Collective of European Importers of Electric Bicycles asks Commission to reject EBMA request for registration

2281 days ago

7 minutes

Today, the Collective of European Importers of Electric Bicycles has asked the European Commission to decline EBMA’s request for registration of imports. In a 13-page document, the Collective argues in great detail that there is no justification and necessity for such registration.

According to the Collective, the EBMA has failed to provide sufficient evidence to support its request. “Nowhere in the request has any actual evidence of stockpiling been produced; nor has the EBMA attempted in any way to correlate the trends in export volumes with the established cyclical demand that exists in the EU e-bike market. Linking this paucity of evidence with the apparent fact that the EU industry shows no signs of the infliction of any injury caused by Chinese e-bike imports, the Collective concludes that the EBMA’s request is speculative and aspirational rather than grounded in any real concerns requiring the registration of imports to protect the well-being of the EU industry.

Importers’ injury

The Collective produces exhaustive arguments to prove its point. The group of 20 importers from 8 member states start off by pointing out that registration of import would inflict even greater damage on EU e-bike imports than has already been caused by the initiation of the two investigations. The Collective’s members have suffered major disruptions to their business activities, future planning and development of their products caused by the uncertainties of the outcome of these investigations. As a result, the Collective states: “Registration of imports would therefore inflict a disproportionate degree of injury on EU importers compared to the comparative non-existent injury suffered by the EU industry alleged caused by e-bike imports from China.

Unverifiable statistics

First of all, the Collective argues that the data presented by EBMA to substantiate the request do not reflect accurate import levels. The EBMA has provided the Commission with Chinese export statistics but has requested to keep this information confidential. Whilst such confidentiality is without any grounds, it also obstructs independent verification of the statistics. Should the statistics however refer to the Chinese export code HS 8711901010 (?????), then it must be considered that this code covers “electric self-moving vehicles”, which is a far larger category than simply e-bikes. It also includes for example electric hoverboards, electric skateboards, electric scooters, electric monowheels, self-balancing vehicles, etc. This may well distort both export volumes and average price.

Unsubstantiated allegations

The Collective strongly contests the unsubstantiated allegations against importers who are being accused by EBMA of stockpiling “dumped and subsidised EPACs from China”. The total lead-time from designing an electric bicycle to actual delivery is typically around 8 to 14 months. For repeat orders, typical lead-times would be 5 to 8 months. These specific characteristics of the electric bike business exclude any commercial and business rationality of ordering extensive quantities of electric bicycles randomly, from any Chinese assembler that has some production capacity left.

The EBMA claims in its request that “EU EPAC producers are mainly SMEs”, while EU importers are “large customers” implying that they are not SMEs. To date, all companies in the Collective are SME’s. In contrast, at least three of the sampled EU producers are extremely large enterprises or groups with significant production capacity, a well-capitalised corporate structure and a sizeable number of employees. It is therefore grossly misleading to present the EU industry as a group of SMEs confronted by larger and stronger importing companies.

Highly misleading

It is absolutely incorrect for the EBMA to claim that the higher level of exports from China in December 2017 point to stockpiling activities. These products will not have arrived in the EU until February or March 2018. Therefore, these imports will arrive in the EU and be available for sale at the start of the high selling season, March till September, and that is completely in line with the pattern of demand in the EU market each year as it currently operates.

Furthermore, there is also the impact of the Chinese New Year, which usually closes each factory for about three weeks. To ship out enough bikes for the sales in March, April and the first half of May, EU importers rely on the use of full production capacity in November to January. This explains why export shipments in December and January for delivery in the EU in the next months are normally higher than the average while deliveries dip in the subsequent months.

In fact, EBMA’s export data corroborate this explanation, keeping in mind that there is a time shift of between 4 and 8 weeks between export and delivery. In January 2017, export volumes were at their highest level and would have been actually delivered in March 2017. The same is true of the volumes reported for December 2017. Therefore, there is nothing anomalous about the increased volumes of exports taking place in December 2017 as reported by the EBMA and, if anything, it shows that the usual forces in this market are functioning normally.

It is therefore highly misleading for the EBMA to present increased export data and volumes in December 2017 as delivered merchandise available for immediate sale. The delivery times mean that they will arrive just in time for the start of the main selling period in the EU market.

Proper context

One single month of alleged high export volumes (i.e. December 2017) therefore must be placed in the proper context. In November and December 2017, the volume of imports allegedly coming from China were 55,295 and 83,560 units respectively. Throughout the course of 2017, the average monthly volume of imports was 66,050 units. So, in November 2017 import volumes were 16% lower than the average for the year, while in December 2017 they were 26% higher than the average. Looking at this picture on a quarterly basis as opposed to a monthly one, import volumes in Q4/2017 are actually lower than any of the other quarter of that year.

GraphSource: EBMA Request for Registration

No evidence

The Collective further argues that the Complaint and all evidence collected so far during the investigations have not shown any prima facie injury to the EU industry that would justify the registration of imports. The EU industry has shown constant and significant growth of production and sales that simply excludes any possibility to conclude the existence of material injury. The EU electric bicycle industry has been constantly profitable and there is no sign it will decrease its profitability in the future. The EU electric bicycle industry has been competing successfully with imports from China that do not prevent increase of EU industry’s prices, further investments, additional production capacity and employment levels

The EBMA has put no evidence in place to substantiate the necessity for the registration of imports. The Basic Regulation requires that any request for registration of imports made by an EU industry contains “sufficient evidence to justify such action”. The request falls woefully short of this requirement. The evidence provided is a summary of alleged export volumes from China, based on an unidentified source, accompanied by a series of spurious and unsupported allegations, which as explained above, are materially defective.

Annick Roetynck on behalf of the Collective

Annick Roetynck

Annick is the Manager of LEVA-EU, with decades of experience in two-wheeled and light electric mobility.

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