Bicycles

INDUSTRIAL CODES

NAICS: 33-6991 Motorcycles, Bicycles and Parts Manufacturing

SIC: 3751 Motorcycles, Bicycles and Parts

NAICS-Based Product Codes: 33-69911 through 33-69911122

PRODUCT OVERVIEW

A bicycle is a vehicle with two wheels. The bicycle rider provides the energy to propel the bicycle. The use of foot pedals attached directly to one of the wheels, or indirectly through a chain and geared mechanism drives the bicycle forward. All bicycles—also called bikes for short—have handlebars to aid in steering, brakes of some sort, and most provide a seat for the comfort of the rider.

The history of the bicycle begins with Baron Karl Drais von Sauerbronn. The German inventor is credited with a number of inventions, including the meat grinder, the stenotype, and the 25 key typewriter. In 1817 he invented a two-wheeled device known as a Laufmaschine, running machine. The contraption was made of wood, had an upholstered seat, and weighed roughly 50 pounds. It lacked pedals, however; a rider had to push his or her feet along the ground in order to move forward. Drais received a patent for the device a year later.

The Laufmaschine device was only briefly popular, but it inspired inventors across Europe. It became known as a Draisine in Germany and a Draisienne in France. In England the device was known as a hobby horse, after the child's toy, or the dandy horse, after the foppish, affluent men who treasured novelty and were the primary owners. Despite its curiosity this primitive bicycle caused problems. Riders found their boots wore out prematurely from the constant pushing. Streets were in poor condition in the nineteenth century, which made for an unpleasant ride and the seating could not be adjusted and caused a number of accidents between riders and pedestrians. The devices were also hard to steer. By 1819 the device's popularity had faded in London.

Inventors continued to experiment with designs. Scottish blacksmith Kirkpatrick Macmillan is credited with inventing the bike pedal in 1840. Several historians suspect the pedal was attached to three- and four-wheeled vehicles, however; it remains unclear if it was attached to a two-wheeled vehicle. The velocipede (fast feet in French) was introduced at the start of the Victorian Age. Clearly inspired by the carriage, the device typically had two, three, or four wheels and levers to work the wheels and brakes. Its frame was made of iron and its wooden wheels varied in size. These vehicles also gained some popularity. But there were still speed and suspension issues. The two-wheeled version was known as the Boneshaker in England, a nickname that offers some insight into the ride enjoyed by Victorian cyclists.

Pierre Lallemont, who worked as a baby carriage and wheelchair maker in France, is thought to have made designs for a two-wheeled bicycle in 1863 or 1864. He sold the designs to the Olivier Brothers, who in turn engaged Ernest and Pierre Michaux to begin production. The Michauxs, it should be noted, are believed to have played some role in the new design; indeed, a few early sources actually credit them with inventing the modern bicycle. They are believed to have drawn upon their expertise in wagon and carriage building and improved the vehicle's suspension, for example. Lallemont left for the United States, where he was given the first U.S. patent for a bicycle in 1866. Lallemont returned to France two years later to find Europe in the midst of a bike craze.

The Modern Bike

More design innovations followed. Frenchman Eugene Meyer's model, known as the first high wheel bike, was produced in 1869. This was a modification of the Boneshaker design, with a large front wheel (limited only by the length of the rider's leg), a small rear wheel, and a lighter metal frame. Such bikes were known as ordinary or penny farthing bikes in England. The nickname came from coins used at the time. The penny was a large coin and the farthing significantly smaller one; held next to each other, they resembled a side view of Meyer's bike. The bike was first produced in the United States in Boston in 1878. While this new model enjoyed popularity, it also had problems: it was difficult to mount, dismount, and ride, and because of its large front wheel a rider could easily lose his balance and fall.

James Starley was a prominent British bicycle maker. He was in the sewing machine business, but was also an inventor, and is credited with the invention of the tricycle. In 1868 his company Turner and Starley started making penny farthing bikes. Starley's nephew John Kemp Starley went to work for him. In 1885 the younger Starley built his Rover bike. Highly influential, Starley's Rover is seen as the first modern bicycle. It had two 26 inch wheels (still a standard bike wheel size), a diamond shaped tubular frame, tangential spokes, ball bearings in the wheels and cranks, and pneumatic tires. It also held another crucial element: the chain drive. Chain drives consist of a chain moving over a sprocket gear; the device allows for power to be evenly distributed on the wheels of bicycles, motorcycles, and other vehicles. The principle was not new, but Starley was the first to use it on the bicycle.

The bicycle started to be mass produced in the United States about this time. According to government and trade association estimates, bike production jumped from 800,000 in 1895 to two million in 1897; 1.1 million bikes were produced annually from 1899 to 1903. The growth of the bike market sparked more innovations. Dr. John Boyd Dunlop began to explore commercial applications for the pneumatic tire, which had been developed in 1845. The first aluminum bicycle, far lighter than steel framed bikes, was made in France in 1890. William Reiley invented the two-speed mechanism in 1896; his work would be used to create the three-speed, which followed in 1902. New types of pedals and toeclips were patented. Peugeot produced the first recumbent bicycle in 1914. A recumbent bicycle is one that is designed to provide the rider with a more upright position from which to sit and peddle the vehicle.

The bicycle market faced major challenges from the automobile and motorcycle as America's preferred mode of transportation. There were 300 firms involved in bicycle production in the late 1890s; by 1905 there were only 12 manufacturers left. Over the coming decades, children would become the primary users of bikes. During this period bicycles were mass produced and quite similar in design. The Schwinn Bicycle Company set out to make a new kind of bike in the 1930s, emphasizing style and quality. Their new bikes were very popular and helped stimulate the market. The industry would see another surge in interest in the 1960s and 1970s when people became more interested in recreation, fitness, and environmental causes. Bike production climbed from 6.8 million in 1970 to 15.2 million in 1973. The interest in fitness continued into the 1980s. Mountain biking and cycling became popular sports activities; spandex bike apparel even became part of mainstream fashion by the end of the decade. The bike industry became much more specialized in the 1980s. Some bikes were designed for road use, others for racing, and others were meant for rough mountain terrain. Various advances in plastics, composite metals, and materials processing were used to achieve these new lines of bikes. Companies such as Specialized, Cannondale, and Trek all got their start in niche markets during this period.

MARKET

Early Production History

Colonel Albert A. Pope of Boston was a great admirer of the high-wheeled bike when he first saw it in the late 1870s. The businessman and philanthropist worked with Englishman John Harrington to import bikes into the United States. Pope soon became interested in building his own bikes, however. Pierre Lal-lemont of France registered a patent for a two-wheel bicycle in the United States in 1866. He formed a partnership with James Carroll but was unable to make his venture successful. Carroll's patent was sold several times and was eventually split between carriage maker Richardson and McKee and the Montepelier Manufacturing Company. Pope acquired the patent rights from these companies. For the actual production of his bicycle, however, he turned to the Weed Sewing Machine Company of Connecticut. The company and indeed this region of Connecticut had earned a reputation as specialists in metallurgy and the mass production of metal parts.

Pope's company produced 50 bikes in 1878 under the brand name Columbia. The Rover, or safety bicycle, was produced in England in the late 1880s (design improvements made this bicycle safer than its predecessors). The various design improvements to the Rover helped boost the bicycle market in England and France. Pope produced his first safety bike in 1888; his factory was now producing far more bicycles than sewing machines.

The number of bike makers in the United States climbed from 27 in the early 1890s to 300 in 1896; a third of these were located in the Chicago area. Pope had also been an early advocate of better roads so that bicycle riding could be more enjoyable. In the 1890s new bike owners, setting out on the bumpy, unpaved roads for the first time, joined his cause. Women became bike riders, granting them greater freedom from the home. A bike was a significant purchase in the late nineteenth century. Pope's Columbia was priced at $95 in 1888; a racing bike from Schwinn cost $150 in 1902 (the equivalent to more than $27,000 in current dollars). But Adolph Schoeninger of the Chicago Western Wheel Works used sheet metal works and other innovative production methods to produce a bike that would be much more affordable for the average family.

The emergence of the automobile in the 1920s was another challenge for bicycle makers. In fact, many bicycle designers and engineers moved to the automobile industry as it developed. According to government and trade association figures, annual bike production fell from one million units in the 1890s to a low of 250,168 in 1927. In the 1930s Schwinn created a department to focus solely on improving bike and motorcycle design and overall quality. Schwinn is credited with reinvigorating the industry, and would become a market leader.

There were improvements to the bicycle in the 1940s and 1950s. The three speed gearing system, hand brakes, headlamps, kickstands, and reflectors all became more common bike features. Many bikes were produced for children, a growing segment of the population. According to the Census, there were 47.3 million children 0-17 years of age in 1950; the figure climbed steadily to 64.5 million in 1960. With the post World War II move to the suburbs, bicycles got another boost as they offered children greater mobility and were thus quite popular.

During this period, President Eisenhower relaxed tariffs on specific products. Bicycle makers started hearings with the U.S. Tariff Commission in 1954 to ask for higher tariffs and quotas on foreign bikes. Their alarm was understandable. Bicycle imports climbed from 67,789 in 1950 to 1.2 million in 1955, according to government and trade industry sources. Imports represented approximately a third of the market during this period. This figure dropped during the bike boom of the 1960s to just under a quarter of the market. As bike makers began to move their operations outside the United States in the 1990s, the U.S. market has become overwhelmingly composed of imports.

The Bike Boom

Many historians describe the 1960s and 1970s as a bike boom. Sales did indeed increase. There were 3.7 million bikes sold in 1960. In 1973, bike sales climbed to 15.2 million. There are a number of reasons for this boom in sales. There were a growing number of young people in the country. There was also an increased interest in physical fitness. The President's Council on Youth Fitness was formed in 1956. President Kennedy changed the organization's name to the President's Council on Physical Fitness in 1963 to emphasize the need for all Americans, not just children, to be physically fit. Sch-winn released the Sting-Ray brand in 1963 and sold approximately 40,000 in the first year. The 10 speed already existed in Europe but became increasingly popular in the United States. Americans were also becoming more conscious of their environment. In 1970 the first Earth Day was held to call attention to various environmental concerns; bike riding was seen as one way to be environmentally friendly. For some Americans, bike riding became a necessity. The Oil Embargo of 1973 brought on gas shortages and higher prices and forced many Americans to find alternate transportation methods.

Certain sectors of the market received greater attention in the 1980s. Amateur cycling became more popular. In 1984 women's cycling was added to the Olympics for the first time. That same year the first La Grande Boucle Feminine Internationale was held in France; it is sometimes called the Tour de France for Women. The origin of BMX (bicycle motocross) racing actually begins in 1971. In that year the motocross documentary On Any Sunday was released. In its opening scenes boys are shown on their Sting-Ray bicycles emulating the stunts performed by motocross riders. BMX racing is thought to have initially existed in California. The industry appears to have developed quickly; the first professional race was held in 1975. In 1982, the young heroes of ET: The Extra Terrestrial were seen riding BMX bikes and are seen riding in silhouette against the moon in that film's highly iconic shot. This film is given some credit for moving the BMX bike into the mainstream. Mountain biking became popular in the 1980s. Some people had used bikes on mountain trails as early as the 1930s. But Joe Breeze is credited with really moving the mountain bike industry forward in 1977. His Breezer bikes had rugged frames and fat, durable tires that were well suited to difficult terrain. The industry developed into the 1980s and 1990s along with many extreme sports.

The Bike Market in 2006

The U.S. bicycle industry was a $5.8 billion industry in 2006, including the retail value of bicycles, related parts, and accessories through all channels of distribution, according to research funded by the National Sporting Goods Association. Bikes represent $2.6 billion of this total. Sales in the industry have been fairly consistent with previous years. The industry saw estimated sales of $5.3 billion in 2002, $5.4 billion in 2003, $5.8 billion in 2004, and $6.1 billion in 2005 (an all-time high). In 2006, 18.2 million bikes were sold in the United States, a number that has seen little change since 1991.

Approximately 2,000 companies were involved in the manufacturing of bikes and related accessories in 2006. These companies market approximately 200 brands across the industry's specialized sectors. Sources estimate that nearly 99 percent of the U.S. market consists of imports. Of the 18.1 million bikes sold during the year, only 195,000 were made domestically. Approximately 60 percent of these bikes were made in China and 27 percent were manufactured in Taiwan. Some firms do maintain small domestic manufacturing operations. Also, there is a small but growing base for the manufacturing of custom bike frames.

The Gluskin Townley Group and the Cycling Consumer of the New Millennium Report survey the state of the bicycle industry each year. Their reports published in 2006, quoted in Bicycle Retailer and Industry News, note that Trek was the largest producer and importer of bicy-cles in the United States in 2005. It sold 575,165 vehicles and had a 22.5 percent market share. Much of Trek's operations are still in the United States. The country is its major market; the company has less than 4 percent of the global market.

Giant was the next largest company. It sold 255,629 bikes and had a 10 percent market share. Schwinn sold 230,066 bikes, which gave it a 9 percent share. Specialized sold 217,284 bikes and had an 8.5 percent market share. Raleigh rounded out the top four with sales of 191,722 bikes and a 7.5 percent market share.

Bikes in the United States are purchased primarily for recreational purposes; according to trade industry figures, only 5.5 percent of bikes were purchased for uses other than recreation, such as racing and transportation. The categories shown in the table require some explanation. A road bike is a bike intended for use on a paved road. Types of road bikes include racing, utility, and touring. A hybrid bicycle is a cross between a mountain and road bike. A comfort bike is seen as a subset of this category. Both hybrid and comfort bikes might have hub rather than derailleur gears, front suspension forks, and seat post suspension. A hybrid bike typically has larger wheels than a comfort bike. These are relatively new, ill defined categories, and there is overlap between the categories. Mountain bikes are the most popular type of bike in the United States. They have lost some market share. Part of the reason may be the loosely defined categories—some hybrid bikes are also mountain bikes, for example. But foreign competition is a major problem. Mountain bikes from China and Vietnam touched off price wars in some areas.

KEY PRODUCERS/MANUFACTURERS

Pacific Cycle

Chris Hornung founded Pacific Cycle Inc. in 1977. The company began importing bicycles made in China and other Asian countries into the United States. Pacific developed a reputation as a distributor of high quality low-cost bikes. The company broadened its product lines and in the 1990s began distributing its bicycles and related merchandise at Wal-Mart, Target, Toys R Us, and other mass merchandisers. In 2000 the company acquired the Roadmaster and Mongoose brands. Mongoose was a popular brand with young BMX bike riders, and Pacific's distribution relationships moved this brand into the mass market category.

In 2001 Pacific acquired the Schwinn and GT brands. Schwinn is perhaps the most recognizable bike brand on the market. The brand had been a market leader for some time, but had failed to capitalize on the BMX bike movement. As well, the brand had suffered by being available only at independent bike dealers. Pacific introduced Sch-winn to the mass market and GT to the sporting goods channels for the first time in 2002. In 2004 Pacific was acquired by Dorel Industries Inc., a global supplier of juvenile and home furnishings. Brands owned by Pacific include Schwinn, Mongoose, GT, Schwinn Motor Scooters, Kustom Kruiser, Roadmaster, Pacific, Dyno, Powerlite, InSTEP, and Pacific Outdoors. Pacific Cycle is located in Madison, Wisconsin. Dorel is headquartered in Montreal and employs approximately 4,700 people in 15 countries. The company reports annual sales of $1.8 billion.

Trek Bicycle Corporation

Richard Burke and Bevel Hogg established the Trek Bicycle Corporation in 1976. The company began producing stylish framesets that incorporated European and American production methods. Their first framesets sold for $275 and were only available in independent bike stores. This helped the Trek name develop a sense of exclusivity, and the company received good word of mouth among customers. Trek's focus had been on the road bike market. In 1983 the company took some preliminary steps into producing mountain bikes. It developed an aluminum bonded bike that was very popular in the 1980s. At the same company leaders put a greater emphasis on the company vision and added dealers and strengthened their customer service policies. By 1996 the company was the leading bike maker in the specialty channel. Mountain bikes represented 80 percent of its product line. It was servicing 1,500 dealers. Trek became a sponsor for bike racing and in 1997 it signed Lance Armstrong. Armstrong became the first American to win the Tour de France in 1999. The model he was riding, the Trek's OCLV Carbon 5200, saw a jump in sales after Armstrong's win. The company is based in Waterloo, Wisconsin.

Giant Manufacturing Company Ltd.

Giant Manufacturing was established in Taiwan in 1972. The company began manufacturing bikes to be sold under other company brand names. It became the leading bike maker in Taiwan in 1980. In 1986 it began making bikes under its own brand name. It manufactures bikes for competition, exercise, recreation, and transportation. It also makes biking apparel and accessories. The company's products are sold in bike shops in more than 60 countries and it operates 20 of its own stores. Giant Manufacturing also makes bikes for other popular brands through its four manufacturing facilities in Taiwan, China, and Europe.

Schwinn

Ignaz Schwinn started the Arnold, Schwinn Bicycle Company in 1895. After the end of the bike boom at the turn of the century, Schwinn bought up the operations of some failed bike makers. The company initially made some motorcycles. But Frank W. Schwinn, Ignaz's son, decided to start making bikes that distinguished themselves from the competition. Schwinn became an industry leader through its innovative designs. Schwinn introduced the bike balloon tire in 1933, which quickly became the industry standard. In 1946 it introduced built in kickstands. In 1963 the company introduced its popular Sting-Ray. Roughly 40,000 Sting-Rays were sold in the first year and by 1968 and other bike makers copied the bike's high rise handlebars, banana seat, and stickshift. Schwinn ventured into other recreational equipment markets; in 1965 it introduced the first in-home workout machines.

Schwinn continued to make heavy steel bikes; the growing market, however, was in the lightweight Asian bikes being imported into the country. The company lost market share. In 1951 Schwinn had a 22.5 percent share based on dollar sales. By 1961 its share had dropped to 12.8 percent. Then, in the 1960s Schwinn made some controversial management decisions. In 1967 the U.S. Supreme Court ruled that Schwinn had engaged in price fixing and other illegal dealings. Schwinn set up its own warehouses and distribution process after the ruling in the hopes of better controlling the way its products were sold and marketed. Many analysts feel this move alienated them from market trends. The company failed to embrace the mountain and BMX market of the 1980s, for example. Schwinn filed for bankruptcy in 1993. In the mind of a young bike shopper a Schwinn bike is libel to be considered the bike his or her parents rode, and the company is working to come up with more engaging designs to attract the attention of this important customer—a young biker.

MATERIALS & SUPPLY CHAIN LOGISTICS

The standard bicycle frame, often referred to as a diamond shaped frame, can be broken into two major sections. The front of the frame holds the top, seat, down, and heat tubes. The rear holds the chainstays, seatstays, and rear wheel dropouts. The first bike frames were made from wood. Manufacturers later made the frame from steel. This increased the bike's durability, but the heaviness of this metal added considerably to the bike's weight. It was not until the 1970s that manufacturers were able to produce steel alloys that were both light and durable. The brakes, chains, and wheels are generally made from stainless steel. They are purchased separately by the bike maker and then attached to the frame.

How a Bike is Made

The production of a bike begins with the manufacturing of flat steel. The flat steel is then shaped around a tube and welded together. The thickness of the tube typically varies in places. It is thicker at joints and stress points to provide greater durability. The thickness may be reduced in places; this reduction helps reduce the bike's weight. The tubes then go through a number of processes to make sure the tubes are of the appropriate strength and weight. Joints are then sealed, and the frame goes through a process of alignment before being painted. The various components such as the seat, handlebars, stems, brakes, and headsets are attached to the frame. Their placement varies depending on the type of bike. The gear shift, for example, may be attached to the down tube, the handlebars, or the stem. These parts are typically made of an aluminum or steel alloy. The wheels are attached last.

DISTRIBUTION CHANNEL

Bicycles are sold primarily through three main distribution outlets: mass merchandisers, specialty bike chains, and chain sporting goods stores. Companies market specific brands to each of these channels and there is very little crossover between them; certain specialty bikes, for example, are unlikely to be found at a mass merchandiser. Trek's bikes are found only in specialty stores and are not available for sale online.

Mass Merchandisers

Large, mass merchandisers such as Kmart, Target, Toys-R-Us, and Wal-Mart sold 13.9 million bikes, or three quarters of all bicycles sold in the United States in 2006. These retailers controlled such a large market share in part because their bikes were inexpensive. The average price of a bicycle at a mass merchandiser was $72 in 2006, far below the average $450 price at a specialty bike retailer or the $225 price at a sporting goods store. Approximately 80 percent of children's bikes are sold through the mass merchandising channel.

Specialty Bicycle Stores

There were 4,500 independent bike dealers (the local bike shop) in 2006. This figure includes performance retail stores. These stores sold 2.5 million bikes in 2006, representing 14 percent of industry unit sales. The National Bike Dealers Association (NBDA) estimated there were approximately 8,000 independent bike dealers in the early 1980s. The bicycle retail industry loses as many as 1,000 retail shops each year, but the loss is tempered by a significant number of start-up operations that enter the industry annually. The NBDA estimates that the average bike dealer needs a 36 percent profit margin to cover his or her costs and break even. The average profit margin falls far below 36 percent, standing at something just shy of 5 percent in the middle of the first decade of the 2000s according to the NBDA.

According to an NBDA report titled 2004 Cost of Doing Business, the average specialty bicycle retailer had gross sales of $550,000 per year. Roughly 91 percent of them had one location. The average store size was 4,822 square feet. Revenues for most bicycle dealers were generated on the sale of bicycles (47%) although bike parts and accessories represented 35 percent of their revenues. The remaining 18 percent of revenues were generated by bicycle repair services (11%), bicycle rentals (2%), and by the sale of other product holdings such as fitness equipment (5%). The average store sells approximately 650 bicycles per year, carries five bicycle brands, and numerous accessories. Approximately 80 percent of adult bikes are sold through this channel.

Sporting Goods Chain Stores

The large sporting goods chains such as Dick's Sporting Goods and the Sports Authority sold 1.1 million bikes in 2006. Their bike sales were worth $246 million. While these figures are substantial, sporting goods chains represented the smallest portion of the overall bicycle sales in the United States, just 6 percent of unit sales and 9.3 percent of dollar sales. Sporting goods chains typically stock a wide range of bikes and related equipment; their selection is generally smaller, however, than the specialty retailer.

Approximately 550,000 bikes were sold through all other channels in 2006, including the Internet, mail order, hardware stores, and local/regional retailers. These locations represented just 3 percent of unit sales. Bike sales in these outlets totaled $178 million, or 6.7 percent of retail sales.

KEY USERS

According to the National Sporting Goods Association (NSGA), bike riding was the eighth most popular sports activity in 2006. A total of 35.6 million Americans age 7 or older reported riding a bike at least once during the year (walking and swimming were the most popular sports). Women represented 45 percent of this total. More people reportedly rode a bike than played basketball (26.7 million), played golf (24.4 million), or went jogging (28.8 million). When broken down by age one sees that 16 million cyclists were younger than 18 in 2004. Approximately 18 million were 18 to 34 years of age, 6 million were 35 to 44 years of age and 7.8 million over 45 years old. Figure 24 presents bicycle ridership figures in the United States by age group.

Lance Armstrong brought visibility to the sport in much the same way as Tiger Woods did for golf and Michael Jordan did for basketball. After Armstrong's Tour de France win in 1999 more people briefly took up the sport. However, bike riding is on the decline. According to NSGA figures, the number of people bike riding has fallen from 53.3 million in 1996, despite the fact that a good number of Americans developed a real love of the activity. The number of licensed racers reportedly doubled to 5,400 between 2002 and 2006. As of early 2007 there were 1,112 cycling clubs in the United States. Bike tours were a popular part of many vacationers' travel plans.

Interest in cycling grew in specialized categories such as mountain biking or BMX riding. According to the NSGA, 7.3 million Americans reported participating in mountain biking at least once in 1996; that figure climbed to 8.5 million in 2006. Such extreme sports are often seen as the domain of children or teenagers. This is not so. The average age of a frequent mountain biker (25 or more outings per year) is 30 years. Nearly 40 percent of regular mountain bikers reported having graduated from college. The average BMX cyclist was 24.7 years of age.

ADJACENT MARKETS

The bike industry is closely aligned with several other industries. Nearly half of the overall bike market is related to sales of bike accessories such as tires, helmets, apparel, pedals, and footwear. The National Sporting Goods Association considers bicycles a subset of the recreational transport industry, which had an estimated $36.7 billion in sales in 2005. This industry includes pleasure boats, snowmobiles, and recreational vehicles. It has more than doubled since 1990, when it registered sales of $14.5 billion. The recreational transport sector, in turn, is part of the sporting goods market, which includes gear and footwear, and had estimated sales of $86.7 billion in 2005.

Bicycles offer wide opportunities for large urban areas. Many cities, for example, are sending police officers on bike patrol. Having law enforcement officers on bicycles is a way to increase their visibility and help them to access pedestrian areas more easily while encouraging a gentler, kinder image of the police in general.

Bicycle delivery services are another business that builds on bicycles by using them to maneuver the busy roads of a populous urban center. There were roughly 300 bicycle delivery firms working in New York City in the early 2000s. At the industry's height in the 1980s there were believed to be as many as 4,000 commercial cyclists in the city. The fax machine, email, and firms like Federal Express have replaced much (but clearly not all) of the business; the threat of bike accidents with pedestrians or vehicles also helped chip away at the business. According to Chicago's Bike 2015 Plan, that city's bicycle messenger companies employed more than 300 bicyclists who made an estimated 1.1 million deliveries annually. City officials planned to boost the use of bike messengers by 25 percent by 2015.

RESEARCH & DEVELOPMENT

Manufacturers have been adding more rider friendly features to bikes in the hope of attracting new riders. Automatic shifting has been around since the early 1990s. The technology had become more sophisticated in 2006 and 2007. In automatic shifting, a computer chip is built into the bike near the pedal. The chip measures wheel speed and the pedaling of the rider; it then automatically shifts into a higher or lower gear. Some have the ability to adapt to the rider's skills and shift gears during difficult turns.

In early 2007 bike makers released models offering clever storage features, improved brakes, coatings that can be peeled off to change the color of the bike, and provocative styling. Beginning in the 1990s businesses became more conscious of the need to offer products that were more comfortable for human use—a design concept known as ergonomics—and bike makers have adopted this design principle as well. In 2006 and 2007 bike makers released models with wider, more comfortable seats and adjustable handlebars with better designed grips. Companies returned to some of their old styles in the hopes of persuading Baby Boomers to return to the bikes of their youth.

CURRENT TRENDS

Global Trends

World bicycle production increased by nearly 9 percent to some 101 million units in 2003. China is a major market for bikes and indeed is a world producer, making 58 percent of all bikes sold worldwide. However, the country has begun to ban the bikes from their roads. With the country's booming economy, many Chinese purchased their first car in the early 2000s. Bike lanes were being cleared to make way for these and other vehicles. Shanghai, China, for example, had an urban population of 20 million in 2003; there were thought to be 9 million bikes in the city. The number of private vehicles in Shanghai nearly doubled to 142,801 by the end of 2003, according to China's National Bureau of Statistics. Bike usage dropped from 33 percent of trips in 1995 to 27 percent in 2000. According to the Cycling Association of China, each household owned, on average 1.43 bicycles in 2002, compared with 1.82 in 1998.

Certain populations have embraced bicycle riding wholeheartedly. The Germans owned 66 million of the 150 million bikes estimated to exist in Western Europe in 2006. Riders used the bikes for recreation as well as transportation. Many cities in Western Europe struggle to relieve traffic congestion and some governments have pushed cycling as one possible remedy. The Dutch, for example, were some of the most active cyclists in the region. The average citizen there traveled 2.4 miles a day on his or her way to and from work. In a working population of 6 million, 1.2 million people commuted to work by bicycle in 2003. Interestingly, a bike from Dahon, a U.S. company, was named Dutch bike of the year in 2006.

U.S. Trends

The bicycle is used primarily for recreation rather than transportation in the United States. According to the Census, 0.4 percent of workers used a bicycle to commute to work in 1990, 86.5 percent of workers took a car or carpooled, while the rest walked or took public transportation. In 2004 87.8 percent of workers commuted by car or carpooled. Only 1.4 percent reported using "some other means" to get to work other than public transportation. Few Americans have incorporated biking into their daily commute. This is largely due to the fact that the average U.S. worker lives far from his or her place of work. According to the Census Bureau the average U.S. commute lasted 25 minutes in 2004, suggesting a distance long enough to make commuting by bicycle an unrealistic goal for most people.

With the rise of gas prices that began in the early 2000s, and increased attention brought to environmental issues, bike use may increase. Organizations such as the League of American Bicyclists have lobbied state, local, and federal governments to enact policies that are more bike friendly. Their efforts appear to be succeeding. On August 10, 2005 President George W. Bush signed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). It authorizes as much as $4 billion in new federal spending on bike paths, trails, and related programs through September 2009.

TARGET MARKETS & SEGMENTATION

In the last century the bike market experienced several periods of strong interest: immediately before the turn of the century and in the 1960s and 1970s. The industry saw a smaller boom in sales in the 1980s when the market became more highly specialized, leading to the development of the BMX, racing, and mountain biking sectors. During its history manufacturers have made the bike lighter, more durable, and more attractive. There is little bike production in the United States. In 2006 nearly all bikes were imported. The decline in the market also seems to be reflected in bike riding in the United States, which has declined almost steadily from 1996 to 2006. However, there is some hope on the horizon for the bike. The aging population appears to see bike riding as a good source of exercise. The bike may also be further incorporated into plans to curb traffic problems and promote sound environmental policies.

RELATED ASSOCIATIONS & ORGANIZATIONS

Bicycle Product Suppliers Association, http: //www.bpsa.org

National Bicycle Dealers Association, http://www.ndba.com

National Sporting Goods Association, http://www.nsga.org

BIBLIOGRAPHY

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"Industry Overview 2006." National Bicycle Dealers Association. Available from 〈http://nbda.com/page.cfm?PageID=34〉.

Maus, Jonathan. "Portland Bicycle Industry Worth $63 Million." Bike Portland Organization. Available from 〈http://www.bikeportland.org〉.

Norman, Jason. "End of Road Surge Contributes to Specialty Retail Sales Decline." Bicycle Retailer and Industry News. 1 April 2007.

Ritfeld, Jennifer. "The Netherlands: Bicycle Industry." U.S. Department of Commerce, International Trade Administration. February 2007. Available from 〈http://www.export.gov〉.

"Table 1079: Commuting to Work by State: 2004." Statistical Abstract of the United States: 2007, 126th ed. U.S. Department of Commerce, Bureau of the Census. December 2006, 689.

"Table 1233: Participation in Selected Sports Activities: 2004." Statistical Abstract of the United States: 2007, 126th ed. U.S. Department of Commerce, Economics and Statistics Administration, Bureau of the Census. December 2006.

"Table 1235: Sporting Good Sales by Product Category: 1990 and 2005." Statistical Abstract of the United States: 2007, 126th ed. U.S. Department of Commerce, Economics and Statistics Administration, Bureau of the Census. December 2006.

"Ten Year History of Selected Sports Participation." National Sporting Goods Association. Available from 〈http://www.nsga.org〉.

Van Der Meer, Ben. "Bicycle Retailers Adapt to Meet Needs of Aging Boomers." Reading Eagle. 30 June 2007.

Wiebe, Matt. "Specialty Bike, Sports Chains Deliver Dollars." Bicycle Retailer and Industry News. 1 April 2007.

see also Fitness Equipment, Motorcycles