Don't Cry for Bikes Argentina!

In the 2000s economists coined a term for a new economic trend: Globalization.  The world was getting smaller and closer.  Economists link emerging globalization back to the early 1970s with the “open skies” policy of airline travel.  It was then possible to be anywhere in the world in a single day’s travel.  This also meant goods could also be shipped anywhere in the world in a single day or definitely by the next morning.   Globalization continued into the 1990s with the first published and live websites.  By 1995 nearly every organization had some form of a website.  Websites made it possible to interact with the world in seconds, without leaving home or the office.  The speed and power of the web permeated other businesses and layers of society--everything needed to be quicker.  The world can be delivered right to your home or office with immediate effect.  

Except in Argentina.

It is summer in the Southern Hemisphere and that means the weather for biking is near perfect.  What it also means is that biking enthusiasts and bike buyers are pouring into the local bike shops looking for new equipment and new bikes.  Only once inside however, they aren’t seeing much of anything.

Bicycle manufacturing has, like many other industries, freely accepted globalization and has thrived with the practice of bringing the best the world has to offer together.  For any given bike, components come from Europe, Asia, the US and together a new machine is born.  Argentina would rather have every part come from Argentina.

This past February Argentina enacted a new law that restricts the importing of over 600 goods.  The idea was to guard domestic companies from unwanted competition.  The country has had some success but for the most part this protectionist economic policy has hamstrung quite a few industries, the local bicycle shop being one.  As a result fewer bikes are being sold in the country.  Building a bike is truly a global initiative and with restrictions on foreign-made parts it is very difficult to get a complete bicycle in Argentina.  One shop owner noted that for most of his stock something is missing: pedals from Asia, wheels from Europe, saddles from Italy, and so on.  The owner claims his business will be down 15% this year that ends today. 

Inflation has hit the bicycle industry very hard because of the new laws.  Take for example a $150 bike.  In Argentina it will sell for $700.   People are riding their old bikes, it looks like the 1970s with all of the retro cruisers rolling through the country (see photo).  

Buenos Aires, like other global metropolitan cities, wants people riding bikes.  People on bikes mean less smog, gridlocked traffic, parking problems and more.  This new policy comes at a bad time as the city of Buenos Aires enacted a “Better on a Bike” program that took ridership from 30,000 bikers up to 150,000 dedicated riders in just three years.  In 2013 Buenos Aires plans to build 30 miles of bike lanes.  The city has already opened 50 miles since 2009.   

What is most interesting is that foreign parts only make up 11% of bikes sold in Argentina but as one shop owner noted, people want a bike that is 100% finished and he sums up, “without those parts the bike is useless."

Visit our website at www.stickybottleteam.net.  Have a Happy New Year!