Daily News Digest

by Mark Zalewski

June 28, 2016

In today’s CT Daily News Digest: Hidden motors: 3-4000 UCI tests at Tour, but French announce own plans; MPCC stands with fight against technological fraud; Dan Martin: Ready to take on the big guns in the Tour de France; King may appeal Olympics snub; Orica-GreenEdge for the Tour de France; Trek-Segafredo Tour de France team; Cannondale Pro Cycling Tour de France roster; Former British Olympian dies in cycling crash; Seven WorldTour teams for Revolution Series; Study finds Tour de Yorkshire boosted economy by £60m; Crash determines Canadian men’s road championship; Focus on Marianne Vos

Bikes and Brexit: What does the UK’s departure from the EU mean for cycling?

by Cam Whiting

Enough ‘Brexit’ news, it’s time for the Tour! But wait, could the UK’s departure from the European Union affect the cycling industry — and, in turn, such things as the Tour de France?

Understanding ‘Brexit’ as a whole is a challenge, so breaking it down and looking at it through the lens of the cycling industry provides a unique (and digestible) analysis.

Here is an excerpt:

We’ve already seen the first tangible result of Brexit – extreme volatility in the markets. As the referendum result began to emerge, the British Pound took a haircut as investors dumped GBP and fled to safer environs. It has since rebounded slightly against major currencies like the Japanese Yen (JPY) and US dollar (USD), but for how long remains to be seen.

If the Pound remains weak against the JPY and USD, this will inevitably have a knock-on effect on the price of bicycle imports, which are generally purchased from factories in USD. Even if UK importers have USD forward cover (i.e. they have contracts in place for USD at a better, pre-determined exchange rate) – this can only delay inevitable price increases if the Pound’s relationship to other major currencies doesn’t improve.

Assuming the economic fallout of a Brexit also continues to be amorphous in the months (and perhaps years) ahead, broader economic uncertainty may also be a drag on consumer sentiment, translating to a fall in demand for non-essential goods – like a new bicycle, or even a new bicycle accessory.

In this environment, it can be expected that bicycle orders (MY2017 production is currently in full swing) are already being trimmed, or even cancelled altogether. Note this is far easier for a subsidiary (e.g. Giant UK) to do than an independent distributor, who might still be forced to accept their full order. In any case, it’s certainly too late to toggle specification (e.g. swapping out Shimano brakes for Tektro) in an attempt to reduce retail prices; this option will only become available for MY2018 bike models, the planning for which is already well underway.

Click through to read more at CyclingTips.

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