Central Europe seeks bigger role in bicycle production

For reshoring production and improving market flexibility by manufacturing in Europe instead of Asia, the central European countries have always played a key role. Although no country has taken a leading role, like Portugal, that does not mean that the region plays a secondary role within the industry. Several new facilities were started in recent years and existing ones upgraded their output quality.

The relatively low costs of labour were regarded as the main benefit of producing bicycles in central Europe since brands started to source here in the 1990's. A wide range of companies supplying the western European market are based in countries like the Czech Republic, Poland, Hungary, Romania and Lithuania and their number is growing. With recent investments in new factories, production automation and logistics companies in these countries are preparing to play a more dominant in the industry. RTE, Neco, EBFEC, Puky and Van Raam just to name a few of the companies who have found a new home in Poland.

Closing salary gap

The opening of the Pon factory in Lithuania in September this year was highlighting central Europe’s role as a manufacturing location for bicycles and e-bikes. The close proximity to Europe's key bicycle markets like Germany and the Netherlands, much closer than Portugal, is often mentioned as the key competitive edge for central Europe. The lower cost of labour is still an important element for brands when choosing a supplier in central Europe, but especially in countries like Czech Republic, Poland and Hungary the salary gap with western Europe is closing quickly.

Romet President Wieslaw Grzyb told Bike Europe: “In the future the cost of labour will also become a topic in Poland and we need to step up the automation in both the production and our warehouse. Besides production efficiency it also allows us to improve the quality of our final products without raising the costs per unit.” Janco van der Heiden, vice president of operations at Pon.Bike made clear why they had chosen for Lithuania as their next production location; “the logistics’ system in the country operates excellently and the country is known for its stability, ease of doing business, and skilled workforce.” Pon has a long-time experience with sourcing bicycles and cargobikes from Lithuania thanks to their partnership with Baltik Vairas based in the country.

Logistical advantage of central Europe

“The gap between the cost of labour in western Europe and the Czech Republic is too small to win from our competitors on price,” Czech Republic based Bike Fun International CEO René Gasser says. The company has more than 20 years' experience in supplying leading markets like the Netherlands and Germany. This Czech company emphasises the logistical advantages of its close proximity to the market position. “We concentrate more on logistics and JIT delivery to customer’s warehouse. For that reason, we try to have local salespeople in each market to explain the total BFI experience to our customers. We have a lot of knowledge of specifying city bikes in various countries. Here we can prove our added value. We deliver our part of the complex solution in the business.”

Portugal’s leading bicycle manufacturer and long-time partner of Decathlon, RTE even ventured into Poland with a €20 million investment in a new facility. Initially the factory opened in October 2021 and has a capacity of 500,000 units per year which is to be doubled to 1 million units in a second phase.

The close proximity to leading markets was reason for Darfon to open an OEM e-bike assembly and batteries production facility in the Czech Republic. The facility had been in place for Darfon’s electronics business for many years but was recently extended to facilitate the e-bike industry with a €3.5 million investment. The key element for Darfon to distinguish this factory is the combination of e-bike assembly and battery production line in one building. In line with the company’s strategy to offer one-stop-shop solution Darfon also inaugurated a new center for product development, design and innovation for the e-bike industry last January. This center is located in Poland.

Chinese investment

Backed by the Chinese manufacturer of home appliances NKI, Polana Bikes opened a new facility in Myslowice, and commenced production late 2023. “Poland is becoming a large manufacturer and at a lower cost than Portugal and more companies are choosing to locate there which confirms to us that there is a strong supply chain,” CEO Tomasz Kowalski told Bike Europe.

Kids bikes production in Poland

In the category kids bikes, both Woom and Puky choose to venture into Poland to expand their production capacity. Once Puky found out that the company headquarters in Wülfrath could not be expanded due to limited space, their eyes fell quickly on neighbouring country Poland. Puky Polska was founded early 2022 and a modern production facility on more than 3000 square meters was built in Opole. “After the delivery problems with Asian suppliers during the pandemic and the uncertain political situation with regard to China and Taiwan, we decided to continue to keep production in Germany and neighboring European countries,” said Puky managing director Mathias Heller explaining their choice for Poland.