There are several things going on relative to this headline, including the fact that COVID-19 and its variants are still with us after almost three years. For the American bicycle business, COVID-19 has been turned loose in epidemic proportions on our largest supply source of bicycles and e-bikes.
A December 28, 2022 article in the Economist Weekly edition states, “After nearly three years of self-imposed isolation, China is opening up again. The domestic travel restrictions, mass-testing requirements and draconian lockdowns of the ‘zero-COVID’ policy were scrapped in early December. On January 8 China will reopen its borders too. People arriving from abroad will no longer have to quarantine. More flights into China will be allowed. Visas will be granted to business travelers and students (though not yet to tourists). And Chinese nationals will be allowed to travel abroad without needing to provide the authorities with a reason.”
There are no accurate figures on how many Chinese people have been and will be infected, but it is clear the government will not report the real numbers. It is now estimated by sources outside of China that as many as 250 million Chinese have come down with COVID-19, and that 1.5 million will die as the urban wave peaks in January, just as the Lunar New Year begins.
On January 20 factories shut down and workers in the urban areas of China leave for their home villages in the rural provinces, some taking COVID-19 with them.
The human suffering and loss of life is tragic. It also means the disruptions to bicycle and e-bike manufacturing will continue after the Lunar New Year into February and March as COVID-19 closes manufacturing facilities and workers become ill and are delayed returning to work.
We have not seen the final import data for 2022 yet, but based on 2021 import data China was the source country for 86.8 percent of all the bicycles and e-bikes imported into the U.S. (See the NBDA U.S. Bicycle Market Overview 2021 Report, Table 22, page 45: www.nbda.com)
This also means the brands will have difficulty balancing their inventory of finished goods because of the Q-1 2023 disruptions to their Chinese-based supply chains.
The only good news is the disruptions to the Chinese supply chain will mean a Q-1 slowing of imports of low-cost e-bikes under the de minimis rule.
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