If a company can be judged by the fitness of its senior management, Giant Bicycles is in rude health. For months, its chairman, King Liu, has been training hard (on one of his own carbon-fibre bikes, of course) for a 1,000km ride around the entire island of Taiwan. Such commitment would be remarkable in any man who also runs the world’s largest bicycle company, but Mr Liu is 73 years old.
From road racers to exercise bikes, Giant’s bicycles and accessories are sold in over 60 countries. For the past three years, the company has sponsored team T-Mobile, reigning champions of the Tour de France (all riding Giant bikes). It manufactures cycles and frames for international names such as Trek, the No. 1 brand in the US, and for Colnago, the legendary Italian manufacturer. There’s more than just the septuagenarian chairman that is healthy about this company: last year its global revenue was over €625m.
Giant’s headquarters are in the small city of Tachia, a two-hour drive from Taipei and surrounded by rice fields. Its president, Tony Lo, could hardly be more informal. Dressed in a polo shirt and chinos, he’s a relaxed figure who’s on first-name terms with his staff. Lo joined Giant 34 years ago, just a year after Liu founded the company. He’s not alone in his long service – most of the people we meet seem to have spent at least a couple of decades with the company.
The factory, where 1,000 people produce 3,000 bicycles a day, is just behind the head office, marked by a large sign emblazoned with the slogan TCO (Total Customer Orientation). On the factory floor, each section is devoted to a different stage: tube-prepping and processing followed by frame-welding, then heat-trea ing to make sure the frame is properly aligned, painting, assembly – everything from brakes to handlebars – and packing.
Giant makes so many different styles of bikes with different specifications that the process is largely done by hand. Frames are welded manually and women with nimble fingers insert spokes, one by one, into the heart of each wheel.
But these are times of change for the Taiwanese cycle industry; with mass-market production largely shifting to China, it has had to reposition itself as a leader at the specialist end of the market. Taiwan now effectively has a two-tier bike industry – one in Taiwan and one operating out of China. Giant has tripled production over the past decade, mostly through its factories in mainland China where it moved production of lower-end models. Plants in Chengdu, Shanghai and Kunshan produce three million bikes a year, half for export, mostly to Japan and the US, the rest for China’s market.
“Chinese production is largely mass market – the bikes are cheap, the quality is OK, but they’re like throwaway toys,” says Lo. “Wal-Mart sells eight million bikes at an average price of just $75 [€56]. We’re not interested in that. We’re not just selling bikes, we’re selling cycling.” Lo’s passion for bikes is apparent. The company’s informal motto is “global giant, local touch” and, even in China, where Giants are sold through 2,000 outlets, it works only with specialist retailers. Last year, the average price of a Giant bike made in Taiwan rose to a new high of €260 (the figure for Taiwan as a whole was €155).
“The mass market now has very slow growth, while the high end has grown enormously in the past 35 years,” says Lo. “Perception is changing and people are willing to spend more on bikes. The $1,000-plus market is growing.” Ninety per cent of Giant’s production at Tachia is destined for export.
“People work and drink hard here, but they’re not exercising,” says Lo. “It’s my dream to make Taiwan a cycling island.” Giant has been working with the government to create a cycle route around the entire country. “It was difficult lobbying for the first 10 years, but now everybody is positive. They realised that it doesn’t cost much and it gets people outdoors.”
Lo takes his role as an industry leader very seriously. He’s chairman of the A Team, a group of Taiwan’s top manufacturers pooling ideas to make sure Taiwan remains a key player in the bike industry. “We need to protect our future,” he says. “Five years ago there was concern that everything was going to China. People were even saying that the Taiwanese bike industry was history. But we have 45 years of experience and investment here, and we believe we can still grow.”
In 2006, Giant launched a professional women’s racing team which is chasing medals at Beijing 2008, and it has extended its sponsorship of the T-Mobile racing team until 2011. Recently, the company has turned its attention to designing bikes specifically for women – a market Lo feels had been neglected – and there are plans to open a shop devoted solely to women’s bikes in Taipei. At this year’s Taipei Cycle trade fair, Giant introduced its new City Storm model, a “lifestyle” bike for everyday use created by Briton Michael Young with the Taipei design company DEM. In spite of its hefty €620 price tag, Lo is adamant it will have no problem finding a market (it won the Best Bike award at Taipei Cycle).
Lo’s next mission is to persuade Europe to take up the electric bike. The Chinese are already buying 18 million a year, the Europeans only 150,000.
“I’m a dreamer,” says Lo. “But we’re lucky at Giant. We’re making a contribution, we’re helping the environment – and we can still make a profit.”
Asia’s top bicycle firms
Merida – Taiwan
After Giant, this is one of the biggest bike manufacturers in the world. It produces all levels, from road to mountain to electric bikes. A true industry innovator, it was the first company in the world to use robots to produce aluminium frames.
Ideal Bike Corporation – Taiwan
Another of the world’s biggest and Taiwan’s No. 3 complete bicycle maker. With plants in Taiwan, China and Poland, Ideal makes around 1.25 million bikes a year globally.
Shimano – Japan
The world’s leading manufacturer of bike components was founded in 1921 by Shozaburo Shimano (with one friend and a lathe). Lance Armstrong won seven Tours de France using Shimano’s Dura Ace components.
Ming Cycle – Taiwan
Founded in 1989, the product range includes the Strida and Swivelhead folding bikes both by British designer Mark Sanders, and the two runners-up for the top award at this year’s Taipei Cycle trade fair.
Topeak – Taiwan
The world’s bestselling brand of bicycle accessories. Products unveiled at Taipei Cycle 07 include the new Allay saddle (whose slogan reads: “Where your sex life meets the road”) and the Jango concept bike that integrates a number of Topeak accessories and is pitched at commuters, or “easy bikers”. Its first customer? Mercedes-Benz, which will release customised Jango designs under its name this summer.