Dirt: How do you think the vote to leave the EU will affect your business in both the short and long term? Have you already seen changes?
“The morning after the vote we had several European dealers immediately asking what would be changing as a result of the vote. They thought that the UK would be out of the EU on the Friday morning. Their fears were allayed once we told them it would be at least two years before anything significant changes took place and would probably be longer. We don’t envisage any changes to our business in the short term, but the long term will depend on the trade deals that are negotiated with each country.” Alan Weatherill, Hope Technology
“As a business we were firmly in favour of remain, but we are where we are. Short term the most likely possible impact is price increases as the GBP has weakened to a 31 year low against the USD and other currencies. The timing couldn’t be worse from a 2017 model year bike pricing perspective for most brands. 2016 is going to prove to be a superb value for money year. Grab a bargain now as it is hard not to believe that prices will only be going up for next year. Other than that it is all about consumer confidence. The current political climate is not conducive to consumer spending but we will have to wait and see how things settle. It is too early to tell right now.” Dom Langan CEO at Madison
“With the Pound becoming so weak we will ultimately see prices rise. We purchase our products in dollars and have been hit pretty hard. Long term if the pound recovers then that would be nice? Until the exit plan has been made it’s hard to predict. We are kind of expecting further issues down the road.” Olly Wilkins, DMR Brand Manager
“As a venue that received considerable EU grant funding during our initial build phase we clearly owe a lot to the EU. Without that initial seed funding BikePark Wales would not have happened. Although we no longer receive any grant funding and BPW is a private limited company we have clearly benefitted from the EU in the past. As for future impact on our business, well further EU funding for expansion is clearly no longer an option and how about foreign visitors, we are lucky enough to receive visitors from all over Europe (and the world) lets hope that freedom of movement isn’t affected.” Martin Astley, Director BikePark Wales (BPW)
“Short term the effects are immediate with regards to pricing. We manufacture, finish and assemble in the UK so we’re better placed to deal with the short term effects of the current market conditions. However, mid to long term instability wouldn’t be good for any business and we are no exception. We also import a lot of other components from all over the world that we predominantly pay for in US$ which is having an immediate effect. The last lot of dollars we bought was at a rate of $1.49. As of today (Weds June 29th) the rate is $1.34, so already there’s a 10% differential. This means that inevitably prices are going to rise. How long for? We’ll have to keep a close eye on that and if things stabilise we can re-adjust.
Long term, we need to see what trade deals can be negotiated with Europe. Last time I looked, to import a bike into Switzerland for example costs just CHF12 (about £9). To import a bike into any other EU member country is £0 with the current free trade agreement. Bicycles and any other ‘green’ vehicles I think will have a pretty low duty rate so I think we’ll be fairly safe on that front. It will probably involve a bit more paperwork but nothing more than what we do when exporting a bike to the USA or Australia for example.” Jay Tolan, General Manager Orange Bikes
“This is where the impact has really been felt already, as a distributor of goods (importer) we are at the mercy of the markets for exchange rates and free trade. We currently distribute goods from European and American brands, the fall in the pound could have profound effects on the costs of our goods, as the pound falls sharply against the dollar in particular, if that is sustained, price rises may be inevitable. The fall against the euro hasn’t been as significant but will likely still have an impact. Freedom of trade is a big deal for us, we can buy and move goods from our European brand partners such as Sidi and Castelli easily right now but who knows what trade agreements will be in place for the future. Will we be able to negotiate trade deals with the U.S that offer similar tariffs to those we enjoy now? Time will tell.” Martin Astley, UK Brand Manager for Intense Cycles
“We have already been seriously affected, the plummeting value of the sterling has meant losses to us and higher prices to our customers, and I cannot see it improving in the short to medium term, especially with the uncertainty that is surrounding us at present and the long period it will take to exit the EU. Uncertainty is very, very bad for business, and in the long term who knows, it could be worse, or it could be better, but probably no change. I can just see a few years of pain and end up in exactly the same place we are now.” Ady Nash, Riviera Bike biking holidays (based in Italy)
