Showcases the Best of the Czech Market

2 009 Bike Brno Showcases the Best of the Czech Market Text & Photos: Editorial Dept. Pells won the whole bicycle Award of Excellence again in 2009. Here Pells General Manager Libor Petrvalsky (right) goes to accept the award. Left: A famous Czech TV host, who officiated at the Bike Brno show. Group photo of distinguished guests, organizers, and prize winners. 2009 Bike Brno International Bicycle Trade Show was held Nov. 5-8. Because it snowed on the first day, and also because admission to the show was restricted (trade only), the crowds were noticeably thinner than last year. And because most people in the Czech Republic like to stay home and rest on Sunday, visitors were particularly few on the last day( - a Sunday). According to the organizers, this year s show fea- 96 BMU 2010 Spring www.biketaiwan.com

Representatives of the Economic Division of the Taipei Economic and Cultural Office in the Czech Republic visited to show their support for Taiwanese exhibitors.l-r- TECO Secretary Chen Da-Ming, TBEA General Secretary James Liu, Brno Show CEO Consultant Jiri Kulis, TECO Director Ho Yuan Guei, Nobert M. Schmidt, and Kaigo President Gerd Keim. The Taiwan pavilion contained nine companies organized by TBEA. Paul Lange CEO Bernhard Lange has had a long and close relationship with Shimano. Paul Lange has more than 60 years of history. S-Sun President Suh Jang Liaw said it was their first time exhibiting at Bike Brno, so it was difficult to judge quickly if the show was effective for them. Bike Brno presents a donation of 3,000 to Annick Roetynck (center), secretary general of the European Twowheel Retailers' Association. Also shown are Bike Brno manager Jan Kubena (right) and Kastal president Karel Starek (left). The Czech firm Tufo specializes in road tires. Superior's booth was decorated with posters. tured 200 vendors, which was an increase of 18% compared with the 170 vendors last year. The total number of booths at the show was roughly the same as last year. It is apparent that many vendors are still attracted by the promise of the Czech market. On the other hand, both sales and profits have been eroded by the recession, which caused many vendors to cut back the size of their booths. Taiwan was represented by a group organized by TBEA and consisting of nine Taiwanese vendors. The Taiwan group had a total booth area of 145.5 square meters, and the participating vendors said that the show was quite productive. Roughly 400,000 bicycles www.biketaiwan.com 2010 Spring BMU 97

KCK's 2009 booth was three times bigger than its 2008 booth. Both President Dalibor Kmenta (rear) and Import Manager Ing. Lenka Zavodska felt satisfied with the results of the 2009 show. General Manager Jakub Ditrich of the Czech importer Ekolo CZ imports e-bikes exclusively from China and Taiwan; Ditrich held an e-bike seminar at the show. Apache is BP Lumen's brand; President Pavel Barta is an avid cyclist. Kaluzik Zdenek, president of Czech bike manufacturer Sundance, and wife. According to Chuck Kuo, general manager of DHS Romania, DHS produced roughly 370,000 bikes in 2009. People from different companies can still be friends. Master did not participate in the show, but Master Purchasing Manager Sarka Vorlickova (left) chatted with BPS General Manager Pavel Veselovsky at the KTM booth. Sapim product manager Henk Van Empel (left) adamantly expressed that the absence of some benchmark customers had a negative impact on the value of the show as a whole. Lai Tsan-kun, general manager of Sapim's Taiwan agent Salloy, is on the right. Aspire product manager Oskar Jancik. are usually sold annually in the Czech Republic, but the financial crisis has put a damper on sales this year. The recession has had a big psychological effect, and the public and dealers have become more conservative. Another factor reducing bicycle sales was the poor weather during the first quarter of the year, which included flooding bad enough to cause fatalities. It is therefore generally expected that inventory will be as high as 40% this year. It should be noted that e-bikes are selling briskly in the Czech Republic, and more and more brands are crowding into this market. Although numerous manufacturers expressed that this was the best year for bicycle 98 BMU 2010 Spring www.biketaiwan.com

Slovakia's Kenzel is geared toward exports. Sales manager Zoltan Bujna (right) stated that the company has begun producing e-bikes. Also shown is customer Tona Istvan (left). JMC is Felt's Czech agent, and has an annual output of roughly 6,000 bikes. BBB is JMC's parts and accessories brand, and accounts for 75% of the company's sales. Pavel Mzyk is Marwi's sales manager for Eastern Europe. According to Tomas Krc, KTM's Czech sales rep, KTM's products sell for an average price of around 500-600 in the Czech Republic. Czech rim manufacturer Remerx produces roughly 2 million alloy rims annually, and plans to introduce carbon fiber rims for the first time in 2010. BP Lumen is upbeat about e-bikes' future prospects. Although Kellys did not take part in the show, Marketing Manager Tibor Vetrik and company Amulet focuses on the high-end market, and its bikes personnel visited the show to find out what was Poland's Kross bicycles currently has around 15 fetch an average of 450-500. The company's annual going on. distributors in the Czech Republic. output is around 6,000 bikes, and it has 60 dealers. sales, few are optimistic about sales next year. Because of the large inventories, it is generally felt that sales will fall by 20-30% in 2010. The vendors participating at this year s show noted that the main deficiency was the absence of such large firms as GT, Trek, Merida, and Kelly s, and also complained that the small number of visitors made the show less effective than it should have been. On the other hand, a few vendors felt that there had been quite a few visitors, and such companies as KCK, Kaster, and Hi-Bike even felt confident enough to expand their booths significantly. Next year s show will be held Oct. 7-10. www.biketaiwan.com 2010 Spring BMU 99

Author (Universe Agency) Author President Martin J. Havlena has been in the bicycle industry for 22 years. Agang is Author's newly-introduced brand. Author is the Czech Republic s leading brand. Company President Martin J. Havlena has 22 years of experience in the bicycle industry, and is keenly aware how the industry works. He is not satisfied with being the number-one brand in the Czech Republic, but has big ambitions to expand throughout Europe and overseas. Author entered the Taiwan market in 2009, and its Asian operations are handled by Author Taiwan and its Chinese agent Asiana. Now that the Author brand has become the favorite brand of Czech consumers, the company recently established a second brand Agang which was unveiled at the Bike Brno show and will be introduced this year. President Havlena stated that Author sold approximately 120,000 bikes in 2009, of which 45% were sold in the Czech Republic, and 55% were exported to Poland, Russia, the Ukraine, Slovakia, and other European countries. Author sponsors two teams, one of which is the Author team, and the other is the Agang team. As for the company s goals in 2010, Havlena expressed that just maintaining the 120,000 level of 2009 would be quite satisfactory. Because Author imports its bikes from Taiwan and Taiwanese firms in China, retail prices average NT$25,000-NT$35,000 (US$780- $1,100). Author hopes to sell 10,000-12,000 Agang brand bikes in 2010. 4 Ever 4 Ever General Manager Radim Broz places a high premium on the company's OEM production quality and relationships. Two brothers are in charge of 4 Ever Radim Broz (left) and Peter Broz (right). 4 Ever General Manager Radim Broz is a perfectionist when it comes to brand, image, and quality, as expressed by the blue background decorations at the 4 Ever booth. According to Broz, because corporate exposure is extremely important, he also participated in the Eurobike show as well as Bike Brno. He further stated that 4 Ever produced 60,000 bikes in 2009, of which 90% were OEM and 10% were sold in the Czech market under the 4 Ever brand. This company currently has 100 distributors and two 4 Ever factory stores. Broz suggested that some other color is due to replace the white popular since 2008. As for the thinking that the weather will affect sales, Broz feels that it is unfair to blame bad weather when sales are poor. As for 2010, Broz admitted that 4 Ever s sales targets have been reduced by 20-30% in light of market inventory of as high as 40%. In addition, the recession has forced 4 Ever to put its new plant construction plans on hold. Broz participated in the Taichung Ride On product announcement conference in 2009. 100 BMU 2010 Spring www.biketaiwan.com

Pells Libor Petrvalsky, the founder of the Czech Republic s Pells brand, enjoys sports, was formerly a competitive cyclist, and has very strong ideas about product design. Pells introduces at least 100 new products every year, 100% of which are sold through the IBD channel. Pells has around 90 distributors, and produces roughly 9,000 mountain bikes, cross bikes, and road bikes in the Czech Republic annually. It also makes high-end hand-crafted aluminum and carbon fiber frames at its Brno plant. Petrvalsky is very interested in international cooperation, and thinks highly of the successful collaboration between Kellys and Uni Victor. Petrvalsky consequently doesn t rule out cooperation with a suitable partner. Shown here are Pells General Manager Libor Petrvalsky (left) and technology manager Zdenek Vahala (right). Aspire Aspire General Manager Igor Dolezal. Aspire is an agent for 13 brands, including GT, Schwinn, Mongoose, and Cannondale. It has two departments. Aspire did not have a booth of its own in 2009, but rather jointly exhibited Cannondale bikes with its distributors. As a result, people noted that GT was not represented at the 2009 show. According to Aspire General Manager Dolezal, the high booth fees deterred the company from exhibiting, but it will ultimately return the money saved to consumers. Aspire sold around 50,000 bikes in 2008, said GM Dolezal, and has 40 employees. It sells its bikes at 500 bike shops in the Czech Republic, and 150 of these are considered VIP customers. Aspire had its best year ever in 2009, but Dolezal said that sales targets will be adjusted downward by 10% in 2010. CTM Although CTM had an outstanding year in 2008, and sold 20,000 bikes, the financial crisis of 2009 left it saddled with inventory of nearly 4,000 bikes, which put a heavy strain on the company s operations. CTM currently has 220 distributors, including 100 in the Czech Republic and 120 in Slovakia. Retail prices are mostly in the range of 150-400. Company sales consists of 55% mountain bikes and 45% cross bikes and trekking bikes in Slovakia, but 70% cross bikes and 30% mountain bikes in the Czech Republic. CTM moved into a new plant in January 2008. The company s two owners Miroslav Lukac and Kamil Vrabel were high school classmates, and spent time operating bike shops. Both partners like cycling, and are fiercely dedicated to bicycles and the bicycle industry. Amethy is CTM s agent in Taiwan and China, and CTM is glad to have found such an outstanding agent. CTM's two partners Kamil Vrabel (left) and Miroslav Lukac (right) were high school classmates, and are very good friends. Marketing manager Jan Lukac is on the right. www.biketaiwan.com 2010 Spring BMU 101

Superior (Bike Fun International FBI) Superior President Hein Hulzebos. FBI purchased the Rocky Machine brand in August 2009. Rocky Machine had performed contract manufacturing for FBI since 2004, and Superior hopes that Rocky Machine s brand recognition and channels in Europe will expand FBI s EU market. FBI currently has three brands: Superior, STR (low price), and the newly-acquired Rocky Machine. FBI also performs OEM production for around ten other European brands, such as Gazelle children s bikes and Cortina. Rocky Machine bikes were notably absent from the Bike Brno show, however. According to Sales Manager Martin Guras, FBI s production fell from 105,000 bikes in 2008 to 90,000-95,000 bikes in 2009 due to the effects of the recession, but prices were up by 5% compared with 2008. FBI has 150-160 employees. Apart from OEM production for ten other brands, FBI also makes and sells Superior, STR, and Rocky Machine bikes, and each of these brands has a different positioning. Rocky Machine is positioned as an international brand, Superior is used for mid-level bikes sold in the Czech Republic and Slovakia, and STR consists of low-price domestic bikes. Cyklo Zinty Cyklo Zitny is an agent for many well-known brands, including Michelin, SRAM, and Progress. Shown here are President Jaroslav Zitny (left) and Marketing Manager Jan Matetv (right). FBI (Superior) Sales Manager Martin Guras. KCK KCK President Dalibor Kmenta took a contrarian approach to the economic slump, and rented a booth nearly three times bigger than in the past at the 2009 show in the hope that this would increase customers confidence. KCK was established in 1992, and only engaged in wholesale business in Slovakia in the early days. After enjoying steady growth, the company made the natural step to importing. It currently has 450 distributors, and is an agent for more than ten brands, including SKS and ITM. It is one of Shimano s Czech distributors. KCK has maintained an amazing speed rate of at least 15% annually, and its sales practically doubled between 2006 and 2009. It mostly imports parts and components (90%), and only 10% of its business consists of the import of whole bicycles. Most of KCK s imports are from Germany, Taiwan, and China. But although KCK has 16 vendors in Taiwan and 6-8 vendors in China, Kmenta has never been to Taiwan or China. Many Czech aftermarket firms have not grown much, But KCK has somehow managed to achieve obvious growth. As a consequence, both President Kmenta (rear) and Import Manager Lenka Zavodska anticipate 50% growth in 2010. KCK President Dalibor Kmenta (left) with his wife and daughter. Cyklo Zinty is an agent for SRAM, Prologo, and Michelin, and has 600 customers in the Czech Republic, including 150 VIP customers. Cyklo Zinty focuses mainly on high-end dealers, and does little OEM business. President Jaroslav Zinty has a knack for the aftermarket, and is optimistic that his company can grow by 10% in 2010. 102 BMU 2010 Spring www.biketaiwan.com

Progress Progress is an agent for many brands (Hutchinson tires, Giant, etc.), and always had a large booth at Bike Brno. In 2009, however, Progress booth suddenly got a lot smaller. According to our understanding, this was because the request from the 28 members of the Czech Bicycle Association that the organizers reduce their fees was refused, which prompted Progress to reduce its booth size. According to President Josef Prib, Progress saved several tens of thousands of US dollars at the Brno show alone, and he added that the Czech Republic has a 8.4% unemployment rate. Progress has around 100 dealers in the Czech Republic and Progress' booth shrank in 2009. According to President Josif Prib, who is an agent for numerous brands, his company saved Slovakia, said Prib, as well as 22 Czech and seven Slovakian employees. Its annual sales revenue amounts to roughly 10 million, approximately US$50,000-60,000 that year. and its bikes have average retail prices of 700-1,000. Progress has been a Giant agent since 2010, and Prib stressed that Progress does not just sell Giant bikes, but rather also provides outstanding technology and quality to customers. Thanks to Progress dedication, orders have been pouring in since the start of 2010, and many of which have been for high-end bikes. bp Lumen BP Lumen full product line ranges from BMX and other whole bicycles to e-bikes and parts. CEO Pavel Barta considers e-bikes to have great promise, and let consumers test ride e-bikes at the show. BP Lumen only began selling e-bikes in 2009; its e-bikes fetch retail prices of approximately 1,500, and the estimated sales figure for the year was only about 200. Barta began cycling ten years ago, and his company has roughly 30 employees. The company s brand name is Apache, and it performs OEM manufacturing in the Czech Republic. Of the 8,000 bikes sold in 2009, 50% were mountain bikes. Sales Manager Lukas Barta, the president s son, also rides, and began working at his father s company ten years ago, helping assemble bikes in the warehouse. BP Lumen is an agent for many foreign brands, including SR Suntour and Limar; its Taiwan agent is Carol Cycle. BP Lumen's father and son team: President Pavel Barta (right) and Sales Manager Lukas Barta (left). Dandy Dandy is a trading company. Here President Ivo Danacik (left) is shown with his son Jakub Danacik (right). Dandy began collaborating with Tianjin s CITIC Group two years ago, but the two parties went separate ways in 2009. According to Dandy President Ivo Danacak, this breakup was due to the failure of the CITIC Group s managers to understand Czech culture and problems with making timely deliveries. Dandy currently has 70 distributors in the Czech Republic, and imports frames from China. The quality of Chinese products is unstable, claimed Danacak. Dandy has annual Dandy sells approximately 12,000 bikes annually. www.biketaiwan.com 2010 Spring BMU 103