The bicycle supplier Technibike GmbH has decided to abandon its production facility in Stassfurt, Germany, and relocate to Eastern Europe.
In recent years, the uncertainty of long transportation chains has led businesses to consider production sites closer to their markets. More and more bicycle companies are opting to manufacture in Europe to be closer to their consumer markets. Production facilities near consumer markets are favored due to reduced transportation costs and shorter distances, which lead to faster market responsiveness and lower communication costs. The demand for stable supply chains has driven continued investment in European production by companies, and Eastern Europe has become a preferred production base for bicycle manufacturers. Lithuania, Poland, and Romania have all attracted new investments from bicycle manufacturers. Moreover, Germany, France, and Portugal are also striving to strengthen bicycle production labeled as “European-made.”
However, Technibike GmbH’s decision to abandon its production base in Germany and move to Bulgaria in Eastern Europe highlights the downsides of the European production environment.
Technike stated that the production conditions in Germany had significantly deteriorated, especially in the years following the COVID-19 pandemic. Compared to other European countries, energy costs for businesses were nearly three times higher in Germany, and they faced a significant increase in labor costs. This made it impossible for them to compete on price. Under the pressure of substantial costs, the company had to seek cost-saving production methods.
Technike mentioned that it had become increasingly difficult to expand its production scale at the Stassfurt factory near Magdeburg. Apart from the challenge of finding suitable skilled personnel, there were numerous bureaucratic obstacles related to regulations and laws that required significant administrative efforts.
Eiffel Tower Company stated, “While large multinational corporations receive generous exemptions, subsidies, and grants when establishing production bases in Germany, it has become increasingly difficult for medium-sized enterprises to carve out a niche in the market with production facilities in Germany.”
The production facilities in Germany are scheduled to close in early August, including the manufacturing area. However, logistics and services will be retained to ensure that dealers can quickly order spare parts and services. Technibike will expand its collaboration with a well-known production partner in Eastern Europe specializing in high-quality electric bicycles, enhancing delivery reliability and product quality.