Bicycle makers hope for end of anti-dumping duty

Many domestic and foreign bicycle producers in Vietnam are praying that the European Commission (EC) will reconsider its decision to impose anti-dumping duty on bicycles imported from the country so that they can increase production and expand their businesses.

“We can only begin to invest more when the EC removes its anti-dumping duty on our products. If the tariff remains, our company will find it hard to keep doing business in Vietnam ,” said Ngo Vinh Hung, the Director of the wholly Taiwanese-invested High Ride Bicycle Company.

Hung said that before the EC applied the anti-dumping duty to bicycles imported from Vietnam in 2005, the company was exporting 500,000 bicycles to the European Union (EU) market every year, earning an average of 2.5 million USD. But since then, the number of bikes the company exports to the market has dropped sharply due to the high anti-dumping duty.

The company has also been forced to cut its workforce from 500 workers to 50 and is not able to operate at full capacity, so it mainly produces spare parts for other businesses in the country.

Asama Yuh Jiun, another wholly Taiwanese-invested company, is facing similar challenges as its exports have come to a standstill, even though before 2005 it had exported almost 200,000 bicycles annually, primarily to the EU and Japan . Currently, 60 percent of its workers are facing redundancy.

Like their foreign counterparts, more than 30 other domestic bicycle makers including the Thong Nhat, Xuan Hoa, Viet Long and Sai Gon companies, are struggling to cope with the financial hardships resulting from the EC’s anti-dumping duty.

Le Quoc Tao, the head of Vietnam ’s Automobile, Motorcycle and Bicycle Association’s Office, said that these four companies have recently been exporting components instead of the finished product to the EU.

They have also made a lot of efforts to expand their export markets to other Asian countries and South America , Tao added.

Fearing the impacts on the European bicycle industry, the EC decided to levy an anti-dumping duty of 34 percent on bikes imported from Vietnam from July 14, 2005.

For the past five years, the Vietnamese bicycle industry’s output has dropped from 2 million units to just 200,000 a year.

The anti-dumping duty has also forced the Vietnamese bicycle industry to cut its workforce to just 5,000 this year, from a previous 210,000 in 2005.

The EC’s anti-dumping tariff on Vietnamese bicycles expires on July 15 this year. However, the EC may review the duty at the request of the European Bicycle Manufacturers’ Association (EBMA), which is seeking an extension of anti-dumping duties on Vietnamese and Chinese bikes for another five years.

Tags: Vietnam Bicycle makers