In the Bikap camp in Anadia, in the center of Portugal, everything smells new. Just a few weeks ago, the brand new assembly line for electric bicycles was put into operation, which was released with an order from Spain. It is the latest company in the region to join a burgeoning industry that has made Portugal the enduring leader in bicycle production in the European Union in recent years, according to Eurostat data. If it topped the classification with 2.7 million in 2019, production rose to 2.9 million in 2021, most of it for export. Spain, which ranks sixth, is not even among the countries that produce more than a million units a year, which include Romania (2.5 million), Italy (1.9 million), Germany (1.4 million) and Poland (1,2). .
The Portuguese paradox is that they are big producers and small customers. Or they were. “The car was the king of mobility in Portugal and the urban space has adapted to it. It’s only recently that people have started integrating other means of transport, but for years the desire has been to have a car,” says Paulo Monteiro, one of Bikap’s nine founding partners and CEO of the company. “There was no promotion of bicycles as a means of transport, in addition to the fact that Portuguese cities have difficult terrain, but with current incentives such as the creation of exclusive roads and the advent of electric bicycles, this is gradually being overcome,” reflects Sérgio Rodrigues, another partners of the company. The “click,” he says, came with the pandemic, which changed opinions the way climate catastrophe changes politics.
A measure that could be instrumental in stimulating domestic appetites comes into effect on January 1st. From that day, the sale of bicycles will be subject to a reduced VAT of 6% compared to the current 23%, following the acceptance of a proposal presented in the Assembly of the Republic by the only Livre MP Rui Tavares for inclusion in state budgets for 2023. “It is not enough that Portugal wants to be at the forefront of developed countries in terms of reducing fossil fuel consumption, public health or mobility in public spaces. Action is necessary to move us forward, and cutting VAT is a modest but essential step to achieve that,” defended the Livre in its proposal, supported by all political groups except the Socialist Party (centre-right) and Chega ( ultra-right) supported ), from which they abstained.
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Portugal joins other countries such as Belgium, which have taken advantage of the European Commission’s change in tax criteria, which recommended in late 2021 that repairs, rental and sales of bicycles (conventional and electric) be subject to reduced VAT. A path not taken by Spain: the government recently refused to introduce this tax cut, irritating the sector. Spanish manufacturers are concerned: “Portugal has complied with the European agreement to reduce VAT on bicycles, but Spain has not. When applied, buying an electric bike in Portugal means an average saving of 360 euros, with a huge impact on shops, brands and manufacturing companies in Spain, as well as a loss of income for the Treasury,” laments Jesús Freire, General Secretary of the Spanish Brands and Bicycles Association (AMBE) , informed Miguel Angel Medina. “For this reason, we have asked the Minister of Finance, María Jesús Montero, to take urgent action to reduce the VAT on bicycles from 21% to 10% in the decree, to help families in these moments of crisis and inflation,” they continue .
Although Portuguese domestic demand has been growing since the pandemic, the country’s bicycle industry took shape years ago, when there was little interest in a vehicle associated with the poverty of the dictatorship. That forced her to look outside. “The great virtue of this region was to create the conditions for the industry with an export vision. Our national market is not able to sustain this,” points out Paulo Monteiro, who has been in the sector since 2004 when he became Director General of Abimota (National Association of Two-wheeled, Iron, Furniture and Allied Industries). “In the past, metal was processed in this area, structures, bicycles, motorcycles, locks were manufactured, and in the rest of the region there is knowledge of moulds, plastics, electric motors, batteries or software, very useful skills for the metal market. sustainable mobility,” he recalls.
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Academic support from the Universities of Coimbra, Porto and Aveiro, which, in a study, have identified the existence of a sustainable mobility market in Europe, has strengthened the Portuguese cluster, which according to the current President of Abimota, Gil Nadais, thanks “to their ability to innovate and problem solving. In other words, Sérgio Rodrigues underlines it: “That we have to do a lot with little that we have carried on from the dictatorship. Many local companies have reinvented themselves from their experience with metal.” In 2011, the international promotion kicked off with the announcement that multinational Decathlon had commissioned a company in Braga to produce 1.5 million metal frames for Btwin bikes. A decade later there were two Portuguese companies that made bikes exclusively for the French brand.
A sector without moving
The Portuguese industry used the cycling tradition of Central and Northern Europe to take off. Furthermore, they fought alongside the rest of the European industry to protect themselves against Chinese competition and they won. “We’re one of the few industries that hasn’t suffered relocation to Asian countries, and we’ve also managed to prove dumping [competencia desleal] China, which is not only economic, but also political, environmental and social,” notes Monteiro. Since 2019, Brussels has imposed “a definitive anti-dumping duty” (a kind of surcharge) on imports of bicycles originating in China and other Asian countries. “The investigation revealed that imports from China were made at dumped prices during the investigation period,” states the Community regulation authorizing the application of the measure.
In the European strategy, the bicycle is no longer just a leisure or sporting product. Conventional or electric have become an essential pillar to push cars off the roads, thereby improving air quality and driving decarbonization. A favorable scenario for the Bikap project, which will specialize in the assembly of electric bicycles – its goal is 50,000 units per year – and which wants to design its own model in the future. The company was also born with a commitment to sustainability and will be the first in the industry to produce carbon neutral. “By starting from scratch, we can afford to take all processes to reduce our environmental impact, from the energy we use that comes from renewable sources to the type of solvents, everything is geared towards reducing our CO2 – to reduce our footprint,” says Sérgio Rodrigues. , a mechanical engineer who in the past led an Uber project assembling electric bikes for Europe.
“In times of crisis,” concludes Paulo Monteiro, “there may be a decline in leisure or sports products, but not in mobility. There are currently 300 European cities that want to change their mobility behaviour. In this market, our product can be sustained.” The data supports the trend. While sales of Portuguese electric bikes accounted for 20% of those exported in 2019, in 2021 it already reached 35%. One of the few industries to benefit from the pandemic catastrophe and climate emergency.
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