5% tarif on bike imports - a disaster for Aus bike industry

[Duck!]

If you own a sufficiently large chuck of land you may ride your Stealth "bike" there, just as you can drive around an unregisterable "paddock-basher". You cannot legally ride a non-compliant bike in the public domain.

[Duck!]

I dont post much but i know the manufacturer of stealth bikes
I know how many people he employs
I say well done for the government to actually step in and protect a small

Australian Manufacturer of Electric Bicycles

(with a factory actually making things)

Regards

Stealth would present a much better case for themselves if they made products that complied with the applicable regulations.

I'm all for local industry, but they should at least be manufacturing a legal product before pushing for barriers against importers of other legal products.

[queequeg]

I dont post much but i know the manufacturer of stealth bikes
I know how many people he employs
I say well done for the government to actually step in and protect a small

Australian Manufacturer of Electric Bicycles

(with a factory actually making things)

Regards

Stealth would present a much better case for themselves if they made products that complied with the applicable regulations.

I'm all for local industry, but they should at least be manufacturing a legal product before pushing for barriers against importers of other legal products.

It's interesting too. While we focus on the e-bike concession, stealth also managed to get a tariff imposed for electric motorcycles. Again, none of their high power electric bikes meet the required ADRs for a motorcycle and can't be registered either.

Then, look at the prices that Stealth charges for these bikes, which can only be ridden on private property. They are not even remotely in the same market, for example, as someone who rides a more traditional e-bike around Sydney, such as these ones: https://veloaporter.com/2017/04/22/e-bi ... -of-a-few/

[CKinnard]

From what I have read about Stealth, most of their sales are exports.
I wonder how they'd feel about the US establishing a similar tariff.

[AUbicycles]

I dont post much but i know the manufacturer of stealth bikes
I know how many people he employs
I say well done for the government to actually step in and protect a small

Australian Manufacturer of Electric Bicycles

As the site admin for BNA, I will start by saying that I make an extra effort to support Australian business first and before overseas business. While I can't confirm that BNA get the same in return from established Australian cycling businesses, when it comes down to integrity, I feel that this is still the right approach.

Based on a number of articles I have read and also direct contact with authors and the Australian cycling trade body, Bicycle Industries Australia on this topic - I want to be fair but the information available suggests that it will not benefit Australian business on a whole... rather will be a disadvantage.

In the Stealth Bikes press release, they note that they use Political connections. Being well connected is not bad, but being connected and and using this to avoid a fair evaluation before legislation is not fair to all other Australians what is meant to be a democracy.

This leads to details and I highly recommend that you really look into the details. It appears that for a number of tarifs where Stealth does not directly compete, they have applied for the removal of the duty-free concession. So why is a business who has little or not business activity pushing for these changes which affect so many other businesses.

These businesses employee staff, they pay taxes and by the time the price increase gets to retail - I am guessing the 5% increase in import costs will result in a 10% increase in the sale value. A $3,000 ebike would then retail for $3,300. When the entire industry benefits from an increased consumer interest in cycling, stifling this also has an industry-wide effect.

Please don't ignore that a brand like Stealth is still heavily reliant on imports as well... the cost of labour means that many developed nation still get all of the parts and frames built overseas and take on an assembly role. If Stealth do indeed have their frames manufactured overseas, the wouldn't it be fair to then argue that they are also costing jobs and taxes by not manufacturing locally?

In summary, if the Australian government makes changes to the import regulations or duty to benefit a business that makes up about 1% of the total sale volume in Australia... is this justified when it then negatively impacts business for the other 99%

None the less, thank you for contributing and I certainly welcome further input if you feel that there are other angles or arguments in this topic which have not been considered and discussed.

Christopher

[Aussie Bruce]

Please don't ignore that a brand like Stealth is still heavily reliant on imports as well... the cost of labour means that many developed nation still get all of the parts and frames builty overseas and take on an assembly role. If Stealth do indeed have their frames manufactured overseas, the wouldn't it be fair to then argue that they are also costing jobs and taxes by not manufacturing locally?

Sorry mate fully laser cut and precision Tig welded in Springvale Vic

Regards Bruce

[warthog1]

Please don't ignore that a brand like Stealth is still heavily reliant on imports as well... the cost of labour means that many developed nation still get all of the parts and frames built overseas and take on an assembly role. If Stealth do indeed have their frames manufactured overseas, the wouldn't it be fair to then argue that they are also costing jobs and taxes by not manufacturing locally?

Sorry mate fully laser cut and precision Tig welded in Springvale Vic

Regards Bruce

I don't feel I should be forced to pay extra to support Stealth's bottom line.
What is even more galling is that what they produce is illegal to use in public space.

[Scintilla]

WHAT Aus bike industry??

[Scintilla]

I don't feel I should be forced to pay extra to support Stealth's bottom line.
What is even more galling is that what they produce is illegal to use in public space.

Yep. Agree 100%.

[uad782]

How do we look into the details and how do we get this decision reversed? Do we need to write to our MPs?

I too don’t want to support stealth’s bottom line.

[AUbicycles]

Highly commendable that Stealth can manufacture without any imported parts and components, this helps explain why they would have significantly higher costs.

I understand when a business like Stealth is proactive. It is also why a lot if businesses have pushed for the removal of the low value import threshold... fair enough. In this case however it was not only this duty free concession that they challenged and the implication is that it negatively impacts many other Australian businesses. When they are the single business who benefit but many other Australian businesses who are not even direct competitors are disadvantaged... then this is a very clear problem.

[AUbicycles]

Scintilla, total turnover in Australia from bike / cycling product and services sales is estimated at over $1 billion yearly though in recent reports, bike sales have dropped a little... and the value can only be guessed.

Bicyce Industries Australia is the trade body that represents brands / importers and there are about 1000 bike shops in Australia as well as a number of great Australian brands and innovators who are internationally successful, such as knog, cycliq, cycology gear, MAAP, baum to name a few that cone to mind.

Stealth has not generally been considered a ebike brand as these are usually understood to be pedelecs which are street legal. Higher powered electric bikes that may have a throttle are a new space and gave a closer connection to trailbikes.

[Jmuzz]

I wonder how they'd feel about the US establishing a similar tariff.

They can't due to FTA.
This also doesn't apply to our imports from FTA countries, most notably USA and China.

We don't have FTA with Taiwan and that is a major import location, so it does effect most brands being sold through retail stores.
Though they may find a way to shift production for some models into China. In some cases it might mean the Aus model is different to international models (China factory vs Taiwan).

It will hurt retail stores much more than the online direct China frames. So it's bad news for hundreds of retail staff already struggling vs online direct.

[queequeg]

For anyone who hasn't seen the press release, here is it is

https://www.stealthelectricbikes.com/a- ... nnovation/

I am just going to selectively pull out this little bit from the Press Release

In 2017, we released our first road legal pedelec commuter bicycle, the Stealth P-7 retailing from $6,990, great value for a bike of this caliber.

As with all Stealth products, our aim was to offer the P-7 at the lowest price to the market to allow equal competition with our foreign counterparts, but unfortunately the playing field in the Australian bicycle industry was a little unbalanced.

Yes, the only bike they sell, which is remotely considered anywhere near "Road Legal" will set you back $6,990. The P-7 is not even a Utility bike.

Compare the P-7 to these e-bikes

https://veloaporter.com/2017/04/22/e-bi ... -of-a-few/

Now tell me that Stealth is even in the same market. The P-7 is not designed as a utility bike, and at just under $7,000, it would be the last e-bike I would consider if I was going to buy one.

[AUbicycles]

queequeg, thank you for this - it is a new press release that shows a response from Stealth to the feedback from the Australian Cycling industry and communities.

To add some perspective, for an Australian company to export a product (such as an e-bike) into any EU bound country, the effect of local taxes and duties can add up to 29% to the original cost of the product. At a maximum rate of 10% GST + 5 % duties for products imported to Australia, consumers are let off lightly.

This is not about consumers.... in fact, that is absolute rubbish because it fails to account for the logistics, customs clearance and currency exchange fluctuations.

An Australian company who saves on all all of these is ahead. Of course, making it more expensive for competitors in the high end can improve competition but to claim that Australian consumers are let off lightly suggests that Australians are paying less for the same when in fact the retail prices in Australia for everyday ebikes are higher than in Europe.

Second, the Federal Government is set to receive around $50M revenue from this tax. Stealth understands one of the key objectives of the BIA is to promote the use of all bikes in Australia, to get people out of cars and onto bikes. One way to do this is to build better cycling infrastructure across country. Building infrastructure requires money which the government doesn’t have. With every cyclist making a small contribution, the benefits could be massive.

This would be on the condition that the Government invests in bike infrastructure. But if the state governments (and not the federal government) are responsible for transport and there is no direct connection between import duty income and a requirement to spend on bike infrastructure, this is not a valid argument.

Instead they should question the larger benefit to Australia in terms of employment, R&D, innovation and potential new infrastructure for all cyclists.

Instead of using scare tactics against Stealth, we invite the BIA to work with us, to ensure any funds raised from this new tariff are channeled into the promotion of cycling and infrastructure for all cyclists.

1.
Stealth is not a member of Bicycle Industries Australia... see the member list here.

2.
BIA have officially said that it is "disappointing" and have questioned the government process for approving and the effect on the industry.

3.
Stealth are claiming that "consumers are let off lightly" and are quoted as saying "Stealth are confident that the affected importers who have had their time in the sunshine care about their customers and will adjust their prices accordingly." I personally disagree when considering the higher comparative prices that Australian consumers pay. But in essence - it is not 'an eye for an eye' argument as it appears that Stealth are looking to be more competitive internationally if they are discussing unfair trade.

4.
For channeling funds, the role of BIA is to try and work with the government...maybe Stealth should have joined the BIA and started with this approach first... at least to understand the industry activity that has taken place and in unison to work on the approach. BIA has for example actively represented their members in the move to GST on low import threshold.

5.
Increased employment in Manufacturing and R&D.... this is possible. But is is also possible that Australian jobs are also lost in retail.


Overall, I find it good that they have responded but think that in the beginning that they hadn't considered the ramifications on others in the industry and the response from the industry and community. If they were directly competing against the bulk of the market, then it would be far easier to understand that it is about 'protecting' local business. But as it is not, I feel that the criticism is justified and this is a problem.

[queequeg]

queequeg, thank you for this - it is a new press release that shows a response from Stealth to the feedback from the Australian Cycling industry and communities.

I'll further add this extract from the press release

Yesterday the The Federal Department of Home Affairs approved Stealth Electric Bikes objection to the duty free import of Electric Power Assisted Bicycles into Australia.

The concession has been in place since 2010 and allowed foreign made Electric Bicycles to be brought into Australia duty free, providing an instant 5% discount to all importers. This may have taken the BIA by surprise but the objection was publicly published information.

Yes, it was published...

“But the plans were on display…”
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”

That about sums up how the information was "published".....basically in a weekly dump by the Department of Home Affairs, who don't exactly go out of their way to tell anyone or anything. Kind of like how politicians release bad news just before Christmas, hoping nobody will notice.

In any case, I do not see how the tariff will in any way direct business to Stealth. It will do that just as much as the duty raised will be spent on bicycle infrastructure. Even if I am importing a $3000 e-bike from Europe, it is still going to end up thousands of dollars cheaper than anything Stealth offers, and it will be far more useful.

More than that, it seems to highlight that there is no actual formal review or opportunity to object prior to a concession being removed or a tariff imposed. Since when does one manufacturer become an industry?

[Duck!]

3.
Stealth are claiming that "consumers are let off lightly" and are quoted as saying "Stealth are confident that the affected importers who have had their time in the sunshine care about their customers and will adjust their prices accordingly." I personally disagree when considering the higher comparative prices that Australian consumers pay. But in essence - it is not 'an eye for an eye' argument as it appears that Stealth are looking to be more competitive internationally if they are discussing unfair trade.

Stealth have done absolutely nothing to promote or even assist the acceptance of e-bikes in the Australian market, and perhaps inadvertantly, by their manufacture and promotion of illegal products, turned a sizeable proportion of the potential market away from legal e-bikes. If you really want to get a feel for the vibe around e-bikes in the MTB context, just jump over to the Rotorburn forum & search "e-bike"; you'll have hours or even days of reading in front of you......

Most commenters there see e-bikes as unregistered (and unregisterable) motorbikes - which is exactly what Stealth's products are, and should not under any circumstances be within cooee of any MTB trail network. Unfortunately for the manufacturers and importers of legitimate e-bikes, Stealth have caused a strong resistance to ALL e-bikes, which ultimately helps no one in the e-bike sector.

[Duck!]

WHAT Aus bike industry??

Would you be referring specifically to the manufacturing aspect, or everything bike?

You'd be wrong, to varying degrees on both fronts. While it is true that Australia does not have a mass-market bike manufacturing industry (which would in any case be almost entirely frames, with components sourced elsewhere), it is not by any stretch extinct, with a considerable number of boutique manufacturers spread around the place. Extending the parameters, there are quite a lot of bik accessories manufactured in Australia.

[Farmer Elvis]

These tariffs are becoming a problem, governments making ill informed short sighted decisions, at least this one is only 5%. As a farmer and chickpea grower we have just been hit with a 60% tariff on peas to India, India import almost all the chickpeas grown in Aus, try to run a business under those conditions!

[MichaelB]

Saw another one of the Stealth e-bikes (use that term loosely) barrelling down a suburban street and well over the 25km/hr limit, so no way was it a P7 model.


Oh, and $50M towards cycling infrastructure Aus wide - yeah, that'll make a difference ....

[redned]

Ignoring all these comments on tariffs and E-bikes, I was pleased to read that Mr Tequestra (in his first email on this thread) may have been the person that actually built my Indi 500 in the early 80s.

[AUbicycles]

$50 million income from tarifs (at 5%) would mean that Stealth are estimating ebike sales at $1000 million... $1 billion! So if the total Australian cycling industry including bike sales and services (e.g. bike events and insurance) is estimated at $1 billion... where does this new $1 billion in ebike sales come from.

Let's get some maths and do an generous average of $4000 per bike with a $1 billion total market value, that would be 250,000 ebikes sold in Australia. In 2017 the number of bicycles sold were 1,1774,784* so the number of ebikes sold would be 1/5. This however conflicts with known import and sales data.

The biggest ebike motor brand, Bosch reported 15,000 sales in Australia last year. Even considering the brands with fewer sales like Shimano, Panasonic, Yamaha, Brose and Bafang - I struggle to get anywhere near the 250,000 in sales.

For arguments sake, lets use a generously high sale volume of 50,000 and using the $4,000 generous average, this is $200 million - 5% of that is $10 million. But wait... we are talking retail price and the 5% duty is on the wholesale import cost so that actual revenue is far less...

It doesn't add up.

But neither does a suggestion that federal government import revenue can be redirected to road infrastructure...



*Source BIA / Australian Bureau of Statistics.

[queequeg]

$50 million income from tarifs (at 5%) would mean that Stealth are estimating ebike sales at $1000 million... $1 billion! So if the total Australian cycling industry including bike sales and services (e.g. bike events and insurance) is estimated at $1 billion... where does this new $1 billion in ebike sales come from.

Stealth must have used the same person who costed the benefits of replacing the ANZ Stadium, also claiming to bring an extra billion a year.

Personally, I am not seeing it. If Stealth is selling their P-7 "from $6,990", I don't think they are going to be having a huge rush of people lining up to buy them just because they have managed to get a 5% tariff slapped on everyone else.

[AUbicycles]

Maybe they have seen that the local market for road legal ebikes is slowly growing (from the efforts of local business and investment of overseas business) but they weren't getting the rub-off that they assumed would come.

There is no financial benefit for them by making non-competing products more expensive to consumers and this doesn't help them financially when exporting and being faced with levies in foreign companies. Other strategies are needed for that.

A lot of things aren't added up so I think there is missing information or maybe a misunderstanding on the cause and effect.

[fat and old]

Maybe they have seen that the local market for road legal ebikes is slowly growing (from the efforts of local business and investment of overseas business) but they weren't getting the rub-off that they assumed would come.

There is no financial benefit for them by making non-competing products more expensive to consumers and this doesn't help them financially when exporting and being faced with levies in foreign companies. Other strategies are needed for that.

A lot of things aren't added up so I think there is missing information or maybe a misunderstanding on the cause and effect.

I think so. As said earlier, I think maybe somebody upset them big time. Mayhaps they're planning on bringing a new product to market?