Asian manufacturers adopting changing preferences in lucrative European markets Asiabike invests millions in e-bike production

COLOMBO, Sri Lanka – Sri Lanka’s largest bicycle manufacturer, Asiabike, has invested in the production of e-bikes. The southeast Asian manufacturers’ new focus on e-bikes is in line with changing bike preferences in one of its leading European markets.

Satnam Singh

The investment is ideally timed as sales of traditional bikes are declining, and there is a clear rise in e-bike sales in Europe. In the latest EU import statistics, Sri Lanka holds the eighth position as an e-bike importer after South Korea. “We see a clear spike in the sales of e-bikes in Europe in the immediate post-Covid phase, and despite current market challenges, e-bike sales continue to grow. Moreover, EU governments are offering subsidies to buy electric bikes, further pushing their sales,” said Isthiark Farook, Asiabike managing director, during an interview at the new Horana-based e-bike site located about 35 km from the country’s capital Colombo. In addition, mobility preferences are changing in Europe: “There is a clear change in micro-mobility in the post-Covid phase – e-bikes as a personal mode of transport are preferred over mass-transit systems. Sharing schemes are also providing an impetus in their sales.”

Production of e-bikes treble

The company has invested €4.7 million in the new e-bike facility, which spreads over a 7-acre land parcel with a 20,000 square metre built-up area. The factory was constructed in 2019, but the pandemic forced the Sri Lankan bicycle manufacturer to slow down. The production started to pick up again in 2021 when orders started coming in from Europe. “We started initially with 2,000 e-bikes per month, but now production accelerated to 6,000 units each month for shipment to Europe,” he claimed.

Asiabike manufacturing expertise includes both hub motors and mid-motor variants. The majority (65%) of production is dominated by the low-priced hub motor variant, while the high-priced mid-motor variant consists of the remaining 35%. Currently, Asiabike offers seven models in mid-motor and 18 models in hub-motor versions. The company targets mainly mid-motor markets of Germany, the Netherlands and Belgium, while the hubmotor variants go to the Italian, Polish and UK markets.

To be successful, Asiabike is aware that it must build up a strong network for after-sales service for its customer base in Europe. It has been looking for a company with a strong European e-bike after-sales service network. “Last October we bought a minority share of a Belgian firm based in Damme to provide unhindered 24/7 after-sales service in Europe for critical parts like the motor and controller,” informed Farook.

Critical components

The Sri Lankan producer has entered into strategic alliances for procuring battery cells with LG, Samsung, Panasonic and European standard-approved Chinese cells in cell capacities of 2600mAh, 2900mAh, 3200mAh and 3500mAh.

The bike range has battery packs of 36 Volt to 46 Volt ranging from 10.4, 13, 14.5 and 20 ah. They can be charged fully in four hours and can go from 40 to 100 km depending on the battery capacity of the model. Asiabike also has in-house battery production and can customise battery capacity as per customer specifications.

The e-bike range is powered by Bafang motors systems, including the controllers and displays. In terms of localisation, Farook said, “Thanks to our in-house production of batteries, frames, wheels, and our painting line, we can offer almost 50% local production. Another 10% can be added through sourcing from neighbouring SAARC countries (South Asian Association for Regional Cooperation) and even from Europe as per GSP rules.”

Production hike

Meanwhile, the bike manufacturer is moving cautiously from now on considering the evolving scenario in Europe. All further expansion plans will be decided after Eurobike 2023, where it will showcase the new range of e-bikes. “The European market is greatly impacted by the Russia-Ukraine conflict. The European market has shown signs of recession, and future expansion depends on the feedback from our participation at Eurobike.”

According to Farook, the mega boom of 2020 in traditional bikes in Britain is already over as traditional bicycle sales failed to regain pre-Covid levels, and even e-bike sales are stabilising. The British and German markets are comparable, but only 165,000 e-bikes are sold in the UK compared to two million in a year in Germany.

Overseas expansion

Sri Lanka continues to stare at unsustainable debt and severe balance of payments crises, posing significant uncertainty for Sri Lanka’s fiscal outlook. The local business community