Rising petrol prices, along with growing interest in environmental issues and the popularity of cycling as a recreation activity, has underpinned a worldwide surge in bicycle demand. Bicycle sales in European Union nations, which buy 70% of the world’s bikes, according to Bike Europe website, have increased by 14.6% over the past 5 years. Sales in the US have increased by 9% in the same period.

Offsetting this advantage are the price hikes in other materials, especially in rubber and metals such as steel, aluminium and chrome, which eat in to margins and push prices up. Major Taiwan based manufacturer, Giant, which produced 5.5 million bikes in 2007, is expected to have a 10% increase in sales this year. Rival company, Merida Industry, forecasts revenue will rise 5 – 10% this year over 2007, but with flat profit result due to the rising material costs. Growing demand for battery powered bikes in China has been a major contributor to increased sales for these companies.