Deja vu rides a 10-speed

0 Comments | Insight on the News, March 25, 1996 | by David Sands, | Bill Gertz

Huffy, Murray and Roadmaster sell almost exclusively to so-called mass merchandisers -- chains such as Toys R Us, Wal-Mart and Sears, with children's and adult's bikes typically priced at $100 or under. And it's here that the competition from companies such as the China Bicycle Co., which in 1993 opened the world's largest bicycle factory, is particularly ferocious. Chinese exports to the United States have climbed steadily in recent years, from 2.2 million bikes in 1992 (14.6 percent of the market) to 4 million in 1994 (23.7 percent).

While Wal-Mart and some other big retailers have "Buy American" policies, Toys R Us tries to balance its domestic and imported supply lines. The New Jersey retailing giant offers as many as 120 models -- far more than its rivals -- and claims that Huffy, Roadmaster and Murray can't match the reliability of Chinese models.

"We think competition among suppliers is healthy," says Warren Murayama, a trade lawyer representing Toys R Us in the dispute. "If you put prohibitive duties on half of our supply channel, our fear is that selection will fall and prices will skyrocket."

Small bike-shop owners have a different beef. They say that the $99 models produced by the Big Three are a world away from the $350-and-up bikes they sell -- nearly 90 percent of them imported. If the big American manufacturers want trade relief, it should be limited to bikes retailing for $200 and under.

"There's very little overlap between the two sectors," says Landry. "That's why the small shops are so upset. They don't want any part of this."

"The domestic market is flat right now, so that's making it harder for everybody," says Walt Jarvis, editor of Bicycle Dealer Showcase News, an Oregon-based trade publication. "Some very big orders can turn on a price differential of 50 cents or a dollar."