Chinese e-bikes to face EU dumping probe


🔊 Podcast: EU e-bike dumping probe could worsen trade tensions between Europe and China

Listen in as MLex's Managing Editor in Brussels James Panichi is joined by Chief Correspondent in Trade Poppy Carnell for a lively discussion covering the ...


2 October 2017. By Poppy Carnell

Chinese e-bike producers such as Fuji-Ta, Geoby and Tiajin Goldenwheel are expected to face a dumping probe by the second half of October, MLex has learned.

This investigation, which is likely to be followed by an antisubsidy complaint, could be one of the EU's biggest trade-defense cases, worth up to around 400 million euros ($470 million).
 
The European Bicycle Manufacturers Association filed its dumping complaint in early September, and is expected to lodge a request for an antisubsidy probe in time for the European Commission to open the inquiry by the end of the year. Both cases include pedal-assisted electric city bikes and electric mountain bikes with lithium batteries.
 
The probe will also affect companies such as Taiwan's Giant, which makes bikes in China and exports them to Europe.
  
Last year, Chinese companies exported an estimated 800,000 e-bikes to Europe, 40 percent more than the year before. They sell them in the EU for about half of the price of European manufacturers' bikes. 
 
EU sales of e-bikes, which is around two million units a year, is projected to increase to five million annually over the next five years. European bikemakers fear most of the growing market will be taken by cheaper Chinese models. 
 
A lot of money is at stake, with the value of the case pitched at up to 400 million euros. This figure is taken from projected sales this year, with the current average import price to distributors at around 456 euros.
 
The Electric Bike Worldwide Report predicts that the e-bike industry is poised to grow from 200 million worldwide today to two billion by 2050, meaning the potential value linked to the case is much more.
 
Europe's larger e-bike producers include KMT, Haibike and Lapierre. More than 800 small and medium-sized companies produce bikes and their components.
 
EU producers have invested heavily in the growing sector — 1 billion euros was invested by EU producers in the last year — to push innovation in green technology. But with the increase in Chinese market share, which producers say has gone from around 20 percent to 30 percent between 2014 and early 2016it's becoming harder for EU producers to remain at the cutting edge due to the loss in custom.
 
EU market share has gone down from 74 percent in 2014 to 61.9 percent in 2016.
 
The European bike industry, for both normal and electronic bikes, accounts for 90,000 jobs in Europe.
 
The bike association also claims leaving the market without measures against China would have a knock-on effect on other companies. Bosch, for example, is one of the main suppliers of motors to Europe's e-bikes. If the European bike makers will suffer, so will they, the group says.

Subsidies

On top of the dumping, European manufacturers say, Chinese rivals are benefiting from state aid. This includes, for example, forms of cheap loans and grants, subsidies linked to high technology development, training in professional skills linked to the industry and other schemes. They also receive patent protection for free, which is a big cost for European companies, the industry says.
 
EU bikemakers hope the commission will open an antisubsidy probe, which lasts 13 months, to run in parallel with the dumping probe, which lasts up to 15 months.
 
The European Bicycle Manufacturers Association will also be asking the commission to impose registration on Chinese imports from the start of the probe, which allows investigators the option to retroactively impose tariffs from the point of registration.
 
E-bikes are produced in 22 out of the EU's 28 member states. Germany is by far the largest producer in the bloc, followed by the Netherlands, Hungary, France and Austria.