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Brompton has warned of tariffs on Chinese bikes and parts being scrapped, with the UK's largest bike manufacturer predicting that cheaper imports could “kill” the company.
The UK government is reviewing tariffs inherited from the EU after Brexit – including measures restricting Chinese bikes and spare parts. In May last year, the UK's Trade Remedies Authority (TRA) – the body responsible for the reviews – recommended that ministers remove tariffs on Chinese e-bike imports, saying it would save the UK up to £51 million each year.
“I don't need the government to support me (with specific support for the bike industry). I just don't want 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, where she is expected to visit a Brompton store, Butler-Adams said the move could lead to the 600 staff being laid off at the company's factory in west London.
He said removing the tariffs could mean an influx of cheaper Chinese imports, which would further hurt the company, which is already suffering from stagnant demand for bikes after the pandemic.
Brompton's earnings for the year ending March 2024 It's down 99 per cent to just £4,602 From around £11 million the previous year. Its sales fell by 5 per cent to £122.6 million.
“Since the pandemic, we've seen the cost of a bike go down 40 percent because the market (has excess inventory),” Butler-Adams said.
Excess inventory and discounting have led to a rise in bankruptcies among bicycle makers. “People are going bankrupt. If you sell a bike at a discount, you make a loss, so you don't sustain the industry.
Although bike sales rose during lockdown, demand has since fallen and the UK bike industry has been hit by bankruptcies. Mercian, Orange Mountain Bikes and P Bairstow are among the manufacturers that have ceased trading since the end of the pandemic.
Butler Adams, who has led Brompton since 2008, said the government needed to “think more strategically” to prevent further closures. “We know that in the rest of Europe, these definitions still exist… That's all we're asking for here – a level playing field,” he added.
Butler-Adams admitted that China was now Brompton's biggest market, partly due to the lack of trade barriers imposed by the Chinese government on British imports.
However, he said that “sophisticated, well-organised and well-resourced (Chinese competitors)” would enter an already competitive space in the UK market.
Butler-Adams also raised concerns about the safety of Chinese imports: “Bikes are not toys. If they break, they can kill someone; it's no joke,” he said.
“When you start thinking about e-bikes, you think about lithium batteries,” he said, blaming the spate of fires caused by e-bike batteries around the world on “low-quality, unregulated bikes that are illegally imported from China or Vietnam.” . “.
“If we had a sophisticated auditing system (the safety concerns would be unfounded).” . . But the man in the harbor has no idea. He added that he did not know anything about the bike's standards.
The company raised £19 million in May 2023 in a funding round led by BGF, a British investment fund backed by five large banks, to pay down debt and support the brand's growth.
Butler Adams' goal is to move the company to its new headquarters in Ashford, Kent, by 2029 – two years later than originally hoped. He said the expansion would allow the company to reach £250m in turnover, up from £122.6m in 2024 and increase staff numbers to 1,500.
“A decision has not yet been made on these specific tariffs – but the independent TRA is there to ensure that our tariffs work for our economy,” the Department of Business and Trade said.
The TRA said all investigations were conducted in accordance with the World Trade Organization and domestic legislation, and that it made its recommendation on Chinese e-bikes after a “robust economic assessment based on available evidence.”
