Soaring Gas Prices Change Global Personal Transport Market

Soaring crude oil prices have driven gasoline prices at the pumps to record levels, to over US$4 per gallon in August stateside, the world's biggest car market. Coupled with the fallout from the sub-prime mortgage crisis in the U.S., record gasoline prices in North America and elsewhere are rattling the global auto market. Reports are that Americans are gradually forsaking gas-guzzling pickups and sport utility vehicles (SUV) for more gas-efficient options, with compacts and mid-sized cars rolling out showrooms only a few days after being trucked to dealerships. And hybrids as the Toyota Prius are fast becoming fixtures on highways, when only a decade ago gas-and electric engines were mostly science fiction.

American car sales for 2008 is expected to slow to a 15-year low; while American makes continue to lose market share to the Asian rivals, which are known for being more fuel efficient.

Toyota has recently toppled GM, formerly the biggest carmaker globally, in volume sold, as well as outdoing Ford to become the best selling car brand in the U.S. The Japanese car giant continues to strengthen its appeal by further leveraging the success of its Prius hybrid, applying the same technology to its high-end Lexus LS600H to expand its client base for hybrids.

Electric Bikes

Besides opting for more fuel-efficient cars, global consumers are also turning to two-wheeled electric bikes as a main transportation tool, which not only helps to save considerable fuel outlay, but also effectively meets stricter environmental protection standards worldwide.

SYM Corporation, a major motorcycle producer in Taiwan, added a new production line to its factory in Fujian Province on the southeastern coast of China in July to turn out electric bikes-aiming to sell several thousands units per month in the initial stage. The company is optimistic about the outlook of electric bikes both in the domestic and international markets. "Many big cities in China ban gas-powered scooters from entry, but not electric bikes for they don't emit pollution," says the company.

SYM is also engaged in a cross-border cooperation project with Taiwan's Industrial Technology Research Institute (ITRI) and Massachusetts Institute of Technology (MIT) to develop the RoboScooter, a foldable electric bike scheduled to be formally debut in the latter half of 2009.

Most Active in Taiwan

Meanwhile, the Ideal Group, a major bicycle producer in Taiwan, began partnering with Boston-headquartered Honeywell in March to jointly develop heavy-duty electric bikes. According to the group, the popularity of two-wheeled vehicles has expanded considerably-policemen patrol on electric bikes, factory workers deliver goods on electric bikes, and passengers with luggage also use them to travel through airports.

Being upbeat about the market outlook, the Ideal Group has engaged in more than 10 electric bike projects with various partners from either Taiwan or abroad. The CYCLEUROPE project involves a Swedish partner which is planning to present an electric bike as a gift to the King of Sweden in celebration of the country's 100th anniversary later this year.

As the most active electric bike producer in Taiwan, the Ideal Group sees steady growth in orders for its electric bikes and may see a doubling of its annual sales of such green bikes this year.

The Ideal Group observes Europe and China as currently the world's two largest markets of electric bikes, with orders from these two areas growing steadily over the past few years; while orders from European buyers during the first half of this year have surged partly thanks to the sharp appreciation of the euro.

Different Preferences

European buyers generally prefer bicycles with electric-power backup, which enables conventional pedaling on flat terrain but switching to motor drive as necessary. In contrast, buyers in China tend to order fully-electric bikes as a speedier alternative, with few Chinese wishing to pedal electric bikes.

The growing electric bike market is generating higher demand for batteries used on such vehicles. Welldone Company, a pioneer of battery energy for light electric vehicles (LEV) and scooters in Taiwan, tied up in late July with Japan's Toshiba to jointly develop the world's first lithium battery for electric bikes. The company has also worked on several other battery projects with Taiwan and foreign partners, aiming to build batteries for various electric bikes.

Bicycles Suggested

The popularity of traditional bicycles remain unchanged as it is still the greenest solution for personal mobility. Some EU (European Union) governments subsidize as incentive for people to purchase bicycles as their major daily commuter. Holland has long set up a pedal-and-park bike sharing system for urban commuters. The Parisian authorities have also purchased a thousand bicycles for free urban commuting in a similar setup: bikes are parked in popular spots city-wide so the public can easily share the vehicles.

Global warming and rising fuel prices are likely having positive impacts on global demand for bicycles-with Giant, Taiwan's leading bicycle producer, reporting sizably more orders this year. "Our production lines are fully booked this year, even during the second quarter, traditionally a low season," says Giant, which predicts that annual sales in 2008 could jump at least 30%.

Few can argue that bicycles may be the greenest personal transport, which burns no fossil fuel except stored calories, hence emitting zero pollution. Such timeless eco-friendly merits enable the bicycle to literally change the transportation landscape-an increasing number of cities worldwide have built special bicycle paths.

Merida, another major bicycle producer in Taiwan, is also seeing rapid growth in orders this year. "The world is just beginning to be lapped by the bike-crazy wave," says a senior executive at the company. "The length of this wave will stretch for at least 10 years," he adds. The executive also believes that the rising demand for bicycles is also driven by the global pursuit for recreation. For many people, especially in areas within proximity to nature, bicycles are not only commuters but also a relaxing way to explore outdoors.