SOFIA, Bulgaria – The initial decline in production at the start of the pandemic followed by a huge demand, disrupted the Bulgarian industry. A quick response to the rapidly changing situation benefited most of the Bulgarian manufacturers. The end result is a record year. While the 2020 export volume declined, the shift towards e-bikes resulted in the biggest export value ever.
The transformation of the bicycle industry in Bulgaria in 2020 didn’t happen overnight, although the pandemic did speed-up this process. The switch to e-bikes is the result of investments by almost all leading and new Bulgarian manufacturers that recognised the potential of e-bikes as long as a decade ago.
Growth in export volumes
The e-bike export growth started some years ago but accelerated in the first half of this year. Between January and July, Bulgaria exported close to 193,000 e-bikes, almost a 50 % increase compared to same period in 2019. Eurostat data for the second half of the year is not available yet, but the trend is very obvious.
At the same time, the export of regular bicycles decreased by 29% from 430,080 units in first half of 2019 to 305,492 units in same period in 2020. The full picture of this transition becomes clear when looking at the export value.
Leading export markets
Between January and July, the total export value of bicycles and e-bike combined increased from €188 million in 2019 to €237 million in 2020. The average price of exported regular bicycles also increased by 11.5 % to €220 per unit and by 9% to €878 per e-bike.
With Bulgaria’s main trade partners in Germany, Belgium and Denmark, the export volume and total export value are expected to increase substantially when the results over the second half of 2020 will be available. Next to the three main trading partners, Bulgaria still exports a substantially high number of regular bicycles to neighbouring country Romania.
Investments in e-bike production
Over the past years, the Bulgaria industry invested in know-how, production facilities and equipment to spark this growth. The increase in e-bike exports might look like a direct result of corona, but it is not like that for the manufacturers involved. They were already planning significant growth in 2020.
Probably not on such a large scale, but the e-bike manufacturers anticipated quickly this year as soon as demand started to increase. As they had planned a considerable rise in production volumes in advance, they could also increase manufacturing levels without experiencing supply shortages.
Bulgarian bike valley
Like many other assemblers in Europe, also the Bulgarian bike valley is facing many uncertainties for the near future. Everyone is aware of the new lead times and supply shortages, which will almost certainly have an impact on the production and result in delivery delays. Some even expect financial difficulties or try to find solutions to counter such issues.
We are also continuously working to optimise the deliveries both on the short-term and mid-term
Leader 96 representative’s answer on this sums up the effort of the whole Bulgarian industry: “We have taken multiple measures including close cooperation with all our customers in terms of delivery time and alternatives, as well as working on planning for at least one year ahead. We are also continuously working with all our suppliers and forwarders to optimise the deliveries both on the short-term and mid-term.”
Industry expands capacity
Though supply chain constraints might be holding back Bulgarian bicycle manufacturers for the moment, investments in the production facilities continue. Last year Cross opened a new painting facility and four dedicated e-bike assembly lines. Scheduled to open this spring, Cross is also building a new warehouse and logistics centre covering 12,500 square meters.
Leader 96 invested €1.7 million in the reorganisation of its production, a new semi-automatic powder painting shop, a new warehouse for finished goods and additional production lines. They also bought new land for the expansion of their warehouse. After recent investments Maxcom increased its the production volume within its existing facilities.
A new player on the market is Cycle Gets. This company has recently completed a new factory in Sofia with a production capacity of 250,000 units annually. These are just some examples of investments by companies who are members of the Association of the Bicycle Producers in Bulgaria (ABPB).
Looking back on 2020, also the Bulgarian industry had to do its utmost to protect the health of its workers and deal with the supply chain constraints. At the same time the industry strengthened its position as manufacturing and assembly partner for the some of the biggest European markets. But all these investments were not only focused on export markets.
Also, domestic consumption increased considerably this year. After a slow start the local market expanded by an estimated 10 to 20% both in volume and average retail price. In Bulgaria, mountain bikes are still the top sellers. Nevertheless, the demand for e-bikes is slowly growing as well, while commuting by bike is booming. Similar to many other locations in Europe, inventory levels at IBDs are considerably low at the moment.