INDUSTRY: They Like Bikes

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If the fears of some nervous retailers prove valid, there will be many a disappointed child this Christmas. The nation faces a serious bicycle shortage.

Schwinn Bicycle Co., one of the biggest wheels in the $400 million-a-year industry, had booked orders for its entire 1971 production by last month. Other major U.S. manufacturers—Murray Ohio, Huffman and AMF—are also having trouble keeping pace with runaway demand. Sales in many bicycle shops are racing 200% ahead of last year's level, and delivery dates for new merchandise are uncertain. Complains Gano Thomas of San Francisco's Nomad Cyclery: "The factories aren't making bicycles fast enough. If we order 100 bikes, we're lucky to get 25." Adds Henry Devilmorin, a Los Angeles two-wheeler dealer: "I can sell every bike I can get my hands on."

Cyclical Demand. The shortage results from the bicycle's biggest wave of popularity in its 154-year history. Environmentalists are turning to the bike as a pollution solution; physical-fitness fans like the bike as a heart preserver. Groups of workers in some traffic-choked cities have been staging rush-hour races among car, bus and bicycle, with the bike usually triumphant.

In recent years the bike business has been, to say the least, cyclical. Demand rose to new heights in the mid-1960s with the introduction of high-risers —those small-wheeled children's bikes with elongated "banana" seats, tall "ape-hanger" handlebars, and moderate $30-$50 price tags. Then an adult bike boom ballooned, and demand shifted to lightweight ten-speed racers that start at around $85 and range upward into used-car prices: $475 or more. Bicycle-company spokemen say that this year, for the first time since the 1890s, nearly one-half of all bicycle production is geared for adults. Caught in the intergenerational crossfire, manufacturers turned out 6,000,000 bikes in 1968, then cut production to 5,000,000 in 1970. For 1971, bikemen are boasting of coasting to 7,500,000 sales.

Foreign producers are also unprepared for the demand. Major foreign bicycle names—notably England's Raleigh, France's Peugeot and Japan's diplomatically named American Eagle—account for one-third of the bikes sold in the U.S. Under pressure from Washington, American Eagle has been setting limits to its annual sales increases. Both the domestic and foreign companies are also struggling with a worldwide shortage of parts. Most bike hand brakes and gears are produced overseas, and until the manufacturers catch up with back orders there will be a brake on further expansion. Schwinn, for example, has to air-freight brake parts from Switzerland to keep its production schedule from being thrown out of gear.

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