Pon Holdings - the Netherlands’ biggest family business – has announced it wants to create the world’s largest bike company. Considering Pon is a householdname connected with Volkswagen, and the group’s strong portfolio of automotive brands, it’s a remarkable strategy. Pon already owns Gazelle, the biggest Dutch bike manufacturer and made a takeover proposal to Accell Group, the owner of bike brands Sparta and Batavus.
Mind you this family business already is a global company with a total turnover of € 6.8 billion in 2015 and nearly 13,000 employees in 32 countries. It’s a diversified trading and distribution company with activities in cars, tires, marine engines and electrical engineering.
Since its first investment in the bicycle world (2011) the group has grown a powerful bicycle brand portfolio, today about 10% of its workforce is active in the bicycle market. In 2017 some 800,000 Pon bikes will make their way to customers around the world, with an expected total revenue of about € 700 million. It has been steadily building its other holdings, notably in electric bikes.
Accell sold more than a million bikes last year and recorded a profit of 32 million euros on sales of 1.05 billion. "After a detailed assessment of the strategy and performance of Accell Group, Pon Holdings has concluded there is an excellent strategic fit between the bike activities of both companies with benefits for all stakeholders. The combination results in the world’s leading global bicycle company," Pon said in a statement. If successful, the merger would create one of the world's largest makers of bikes and electric bikes and bring more than a dozen brands together.
In the Netherlands most people know Pon as importer of Audi and Volkswagen, so why are they investing in bicycles?`
Are cars the best solution for a city?
Raymond Van Gense at Pon explains in a 2014 interview with Fietsersbond “As a trading and distribution company we always had to wait to anticipate changing market conditions. With these acquisitions we have become producer and we can make our own decisions. This is important because the market is changing. Urbanization is growing and cities are faced with an immense mobility issue. There are problems with air quality, parking and many more. The idea of ownership is also changing, consumers explore ways to share a car for example. Wait and see is one way to react to this situation, you can see how long you can continue to sell cars. Or you can develop other mobility solutions for everyone. Perhaps a car, perhaps a bike or a combination of the two?”
Cars Take Space
"You have to ask yourself if the car is the best solution for a city," Van Gense argues. “In urban environments you’ll want a mobility solution that doesn’t take much space. We expect a lot of speed pedelecs, a fast e-bike that can get up to 45 km/h. It offers speed for commuters and doesn’t take much space. Even for electric cars this is a huge challenge, today the e-bike is the only commercially successful e-mobility solution.”
Pon is moving away from selling cars to selling mobility solutions: “As a salesrep you don’t ask what car your prospect wants but ask questions about mobility. Where do you need to go? When? What will you be doing? Then you can give an answer. Maybe the answer is indeed a car, but it might as well be a leasecontract, a carsharing solution, an energy contract, an extra charging station,… or a bike.”
A year ago Peugeot announced its mixed mode transportation system. If you hate tight parking spaces or you can’t park close to your destination Peugeot throws an e-kick scooter in the deal. The electrically assisted scooter should meet the challenge of a constantly evolving urban environment. e-Kick provides a multi-modal mobility experience, helping to provide fully independent transport solution to cover the “last-mile” of any journey.
Notebook vs. E-Bike
Finally, from a Belgian point of view it’s difficult not to draw a parallel with D’Ieteren: a family business, importer of the VW brands,... but it's a publicly traded company.
A year ago, D’Ieteren surprisingly announced the acquisition of the iconic Moleskine notebooks. One year down the road the Italian brand left investors underwhelmed after one year because of shrinking margins and the stock saw its biggest drop in 3 years. It remains to be seen how Axel Miller's gamble to differentiate will pay off. The difference with Pon couldn't be any bigger.
Faites vos jeux, time will tell who was right.