Wheels are turning again for bicycle companies

When rep-resentatives from the UK bicycle industry gather today for their annual conference, they will have much to encourage them. The continuing interest in health and fitness, allied to the growing concern for the environment, is boosting sales. Cycling has even become trendy enough to have an exhibition devoted to it at London's Design Museum.

Nevertheless, a huge question hangs over this gathering in the Midlands. Is the industry that gave us such names as Dawes, Claud Butler and Raleigh going the way of the UK automobile business? Or can it rebound from decline to capitalise on the individual designers and engineers hired by foreign bicycle manufacturers?

There are some promising straws in the wind. Raleigh, the most venerable UK brand which for the past decade has been owned by Derby International of the US, is rumoured to be on the verge of being sold, possibly to a UK buyer, while Dawes is reported to be returning to British hands via a management buy-out from the ATAG company of the Netherlands.

Still, overseas companies have made big inroads into the UK bike market - which has aggregate sales of 2 million units a year - particularly in the well-publicised mountain bike sector. As a consequence, domestic companies tend to find themselves struggling to compete at the cheaper end of the market.

One response, according to Jim McGurn, editor of Encycleopedia and other specialist cycling magazines, is for British companies to fight their way upmarket again - to produce tandems, trailers, transporters and other products where it is possible to be innovative and distinctive. "The mass market is already lost to China and Taiwan, so what we need is clever ideas," he says.

Certainly, the country has the people to build such an industry. For example Andrew Ritchie, inventor of the revolutionary Brompton folding bicycle, is based in west London, while Pace, the maker of some of the most highly-regarded components in the mountain biking business, is based in Yorkshire. Many, however, are working for overseas manufacturers. Mike Burrows, designer of Chris Boardman's Olympic-winning racer, is one. Jon Whyte (see panel), the Formula 1 engineer-turned-bike designer, is another.

One company that appears to be heeding Mr McGurn's advice is Tandem. Second to Raleigh in terms of market share and owner of such brands as Townsend and Falcon, it has been having a tough time - though interim results showed last year's loss of pounds 3.5m reduced to pounds 200,000.

Robin Bromley-Martin, chief executive of Tandem, is pushing his company upmarket into the area of what are termed "trekk- ing-type bikes" - cycles that incorporate many of the features introduced by mountain bikes, but also have such refinements as mudguards and more comfortable saddles. This way, he feels, it will benefit from what is perceived to be a substantial market for family cycling.

Mr Bromley-Martin claims the sector is growing by 15 to 20 per cent a year, largely a result of the enthusiasm for mountain biking. Often regarded as a fashion accessory for well-off urbanites, the mountain bike has made a form of transport that was largely the preserve of the poor or worthy exciting enough to attract the likes of Mr Whyte, as well as product design companies such as Ideo.

Though the perception is that the British cycle business is a cottage industry, elsewhere it the industry is taking on the characteristics of a global business. Giant announced plans for a US factory on top of the Netherlands facility where it expects to make 100,000 cycles a year. David Collins of the Bicycle Association believes cycling is indeed becoming a global industry - US companies are almost as prominent in Britain as they are at home.