produce designs that people desire rather than just accept as part of a cheap bicycle.

Will a ‘Taiwanese Shimano’ emerge and if so who will it be? If I had to bet on anyone, SunRace would be my choice.

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