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Brompton has warned against tariffs on Chinese bikes and parts, as the UK’s biggest bike maker fears cheap imports could kill its business.
The UK government is reviewing the tariffs it inherited from the EU following Brexit – including measures to curb Chinese bikes and parts. In May last year, the UK’s Trade Remedies Authority (TRA) – the body responsible for reviews – proposed that ministers impose tariffs on Chinese e-bike imports, which would save the UK up to £51mn each year.
“I don’t need the government to support me (special support for the bicycle industry). I just don’t need them to kill me, you know?” he said. Brompton CEO Will Butler-Adams.
Speaking to the Financial Times ahead of Chancellor Rachel Reeves’ visit to Beijing, Butler Adams said the move would create jobs for some 600 workers at the company’s factory in west London.
The tariff hike could mean a flood of cheap Chinese imports, which could further hurt the company, which has been struggling with a post-pandemic slowdown in bicycle demand, he said.
Brompton profits until March 2024 99 per cent down to £4,602. It was about £11mn from last year. Profits fell 5% to £122.6mn.
“Since the pandemic, we’ve seen bike prices drop 40 percent because the market (is overstocked),” Butler Adams said.
Stockpiling and price cuts have led to increased losses among bike makers. “People are getting angry. If you’re selling bikes at a discount, you’re making a loss, so you’re not going to sustain the industry,” he said.
Although bicycle sales increased during the lockdown, demand fell and the UK bicycle industry was saddled with losses. Among the manufacturers that went out of business after the outbreak ended were Mercian, Orange Mountain Bikes and P Bairstow.
Butler-Adams, who has led Brompton since 2008, said the government “needs to think more strategically” to prevent further closures. “We know that in the rest of Europe these tariffs will remain. . . That is all we are asking for here – a level playing field,” he added.
Butler Adams acknowledges that China is currently Brompton’s biggest market, in part, due to the lack of trade barriers the Chinese government has imposed on British imports.
However, he said that “sophisticated, well-organized and well-resourced[Chinese competitors]” are already in a competitive position in the UK market.
Butler Adams raised concerns about the safety of Chinese imports: “Bicycles are not toys. If they break, they can kill someone; It’s not a joke,” he said.
“When you start thinking about e-bikes, you think about lithium batteries,” he said, blaming e-bike battery fires around the world on “unregulated bikes being smuggled in from China or Vietnam.” He said.
“If we have a sophisticated audit system (security issues will be unfounded). . . But the man at the port didn’t get a clue. He knows nothing about bicycle standards,” he added.
The business has raised £19mn in funding through May 2023, led by UK investment fund BGF, to pay down debt and support the growth of the brand.
Butler-Adams aims to move the company to its new headquarters in Ashford, Kent, by 2029 – two years later than originally expected. He said the expansion would enable the business to generate £250m by 2024, up from £122.6mn and increase its workforce to 1,500.
The Department of Trade and Commerce said: “No decision has yet been made on these specific tariffs – but they are there to ensure that free TRA tariffs work for our economy.”
The TRA has conducted all investigations in accordance with WTO and domestic laws and made its decision on Chinese e-bikes after a “robust economic assessment based on evidence”.
