Are FreeGo the first casualty of Anti Dumping?

[Chris M]

I know nothing of the bike industry but I have seen the Chinese "dumping" in the automotive industry. Exactly the same Chinese made item was offered at a considerably cheaper price to a European company that it was to a Chinese company. The only explanation I can see for this is that they were selling below cost to Europe in order to put European competitors out of business. That is why anti dumping rules were introduced.

 

[Deleted member 128]

Ironic that the EU is moaning about Trump`s threat of Tariffs on their Cars and then doing the same to the Chinese Bikes . Nothing but a bunch of hypocrites . I well remember the butter and cheese` mountains` , wine` lakes` and milk` lakes `accumulated 40 years ago, which resulted from protecting their Farming and Agriculture , although mainly to appease the French it must be said . In the end they had to give these surpluses away to poor African Countries . Perhaps the same will happen to their Ebikes when they have priced themselves out .

I don't think Trump is accusing the EU of dumping its cars on the USA, but having said that it's difficult to comprehend what he thinks he will achieve.

 

[flecc]

I know nothing of the bike industry but I have seen the Chinese "dumping" in the automotive industry. Exactly the same Chinese made item was offered at a considerably cheaper price to a European company that it was to a Chinese company. The only explanation I can see for this is that they were selling below cost to Europe in order to put European competitors out of business. That is why anti dumping rules were introduced.

This definitely doesn't apply in the e-bike market. The Chinese have always had the bulk of it and the much smaller European industry build with Chinese made parts anyway, importing almost everything, just painting and building.

The current EBMA promoted EU anti-dumping levy was pure protectionism, not liking the competition of the newer Chinese crank units and their possible effect on Bosch et al.

Unfortunately it will go much further than protection of Bosch et al. It will drive our consumer prices up, reduce consumer choice and could eventually wipe out our smaller manufacturers. It's completely unjustified and very wrong.
.

 

[Deleted member 128]

This definitely doesn't apply in the e-bike market. The Chinese have always had the bulk of it and the much smaller European industry build with Chinese made parts anyway, importing almost everything, just painting and building.

The current EBMA promoted EU anti-dumping levy was pure protectionism, not liking the competition of the newer Chinese crank units and their possible effect on Bosch et al.

Unfortunately it will go much further than protection of Bosch et al. It will drive our consumer prices up, reduce consumer choice and could eventually wipe out our smaller manufacturers. It's completely unjustified and very wrong.
.

This is very tough on the small UK ebike suppliers and I very much sympathise with their predicament but I still don't understand why EU companies taking somewhat belated steps to protect their businesses is seen as "protectionism" and being "completely unjustified".
If Raleigh was still a large UK company with big factories in the UK wouldn't it be favour of these anti-dumping measures?

 

[Woosh]

This is very tough on the small UK ebike suppliers and I very much sympathise with their predicament but I still don't understand why EU companies taking somewhat belated steps to protect their businesses is seen as "protectionism" and being "completely unjustified".
If Raleigh was still a large UK company with big factories in the UK wouldn't it be favour of these anti-dumping measures?

unfortunately, we don't have much of an indigenous e-bike manufacturing. Transition from importing, distributing and support to manufacturing requires a huge scaling up effort, well beyond the means of most trade members of this forum.

 

[Deleted member 128]

unfortunately, we don't have much of an indigenous e-bike manufacturing. Transition from importing, distributing and support to manufacturing requires a huge scaling up effort, well beyond the means of most trade members of this forum.

I really do sympathise but going back to my question, if Raleigh was still a large UK company with big factories in the UK wouldn't it be favour of these anti-dumping measures? Maybe the challenges/objections of smaller UK ebike suppliers would be better directed towards larger suppliers worldwide rather than blaming the EU, Germany or whoever.
The challenges of scale have forever been there, if Rayleigh was still the largest bike supplier in the world wouldn't you be complaining about their business model?
Maybe focus on local UK support, availability of parts long term, flexibility in customising customer's ebike orders, upgrade paths, trade-ins of ebikes, trade-ins of batteries, trade-ins of motors.....

 

[soundwave]

https://www.theguardian.com/environment/2018/jan/02/rubbish-already-building-up-at-uk-recycling-plants-due-to-china-import-ban

A ban on imports of millions of tonnes of plastic waste by the Chinese government is already causing a build up of rubbish at recycling plants around the UK and will bring chaos for councils in the weeks ahead, according to industry experts.

haha pmsl

 

[Woosh]

I really do sympathise but going back to my question, if Raleigh was still a large UK company with big factories in the UK wouldn't it be favour of these anti-dumping measures?

of course it would, hypothetically.
However, the 86% levy is not supported by real facts. There was and still is no distortion of the market, the dumping that the EBMA accused Chinese manufacturers of rests on 'illegal support given by Chinese government to their manufacturers'.
If this accusation were justified, then the components that I buy from China for re-assembly in the UK should have been placed under the same anti-dumping tariff. The difference in cost of a finished bike less the cost of the components is labour cost in assembly, about £40 a bike in China, £75-£100 in the UK, a small percentage of the total cost of the bike and does not justify the punitive rate.

 

[Chris M]

When you say 86% levy is that 86% import duty on ebikes from China to the EU?

 

[Woosh]

When you say 86% levy is that 86% import duty on ebikes from China to the EU?

yes, that's correct. I paid a reduced rate, 37% last July because the factory I bought the bikes from cooperated with the EU investigation.
BTW, VAT is also charged on anti dumping levy.

 

[Wisper Bikes]

of course it would, hypothetically.
However, the 86% levy is not supported by real facts. There was and still is no distortion of the market, the dumping that the EBMA accused Chinese manufacturers of rests on 'illegal support given by Chinese government to their manufacturers'.
If this accusation were justified, then the components that I buy from China for re-assembly in the UK should have been placed under the same anti-dumping tariff. The difference in cost of a finished bike less the cost of the components is labour cost in assembly, about £40 a bike in China, £75-£100 in the UK, a small percentage of the total cost of the bike and does not justify the punitive rate.

Unfortunately we now understand that the EBMA will be pushing for anti circumvention measures which will put a stop to importing parts and building in the UK.

 

[Wisper Bikes]

yes, that's correct. I paid a reduced rate, 37% last July because the factory I bought the bikes from cooperated with the EU investigation.
BTW, VAT is also charged on anti dumping levy.

This is on top of the 6% duty you already pay? No wonder prices have been forced up, you’ve done well to keep it as low as 10%.

 

[Chris M]

So some Chinese made ebikes could be close to half the current price if there was no levy?

 

[Wisper Bikes]

So some Chinese made ebikes could be close to half the current price if there was no levy?

At least 25 - 30%, as usual big business is profiteering at the cost of the consumer and SMEs. Exactly the people who can least afford it.

 

[Woosh]

So some Chinese made ebikes could be close to half the current price if there was no levy?

No, that has never been the case.
There is a small price advantage buying from China but this is around 15% mark.
If you want the same EU quality, the cost is about the same, give or take 3%-5%. The cost of the bike is as usual the sum of its components plus about £40 labour if you operate at the scale of Chinese factories or £100 if you operate at my end of the scale.
Take the Bosch CX kit for example. Shimano and Yamaha offer competitive products but at about the same price. Bafang have tried to get in, at $500-$600 mark for their motors (minus the battery). Bafang is competitive but at this level, local network of dealers is worth more than $100 price advantage.
You need to scale up UK factories to the level of having 200-500 production posts to compete with existing EU27 producers. I doubt that any of us traders on this forum is capable of that.

 

[Chris M]

The levy is certainly working. I bought a Cube Acid which is an excellent bike and I am very very happy with it. I would almost certainly have bought a WestHill Ghost if it had been around £1,000 rather than around £,500. At £1,500 for the ghost I decided it was worth paying just a little more for the cube. I did wonder why what were obviously cheaper bikes weren’t cheaper but now I know.
This is of course good for German bike makers but bad for UK importers but let’s not go too deep into that.

 

[Woosh]

yes, it's an argument in favour of the Canada+ model for brexit.
there usually is a silver-lining somewhere to be found.
I haven't found it yet and still looking but I am getting closer.

 

[flecc]

This is very tough on the small UK ebike suppliers and I very much sympathise with their predicament but I still don't understand why EU companies taking somewhat belated steps to protect their businesses is seen as "protectionism" and being "completely unjustified".
If Raleigh was still a large UK company with big factories in the UK wouldn't it be favour of these anti-dumping measures?

Either we believe in fair trading globally or we don't. There is no subsidised dumping. The EBMA moves have nothing to do with dumping or company sizes and everything to do with forcing up import prices of e-bikes.

So to give some EU companies an unfair market advantage the consumer has choice reduced and prices increased. That is just wrong and indefensible.
.

 

[Charliefox]

What happens if the Chinese jack up the prices for all bike bits to a point where the EU can not say they are dumping? Would the 86% (+VAT!) anti dumping levy then have to be dropped? How would that affect the selling price of finished bikes. At the rate things are going here I would not be surprised if we end up paying World Trade tariffs for Chinese bikes and bits.....a lot less than 86%!

 

[Woosh]

What happens if the Chinese jack up the prices for all bike bits to a point where the EU can not say they are dumping?

they can't just jack up the prices of bike components, they are made in lots of different countries.

Would the 86% (+VAT!) anti dumping levy then have to be dropped?

No.
It's exclusively aimed at China.

At the rate things are going here I would not be surprised if we end up paying World Trade tariffs for Chinese bikes and bits.....a lot less than 86%!

If we are outside the EU's customs union, there won't be any anti-dumping against Chinese e-bikes so the latter will be more popular than German bikes but we can't probably sell our e-bikes to the EU27 tariff free.
Don't read too much into the 'clean break brexit' - we have a lot going on with the EU27, the probability for remaining in the EU customs union is very high.