Where would you rather your bicycle be manufactured—China or Taiwan?

by Glenn Reeves on July 3, 2012

Taiwan carbon manufacturing

100% Made in Taiwan

You’d probably hope for the latter, although it’s unlikely to be the case.

Back in March Velo News published an article pointing out what industry insiders all know: that high-end bicycle frames are 1) hand made by 2) a few large manufacturers (in which Giant looms prominent) based in China.

When it comes to the rest of the components that go into a particular model every year, however, you are faced with a complex web of customer-supplier relationships in a maze of infinite regression that changes from one year to the next (the subject of a lot of wheeling [!] and dealing at Taichung Bike week in December each year).

Brands themselves are increasingly being swept up by holding companies that now hold ultimate ownership and the benefit of the bottom line.

For example, the Accell group which owns Lapierre, Ghost, Koga, to name a few has “production facilities in the Netherlands, Germany, France, Hungary and Belgium” quote unquote. Pon Holdings is an “international trading and service company”  that recently purchased Cervelo Cycles Inc. and includes Derby, Gazelle and an equally select number of high-end Auto companies (Audi, Volkswagen, Skoda).

The point is that manufacturing largely takes place in China although workshops and factories in Taiwan are involved—what gets done where is the outcome of the interplay of a whole host of factors.

By highlighting the reality of the OEM dimension of the industry the article is refreshingly welcome. However it does downplay the degree to which production agreements depend on Taiwanese  suppliers (with large production facilities in China)  for technical innovation and solutions to problems. You take your design to the manufacturer and they have got to come up with a way to make it happen which in many cases is easier said than done.

In other words, it’s not simply a case of design happening in the “R&D” facilities located in Europe or the States followed by mindless execution of blueprints in an “Asian” workshop. ODM best describes what is going on most of the time.

Anyhow if truth is important to you, then practice keeping a critical distance from branding/marketing spin—eg. “handmade in the USA” which I noticed is accompanied by a disclaimer to the effect that “some parts and processing may occur in locations other than the USA—myth-making that obscures a reality which while simple on the surface is complex once you delve into it.

On a recent visit to our own company’s painting factory I noticed a production of Bianchi carbon frames. They had been manufactured and painted in China. However the paint job was far below standard. So Bianchi’s agent arranged for a patch-up job to be done in Taiwan by this small, independent operator.

paint factory

Kelvin’s craftsmen finesse the clear coat to a perfect finish

Kelvin might be  in charge of a small, independent operation, but he has had to process some enormous orders, the biggest of which was 7000 Pinarello frames. He had served a long apprenticeship learning the ropes in a large workshop and was now striking out on his own.

These types of jobs are becoming quite common to the point where manufacturers increasingly bypass Chinese (albeit Taiwanese-owned) manufacturers and simply have the painting done in Taiwan. It represents quite the challenge for the Taiwan end since the quality of the carbon has a large bearing on the success of the job.

In Taiwan there is eternal antagonism between frame manufacturers and painters. Common issues include pinholes in the surface layer and carbon “dust” that has not been blown out of tubes, particularly forks. The painter only comes to know about these problems often only at the clearcoat stage by which time the damage is done

A pinhole suddenly shows up as harshly, glaringly obvious pit in the finish. This means reworking the piece by filling the hole and repainting. Painters put it all back on to the manufacturers who retort that it has nothing to do with them but points to the painter’s substandard workmanship. You’d have to err on the side of the painter in this from what I have seen—manufacturers are a little too quick to pass the buck.

There are a lot more of these sorts of issues for China productions which is why smaller brands such as ours resist the call of economies of scale. Sourcing from China pushes your cost per unit ridiculously low, the downside being a higher rate of defects but worth it in the overall scheme of things except, of course, if someone should die due to component failure. Normally a recall (a reasonably regular occurrence these days…including the ones you don’t hear about!) will suffice. A small brand cannot afford this however.

At the 2009 Taiwan Global Brand Forum, Fausto Pinarello declared that “The best carbon frames are made in Taiwan”. That might have been true then as it is now although at that time China was the place, and remains the place, where the bulk of production happens.

With skilled labor shortages and the rapid escalation in manufacturing costs in China, more component manufacturers are returning to Taiwan or increasing the amount of added-value processing done here. Consumers are unlikely to pay more over the counter, but margins will certainly be squeezed. That would appear to be a win for the consumer who comes to get a higher quality product in which Made in Taiwan (already appreciated by discerning consumers in China) is rightfully recognized as a prestigious label.

PS. Check out the comments about this post on the Primavera Cycles Facebook page.

Leave a Comment

{ 2 comments… read them below or add one }

Monica July 20, 2012 at 3:50 AM

Well I have very bad expereince with Taiwanese suppliers.
For few years had been co-operating with a company from Taiwan. The owner took downpayment from me and I never heard of him again.
I have order of payment from Taiwanese court – but this court is not at all helpful.
The creditor must show the property and assets of the debtor in order to be executed!!!!!
The debtor got rid of his property and I cannot execute the goods!

Glenn July 20, 2012 at 12:10 PM

Sorry to hear about your experience Monica. This sort of thing happens in business everywhere. It actually happens a lot to Taiwanese suppliers who supply goods instead of insisting on payment in advance–and lose the lot, the reverse of your situation. Anyhow, I hope you get some kind of resolution to this in the future.

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