TAICHUNG, Taiwan (BRAIN) — The CEO of A&J Bicycles — one of the world’s largest original equipment bike makers, with factories in Taiwan, China, Vietnam, and Cambodia — is warning customers of possible shipment delays due to the novel coronavirus outbreak in China. He said the situation in China could lead directly to delays in production even at A&J factories in other nations.
A&J has supplied brands including Trek, Bianchi, Scott, Felt, Rocky Mountain, Norco, and Kona in the past. BRAIN reported last year that Trek was moving some production from Giant to A&J’s factory in Cambodia because of U.S. and European tariffs on Chinese imports.
“(In Vietnam) there is some anti-Chinese sentiment building, because of the potential of Chinese workers on site carrying CV (coronavirus),” Jon Edwards, the CEO of A&J Group, said in an email to customers late this week.
“We have heard today that some Vietnamese factories staff have initiated ‘2 week’ strikes to effectively close factories where China staff are situated, to ensure there is no CV being spread to the local workers. We are concerned that this could spread in the coming days and could even affect our own area in Vietnam,” Edwards told customers in an email obtained by BRAIN.
“(In Vietnam) there is some anti-Chinese sentiment building” — Jon Edwards
Edwards said any shutdowns in Vietnam would lead directly to delays at A&J’s Cambodia factory, which depends on hydroformed and butted frame tubes from Vietnam.
Last year the U.S. imported 264,000 bikes from Cambodia, twice the imports from 2018. The U.S. imported 104,000 bikes from Vietnam last year, up from near zero in 2018.
He reported that all A&J employees are virus-free, but that its Chinese factories are running at a slower pace than usual as quarantines and travel restrictions prevent workers from returning to factories following trips during the Chinese New Year holiday.
“This ‘potential’ event is for sure out of our control, and although we will continue to do all we can to keep things moving along in both factories, in the case of a strike we have no choice but to sit tight and wait it out,” Edwards wrote. “We will continue to keep you updated as things develop be they positive or negative, but we feel that forewarned is forearmed, which is the reason for this mail.”
For non-A&J factories in China, production is very slowly ramping up after the holiday, with some local officials barring factories from re-opening until Feb. 17 or later, sources within the industry tell BRAIN. Most bike makers, even if they assemble elsewhere, still get a significant amount of their parts from China and are bracing for delays as a result.
Specialized’s Bob Margevicius said the company is watching the situation carefully.
“At this moment, based on the China factories being on lock down, we anticipate there may be delays in receiving bicycles and bicycle components. Fortunately, we are in the winter months, (Chinese New Year) was early, there are 29 days in February, and the Chinese will work doubly hard to fill all orders,” he told BRAIN. Margevicius is Specialized’s executive vice president.
“The important consideration is this a global crisis, not just impacting the USA. Everyone is fighting for product, production and availability for everything. I do think the Euros, who are managing their own supply chains, are directly impacted. They will be very proactive in pressing the suppliers to deliver.
“At this moment, the factories in Taiwan and (Southeast Asia) are being very cautious until things settle down. We are watching carefully, in contact with our Asian teams on a daily basis, pray for the those who are infected and have died, and are proactive in contributing to efforts to find a cure,” Margevicius said.
According to the latest information from WHO, there are 10 confirmed cases of novel coronavirus infection in Vietnam and one case in Cambodia. There are more than 30,000 confirmed cases in China.