Bikes and COVID-19: Giant cannot catch up with the high demand from customers (part 1)

Demand for bicycles skyrocketed during the epidemic season, leaving the world’s largest producer of the item in time.

Due to Covid-19, gyms are closed, bus and train travel is limited, and outdoor modes of exercise are preferred. This caused the sales of bicycles to soar around the world. As a result, bicycles are in short supply everywhere. Giant, the world’s largest producer of bicycles, expects their supply to continue to be tight in the near future.

US President Donald Trump started a trade war with China in 2018. Giant moved some of its manufacturing operations for the US market from mainland China to the company’s headquarters in Taiwan to avoid taxes. Some years later, the European Union imposed anti-dumping duties on electric bicycles which comes from China. Therefore, Giant also started producing this kind of product in Taiwan.

But when a pandemic broke out, the demand for bicycles skyrocketed, and Giant had to reverse operations. Because the facility in Taiwan is overcrowded, they have no choice but to increase production in mainland China, although this incurs additional tariff costs for the company.

There’s no other place in the world like China that can instantly accelerate from zero to 100 like a sports car.

This year, the Trump administration has temporarily lifted tariffs on a wide variety of Chinese goods deemed not strategically important. Bicycles was counted in this list.

However, the tariff stop on certain types of bicycles has expired this month. This means that Giant can once again adjust the supply chain. There are so many trade barriers that make them stuck between the two great powers.

Giant was famous for decades before producing bicycles for the iconic American brand Schwinn. After that, the company became a true force in the global bicycle industry. Today, the company operates 5 factories in China, which account for 70% of production.