Bicycles for the world from Taiwan

Taiwan is not only a leader in semiconductors. The Taiwanese bicycle manufacturer Giant alone produces more than the entire German bicycle industry. Kathrin Erdmann met company boss Bonnie Tu.

The panels on the outer wall are made of aluminum like bicycle frames, and a kind of race track leads to the parking lot on the third floor. The headquarters of the Taiwanese bicycle manufacturer Giant stands out in Taichung Science Park. The light-flooded building was built by star architect Ji Pan.

Bonnie Tu's office is at the top. The 74-year-old boss comes to the interview in a purple cycling outfit. She had been to a funeral that morning and it was so hot that she wanted to wear something comfortable and airy, she says, laughing.

A Taiwanese Success story

Giant started out as a contract manufacturer in the 1970s, the brand has existed since 1981 and is a Taiwanese success story. “Quality has always been the most important thing for us and we have invested a lot of money in research and development,” says the company boss.

Cycling should be fun – this is the promise that Giant has made, says Tu. She is the niece of company founder King Liu, was CFO for a long time and has been at the helm since 2016.

Giant is one of the world's largest bicycle manufacturers. The company alone produces more bicycles than the entire German industry, reports Germany Trade & Invest (GTAI), the foreign trade agency for Germany, in an analysis from this year.

The company designs its bikes – but only the frame construction and final assembly takes place in-house. The components mainly come from suppliers in Taiwan, China, Japan and Europe. “A Giant bike consists of 1,000 individual parts,” explains Tu.

Dense network of local suppliers

Having suppliers in the immediate vicinity is part of the success, says the Giant boss. Jürgen Maurer, who looks after German foreign trade in Taipei, agrees. The “cluster policy” has been in place since the 1970s, and in his view, it also brings with it a high level of flexibility and creativity as well as strong political and economic pressure.

Around the central Taiwanese city of Taichung, around 900 bicycle component manufacturers have settled, working with Giant and the other major brand, Merida. In total, the industry employs around 32,000 people.

Taiwan, with its 23 million inhabitants, is a world leader in the bicycle industry, including handlebars, pedals, bottom brackets and rims.

Slow decoupling from China

Giant used to produce mainly in China, but today there are also factories in the Netherlands, Hungary and Vietnam. “In 2017, we realized that we shouldn't put all our eggs in one basket and we scaled back our involvement in China,” says boss Bonnie Tu.

This decoupling from the large neighbour coincided with the election victory of the Democratic Progressive Party. Since it came to power, relations with the People's Republic have noticeably deteriorated.

More e-bikes, more customers

The 74-year-old believes that the future of the bicycle market will go in several directions. Firstly, demand for e-bikes will increase. The company estimates that in the next five years, the share of electric bikes in sales will reach 40 to 50 percent. In this business, the Netherlands was the largest buyer of bikes from Taiwan last year, followed by Germany.

When she took over at Giant, Bonnie Tu also set her sights on a new market and built the Liv brand for women. This required a lot of patience. “It took me almost three years to convince the manufacturers that gear shifts and brake levers had to be designed differently for women because they generally have smaller hands.”

Bonnie Tu is not particularly happy with her government's bicycle policy. The Giant boss would like to see leasing offers like in Germany so that more people can switch to cycling. At least the company has already achieved one thing in Taiwan: setting up a bicycle rental system.