Download Action Wheels Optimistic About 2014 Tariff-Free

SHOW DAILY
18
DAY 2
Action Wheels Optimistic About
2014 Tariff-Free Philippines Exports
A
ction Wheels has assembly
plants in both the Philippines
and in Jiangsu Province,
China. With annual production of
over a million bicycles, the company
has overall turnover amounting
to around US$100 million. Action
Wheels’ main products include
bicycles, e-bikes, and electric toy
bicycles. Due to the poor global
economy, exports to both Europe
and America have been in slight
decline over the last year. “Annual
exports are expected to decrease
by 10% from last year.” said GM
Frank Lu.
Managing their own
brand in China's
domestic market
Action Wheels' Jiangsu
plant is located in Jurong City
which is close to Nanjing. The
area covers about 119,000 square
meters and the plant covers
more than 33,000 square meters.
The company has an annual
production of about 700,000
bicycles, 300,000 electric toy
bicycles and about 4,000 e-bikes.
Action Wheels' Jiangsu plant has
continued to improve production
processes and enhance
automation, resulting in a decline
in the workforce which now
stands at around 1000 workers.
Lu recognizes that Nanjing has
a serious problem with a lack
of laborers – so the company's
steps to increase automation is a
conscious move by the GM.
Lu is also optimistic about
the future of China's domestic
market. Since last year they have
been in cooperation with Kawasaki
and have launched a series
of bicycles with the Japanese
brand. They had planned to open
two specialty stores for China's
domestic market, but unfortunately
the plan has been suspended due
to tense relations between China
and Japan. However, the bicycles
which are licensed by Kawasaki
will continue to be sold in Europe.
In the future, they will work with
other well-known brands to launch
bicycle products for the Chinese
domestic market. Lu believes that
the Chinese domestic market is
getting better and better, but won't
be involved with cheap bikes for
ladies and e-bikes. If Taiwanfunded plants in China want to
compete with Chinese enterprises,
they must firstly build their own
brands, and then have technology
as backing. He believes they must
focus on mountain bikes and highend products.
Duty-free exports to
the EU will drive the
Philippine bicycle
industry
Action Wheels' Philippines
plant was established in 1994
with 350 employees, covering
an area of about 10,000 square
meters This plant only produces
bicycles, with an annual output
of about 300,000 to 400,000
▲Action Wheels 's main products include bicycles, electric toy bicycles, and e-bikes.
units, it only exports to Europe.
Lu said that at present, Vietnam,
Cambodia and the Philippines
have no problem with antidumping duties for exports to
Europe. Cambodia has had
the advantage of zero tariffs
for exports to Europe, while
the Philippines has been
exporting under a 10.5% tariff
to the EU. The good news is
that under the active efforts of
the Philippine government, the
EU has officially announced
duty-free Philippine product
exports to the EU will continue
to expand to more than 4,000
items. Bicycles have qualified
as a duty-free product and this
will become effective in January
2014. When the new legislation
is implemented, Action Wheels,
as well as their customers, will
see huge savings.
There are only two bicycle
assemblers in the Philippines, so
the local bicycle industry is just
getting started. The Philippines
GDP grew by 6.6% last year,
and Lu expects that the country'
ec onomy and mar ket will
continue to grow. Lu also believes
that more assemblers will set up
their plants in the Philippines,
following the introduction of
zero-tariff exports. Regarding
Shimano’s recent plan of setting
up a plant in the Philippines, Lu
expressed that his company will
benefit from faster delivery and
lower shipping charges. Recently
some Taiwanese parts factories
▲Frank Lu is optimistic about the China
domestic market and the Philippines bicycle
industry.
came to the Philippines to study
this market, considering whether
or not to follow the footsteps of
Shimano and to setup a plant
in the Philippines, but currently
there is no specific news.
Compared to other countries
in Southeast Asia like Vietnam
and Cambodia, Lu thinks that
the Filipino laborers will be good
quality as long as there is strict
management. With a population
of nearly 100 million and high
unemployment rates, there will be
no problem finding workers.
For the future development
of Action Wheels, Lu said the
company will continue to devote
themselves to the development of
bicycles, electric toy bicycles, and
e-bikes which are the fields that
they are most familiar with. They
will also continue to develop their
own brands, and take part in global
exhibitions to expand their business
and own brand visibility.