A Giant Leap For Mankind  

The Economst has a report on booming bike sales, noting "Obesity and high oil prices are good news for the world’s biggest bikemaker" - On your bike.

THESE are tough times for carmakers, many of which are labouring under high oil prices, slowing demand and financial weakness. For makers of human-powered, two-wheeled vehicles, by contrast, business is booming. Giant Manufacturing, the world’s largest bicycle-maker, sold a record 460,000 units last month and is heading for its best year ever. Such is the demand for bikes that shortages were reported in New York earlier this year. In Taiwan, Giant’s home market, supply is tighter still: for many models, buyers put down deposits months before their bikes come off the assembly line.

After a slow 2006, sales took off last year in Europe and America as fuel prices shot up. Suddenly a bicycle seems like the remedy for many modern ills, from petrol prices to pollution and obesity. Each market has its own idiosyncrasies. Europeans mainly use bikes for commuting, but have the odd habit of ignoring models made explicitly for that purpose in favour of sleeker, faster models which are then expensively modified. Americans prefer off-road BMX trail bikes. Taiwanese demand is led by racing-style bikes used for exercise.

Giant, as the largest producer, makes everything for every market. Its share price has held up fairly well despite stockmarket turmoil and dramatically higher costs for raw materials, notably aluminium. Strong demand and a desire for better bikes have allowed bikemakers to pass higher material costs on to buyers. Since 2004 wholesale prices of bikes have gone up by 23% in Europe, 45% in America and almost 50% in Asia, even as thousands of low-cost factories in China, including some run by Giant, churn out boatloads of cheap bikes.