Indalo was right to question why Germany with its high labour rates can build bikes but we can't any longer in the UK,excepting specialist niche products.
One of the big problems in the UK are our business rates. When I started in business some 40 years ago, rates were always considered 30% of rents but now in many cases the rates bill is greater than rent.If you look on the news section of the Sunday Times,page 9 'squeezed stores quit high street'-it gives an example of a 2000 sq ft unit (say 50ft x 40ft,thats not big) with a rates bill of £160,000,the American owners have same size units in Germany with a rates bill of £10,000,they ask 'what do you get for your £160,000',the honest answer is nothing.
To survive in the high street now you need to buy product for pennies and sell it for tens of pounds(that means Asia),only the big multies have the buying power to generate those kind of margins,the small independent with a 50% mark up is wasting his time.
I go to Memmingen in Bavaria for the Eurobike show,its a beautiful bouyant town with lots of well stocked individual shops that are able to offer top quality product for fair prices,those shops would never survive in the UK.
Similarly I have a customer in Germany who has a warehouse similar size to mine but his rates bill is 10% of mine,he was given the land by the local council on a peppercorn rent.
The reason why all of the big german bike manufacturers have moved into e-bikes is that they have been given cash incentives to do so from the german government under the auspices of 'green' targets.
The reason our councils need these big rates is to fund their pension schemes which represent a massive hole in their budgets,as shops are going bust they put up the rates to the remainder,the law of diminishing returns!
We could make bikes in the UK again together with lots of other products and we could get the UK building again by one simple move-give rates relief for next 10 years only on new build commercial units, at the moment you would have to be the village idiot to make any investment in the UK.
Dave
Kudoscycles
One of the big problems in the UK are our business rates. When I started in business some 40 years ago, rates were always considered 30% of rents but now in many cases the rates bill is greater than rent.If you look on the news section of the Sunday Times,page 9 'squeezed stores quit high street'-it gives an example of a 2000 sq ft unit (say 50ft x 40ft,thats not big) with a rates bill of £160,000,the American owners have same size units in Germany with a rates bill of £10,000,they ask 'what do you get for your £160,000',the honest answer is nothing.
To survive in the high street now you need to buy product for pennies and sell it for tens of pounds(that means Asia),only the big multies have the buying power to generate those kind of margins,the small independent with a 50% mark up is wasting his time.
I go to Memmingen in Bavaria for the Eurobike show,its a beautiful bouyant town with lots of well stocked individual shops that are able to offer top quality product for fair prices,those shops would never survive in the UK.
Similarly I have a customer in Germany who has a warehouse similar size to mine but his rates bill is 10% of mine,he was given the land by the local council on a peppercorn rent.
The reason why all of the big german bike manufacturers have moved into e-bikes is that they have been given cash incentives to do so from the german government under the auspices of 'green' targets.
The reason our councils need these big rates is to fund their pension schemes which represent a massive hole in their budgets,as shops are going bust they put up the rates to the remainder,the law of diminishing returns!
We could make bikes in the UK again together with lots of other products and we could get the UK building again by one simple move-give rates relief for next 10 years only on new build commercial units, at the moment you would have to be the village idiot to make any investment in the UK.
Dave
Kudoscycles
