Executive Briefings

After Years Offshore, Bike Production Rolls Back to the U.S.

From hand-crafted boutique brands to high-volume manufacturing and assembly, dedicated U.S. bicycle makers are reshoring bike production to the U.S. A confluence of factors including rising offshore costs, the benefits of a "local for local" business strategy, the growing popularity of bikes in expanding urban areas and patriotism are giving rise to new opportunities for an "old" mode of transportation.

The move of American-made bicycles offshore began with industry leader Schwinn shifting manufacturing to Asia in the 1980s. In an effort to take advantage of low wages, other large bicycle manufacturers like Huffy and Trek soon followed, at least in part. By 2015 only 2.5 percent of the estimated 12.6 million bikes sold in the U.S. (not including those for children) were made here, according to the National Bicycle Dealers Association.

However, as offshore wages began to rise, bicycle manufacturers began to rethink their offshore manufacturing and sourcing decisions. Driven by rising offshore costs, the cost savings of automation and innovative processes, and the benefit of “Made in USA” branding, reshoring bike manufacturing and assembly began to make good economic sense.

According to the International Bike Organization, the U.S. was in the top five for bicycle production in 1990 at 5.6 million units. As more offshoring occurred, U.S. bike production fell to a low of 200,000 units in 2015 but the trend is looking up. The U.S. is on track to produce over half a million bikes this year.

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The move of American-made bicycles offshore began with industry leader Schwinn shifting manufacturing to Asia in the 1980s. In an effort to take advantage of low wages, other large bicycle manufacturers like Huffy and Trek soon followed, at least in part. By 2015 only 2.5 percent of the estimated 12.6 million bikes sold in the U.S. (not including those for children) were made here, according to the National Bicycle Dealers Association.

However, as offshore wages began to rise, bicycle manufacturers began to rethink their offshore manufacturing and sourcing decisions. Driven by rising offshore costs, the cost savings of automation and innovative processes, and the benefit of “Made in USA” branding, reshoring bike manufacturing and assembly began to make good economic sense.

According to the International Bike Organization, the U.S. was in the top five for bicycle production in 1990 at 5.6 million units. As more offshoring occurred, U.S. bike production fell to a low of 200,000 units in 2015 but the trend is looking up. The U.S. is on track to produce over half a million bikes this year.

Read Full Article