Thursday 24 March 2022

The challenge of declining bicycle sales in the world's leading cycling nation

A few days ago I quote tweeted this graph from Datagraver on twitter with a comment that "Sadly, cycling is dying in the Netherlands." The responses to this tweet were largely defensive and many people clearly didn't understand what I meant, so let's look deeper at the bicycle market in the Netherlands and consider what the consequences could be for cycling in this country with lower bicycle sales.

Shrinking sales don't mean an instant reduction in the bicycle fleet. This drop in bicycle sales is a leading indicator of a problem which will become apparent in the next few years.

How many bicycles are there in the Netherlands

The total number of bicycles in the Netherlands is currently reported to be about 23 million. That's about 1.3 bikes per person. This figure is of course pushed upward by all the people who own many bicycles, including pretty much everyone who I know, and pulled downward by people with no bicycle at all.

There are actually quite a lot of people who don't have a bicycle in the Netherlands, about a fifth of the population in total. People without bikes include babies too young to cycle, some people with disabilities and some older people who can no longer ride a bike or trike. There are also people even in this country who do not cycle by choice. In addition there's inequality in our society just like that of other countries and for some people the price even of a second hand bicycle is a barrier. A nationwide scheme tackles this to some extent by providing free of charge donated bikes to children.

The sales decline and the pandemic's effect on sales

You'll note from the graph that sales of conventional bicycles have declined to about a quarter of the level which they had 20 years ago, while sales volume of electric bicycles have grown from more or less nothing to a figure which slightly exceeded conventional bicycle sales in last year's sales figures. Those two trends are obvious without concerning ourselves with the two pandemic years, 2020 and 2021.

Both 2020 and 2021 were unusual because of the pandemic. Bicycle shops in 2020 were reporting record sales because of lockdown cycling, while in 2021 they were complaining about not being able to get stock because of supply chain issues.

In the year 2000 around 1.5 M bicycles were sold to a population of 16.3 M people. By 2021 only around 445000 bicycles were sold to a slightly higher population of 17.1 M. We've gone from one  bicycle sale per 11 people to around one bike per 39 people. i.e. Sales have reduced to a quarter of their previous level. Of course, e-bike sales have increased and if we include the e-bikes in the sales figures that makes a combined total of 923000 bikes sold in 2021, or one per 19 people. That's still a halving of the total number of bikes sold per person per year.

The average price of a new bicycle

As I reported before, the Dutch spend more on average on a new bicycle than people of other countries and this has increased rapidly. The average price paid for a new bicycle in 2008 was €603 but last year's average price was €1627 (vs. about 800 pounds in the UK and about $700 in the USA). There's a simple reason why Dutch people are willing to spend more: Because they use bikes more than those who live in other countries they spend more on their bicycles with the expectation of getting plenty of use from them.

The average bicycle price has increased faster in recent years because of the switch from normal bicycles to e-bikes. Bike shops have been perfectly happy with this outcome because the decrease in sales volumes is more than masked by a higher profit margin due to the increase in the average value of a sale. If you've ever wondered why so many bicycle manufacturers and dealerships in the early twentieth century became motorcycle or car manufacturers and dealerships by half way through the 20th century, there's the answer. They too found that they could make higher profits by selling motorized vehicles at a higher price. Cycling declined while few people took much notice of what was happening.

But there's an issue with this. Not everyone can afford to buy a new bike, especially at the average price paid for a bicycle in this country.

Second and third hand non-electric bikes provide the backbone of the bicycle fleet.

Many second hand bicycle sales are made by bicycle shops which take trade-ins of people's older bikes when they buy a new bicycle. Sales to third and later users are largely private. The value of a bicycle drops as it ages and each time it is sold to a new owner a bicycle typically also passes to a different demographic.

Even in the year 2000 with about 1.5 M bikes being sold each year, bikes of up to five years old made up only a third of the total fleet in use. i.e. two thirds of the population were riding bicycles which were over five years old, well out of guarantee and possibly on their third owner.

Bicycles sold in 2000 were on average used for about about 14 years. That was not a maximum age, but an average. Obviously some bikes are scrapped earlier for various reasons and others last far longer. This is a simple calculation: 14 years had to be the average life expectancy for a new bicycle in 2000 because with sales of 1.5 million bicycles a year and a bicycle population of around 21 million we were replacing about 1/14th of the bicycle fleet every year.

In 2021 with around 1 M bikes sold per year (normal bikes and e-bikes combined) and a total bicycle population of 23 M we now need our bicycles to last on average 23 years just to maintain the current fleet size. Unfortunately the type of bicycle being sold makes this difficult if not impossible. Half the bicycles being sold now are e-bikes and e-bikes are not practical for a second or third owner to maintain when they are over 5 years of age. 

While bicycles built of standard parts can be maintained more or less forever, manufacturers often no longer sell unusual and specialized parts of bikes after a few years, and this is especially problematic with e-bikes because even when they are available the price of batteries, controllers (the electronic parts between battery and motor including the display), motors and other expensive parts is often too high for a second or third owner and there is usually no cheaper substitute alternative available. Sometimes a second hand part can be used, but then you're stripping one bike to keep another going. New buyers are covered by a warranty but no warranty claim can be made by second or third owners so they have to cover the full cost of any repair and these parts often add up to cost more than the second hand value of an older e-bike. Because of this problem, we can expect that though e-bikes currently sell at a rate of half a million per year their shorter lifespans mean that they will only ever be able to contribute about three million bikes to the total fleet while the rest of the fleet will eventually have to be made up from the other half million normal bikes which were sold in the same year. But that unfortunately means that maintaining the current fleet level of 23 M bikes requires that normal bikes must have an unrealistically long average lifespan of around 40 years.

Lower sales mean a slowly reducing number of available bicycles

Shrinking sales and the type of bicycle being bought by customers of new bicycles will both affect the availability of usable second and third hand bicycles in the future. It will take a few years for this to be obvious because only a small proportion of the fleet is replaced each year and if they can't find what they wanted, most people can just hold onto a bicycle for a bit longer. But this will mean that the availability of rideable bicycles decreases over subsequent years.

The effect of e-bikes on the Dutch population

While in other countries the e-bike is often perceived a transport mode which is preferable to a car, it's quite clear that in the Netherlands with our rapidly growing car ownership and usage and plummeting sales of normal bicycles, that e-bikes are being used in place of human powered bicycles.

The reported distance cycled per year by an average Dutch person has remained constant for decades at just under 900 km per year, which is under a fifth of the distance that we would all have to cycle in order to exercise enough to maintain good health by riding bikes alone. Substituting e-bike kms for human powered kms only means that the Dutch population gets less exercise. A particularly worrying trend is the uptake in e-bikes amongst the young. It's now not at all unusual to see school children who barely turn the pedals by themselves at all on their way to school and back, reducing the potential for cycling to establish a good exercise habit from a young age.

There is also then a problem that these e-bikes are more expensive and less durable, which makes cycling a lot less democratic than it used to be. Parents who once struggled to provide a bicycle for their child are now under pressure to provide an e-bike instead.

Complacency doesn't solve any problem

Unfortunately these concerns are not being discussed, but are instead being swept under the carpet.

Cycling is a fragile mode of transport which if it is to continue at a relatively high rate, as is still fortunately the case currently in the Netherlands, will need protecting against competition from motor vehicles of all sizes including the small electric vehicles with which some people are currently enamoured.

There is much to lose and we're doing little to protect cycling against the threats that it faces. You can see this even with the current response to rising fuel prices due to the Russian attack on Ukraine. Our government immediately announced huge decreases in taxation for motorists, which ensure that driving remains competitive even as it boosts trade with an aggressive nation and continues to fuel the climate crisis, while they've done nothing at all to encourage people out of their cars, and in particular they've not encouraged people to ride a bicycle instead of driving which would be the most effective way to do some good to solve both those problems.

If we don't want cycling to decline in the Netherlands then we need to invest more in it. The main thing that the Netherlands needs now is wider, smoother, cycle-paths which take more direct routes and improve the competitiveness of cycling with other transport modes.

Things that don't explain the drop in bicycle sales

People in the twitter thread repeatedly made the following suggestions to try to explain the decline in cycle sales and it's probably worth repeating here why none of them explain the decline in sales:

It's not the annoying shared mopeds which litter
the sidewalks while waiting for someone to drive
a car to them and swap the battery either. There
have long been a small number of mopeds in NL
The decline in sales is not explained by SwapFiets, a company which provides a hire service to about 150000 cyclists or roughly 1% of the total fleet. I see it as an expensive way to ride a cheap bike but some people clearly do like their service and that's fine, but the numbers just are not there to explain a decline in bicycle sales.

It's not explained by the popularity of OV-Fiets as while that system is one of the largest bike share systems in the world it has only about 20000 bicycles, or about 0.1% of the total fleet. To an even greater extent than with SwapFiets, the numbers are far too low to make an appreciable difference.

It's also not explained by a reduction in theft. The rate of theft has dropped a little over the last twenty years, but this never really had much of an effect on the fleet size and a reduction in theft doesn't affect this either. Around half a million bicycles are reportedly stolen each year in the Netherlands. A lot of bikes, but a small fraction of the fleet size. Some stolen bicycles are vandalized and become unusable but the majority are either kept by the thief or sold to someone else who continues to ride them, so theft doesn't actually take many bicycles out of the fleet.

It's not explained by cycles becoming more durable. Actually, the opposite has happened. 50 year old steel framed bicycles with standard parts can still be repaired with inexpensive parts but the move to more exotic frame materials, more complex gear and braking systems made maintenance more difficult, and electric assist then had an even greater effect making many modern bicycles far less durable and less economical to keep in service. When people ask me if I can provide replacement batteries, controllers and motors for older (5 year +) e-bikes it's almost always the case that they are either no longer available at all or that if they are available then they're are far too expensive compared with the residual value of the bike. A replacement battery at €550 (that's the retail price of the only battery that is available today from one of our suppliers, which fits only a small minority of e-bikes) costs €100 more than the average price paid for a relatively new and expensive second hand bike bought from a bicycle shop, let alone the price of an average older bike sold privately. So while simple repairs to e-bikes are possible, more complex ones can't be justified. This is what leads to e-bikes being scrapped after quite short useful lives.

It's not explained by market saturation either. While enthusiasts can keep traditionally built bicycles in operation for decades while spending very little to do so, the general public does not do this. There's no sentimentality. If the bike is now worth less than the parts and labour for repair then the bicycle is usually scrapped. In the Netherlands, as explained above, bicycles last on average around 14 years before they need a repair which is too expensive and that's why sales of 1.5 million bicycles a year are necessary in order to maintain a static fleet size.

Update April 2024
Unfortunately, given two years of extra data, we can see that bicycle sales continue to decline, with sales having dropped by about a third since two years ago, to about a fifth of the level required to maintain the required static bicycle fleet size for mass cycling in the Netherlands.

At this point, with this low level of sales, we would need each new bicycle sold to last for sixty year on average just to maintain the fleet size, and that's completely unrealistic. Bicycles never had anything like that long an average lifespan, and modern bicycles, with more complex gearing, suspension forks and frames not made of steel, do not last as long as the simpler designs which made up most sales 40 years ago.

As a result, the pool of usable (mostly second hand) bicycles is now shrinking. As the average age of remaining bicycles gets older and they become un-repairable, there are fewer newer ones available to replace them. This results in shrinkage of the bicycle fleet and will inevitably mean that people cannot cycle so much as they used to. This is tragic for very many reasons.

If you need parts for a traditionally built bicycle then you're in luck. If you need parts for an unusual bicycle or to convert a less practical machine to be better for everyday use I can probably also help you. If you're looking for parts for an e-bike I certainly will help you if I can, but it may not be possible to find what you need. Please do ask, though.