Recent web-log essays have looked at the broader social fringes of the automotive world: the manner in which the Women's Institute could re-align to include vehicle knowledge as part of its educational choices for its membership, and relative to the future of the BBC, how the world of Formula One should be leveraged as a springboard or hub for the teaching of 'STEM' subjects for both UK and worldwide citizens.
This web-log piece, returns closer to natural 'stomping ground' for investment-auto-motives - that of auto-sector investment opportunity – this time on the far horizon; yet maintains the intendedly alternative social perspective previously deployed.
In doing so, the juxtaposition and coalescence between the automotive world of the vehicle and that of the 'socially good' bicycle is broadly evaluated, with special focus on the British bicycle-maker Brompton given its recently seen willingness to push the envelope of its business model.
The car as we know it today has undergone over 100 years of technical evolution, its earliest origins formed in large part by early pioneers who re-appropriated bicycle technologies and those of other spheres to create the earliest mass manufactured machines. Prior to the revolution that was Ford's Model T, the Edwardian era of the early 20th century on both sides of the Atlantic saw a plethora of lightweight vehicles which given their bicycle origins became known as CycleCars & Quadricycles. Indeed Henry Ford's own first car was a Quadricycle
Some manufacturers such Britain's Rover - producer of the Safety Bicycle - chose early-on to take the route of manufacturing heavier, more robust and luxurious cars for those with means, but other producers whose names have since been consigned to the history books, chose the lightweight route which offered the possibility of exploiting their 'in-situ' manufacturing methods, supplier capabilities, workforce know-how and distribution network.
The CycleCar in its earliest form effectively died-out across Europe and the US by the mid 1920s thanks to the strength of international economic growth. Yet after WW2 those conquered or destitute countries (ie Germany, Japan & France) whose national economies were mired in woe applied heavy taxation demands upon larger classes of (typically imported) vehicle, with the respective national economic agendas orchestrated to promote local manufacture with minimal means to kick-start domestic consumption and so revive the economy.
The small Quadricycle derived car/vehicle was then given a regulated, protected environment in which to thrive. As the natural order would necessarily dictate, these cars became 're-worked' as products formed by the popularisation and 'inter-bred hybridisation' of the motorcycle and motor-scooter. This especially so in economically tight post WW2 Italy which exported its affordable motoring packages to India and across S.E. Asia.
But it was Japan where such economy of pragmatic thought, economy of local transport need and economies of national scale came into being, creating the Kei-car foundations on which modern Japan was born.
In the West & Triad region, the relationship between vehicle manufacturer and bicycle manufacturer then has been a distant one since those early origins, the result of very different fortunes throughout the 20th century as general wealth creation saw the rise of cars and the decline of bikes. The only real exceptions being Honda and BMW who have distinct Cars and Motorcycle divisions, yet encourage idea cross-fertilisation.
Yet broadly speaking that once intrinsic relationship between cars and (motor) bicycles has been long lost, however the eco-future married with long-term structural economic constraints provides the 'big-picture' backdrop which looks to once again encourage vehicle down-sizing and personal transport reconsideration. This is in the earliest of days, yet the visionary work of Daimler with its smart brand, efforts such as Gordon Murray's T25/T27, BMW's reveal of its i3 car and now Audi's showcasing of its UrbanConcept (albeit in only graphic rendering form) highlight the move to alternative 'small-scope' mass mobilisation.
However, the last 20 years has witnessed periodic couplings of the two spheres when specific (typically premium) auto-makers thought they might 'exercise & maximise' their merchandising power and income by applying their brand name to bicycles that were either considered close fit reletive to their 'design DNA', were slightly altered to encompass such attributes, or were considered sufficiently unique to wear the brand. Given that an auto-producer cannot devote much of its resources to designing bicycles, the business case has typically been that of pure contract manufacture for a short run of 'high impact' PR exercises or as additional show-room objects added to the vehicle accessories list or sold as a birthday present for the car buyer's children or partner.
Marques such as Ferrari and Land Rover are good examples, but most efforts viewed as 'strategic brand initiatives' with the P&L of such ventures less closely scrutinized, and they range from the 'artfully prosaic' to genuine efforts to try and kick-start new business streams.
Ferrari has variously offered bikes have ranged from male orientated hi-tech 'set-up' racing machines that grace a clients' own home-homage 'Ferrari garage' through to 2-wheeled 'boulevard cruisers' for uber-fashion conscious females that peddle around Porto Fino marina, up La Croissette in Cannes or along the Rue de la Paix in Paris. Given the deep pockets of Ferrari clients it is expected that the 'art-bikes' ensure good margins and very limited but good public brand exposure where its cars are apt not to go.
Land Rover sought to exploit the mid 1990s onward social trend for 'out-door lifestyles', the trend upon which its 4WD vehicles sales were largely based. As such it contracted the manufacture of L-R branded mountain bikes which of course paralleled the off-road image of its vehicles. But unlike say Ferrari the move was seen as more pragmatic, since between the purchase of the vehicle and the bike sat a realm of accessories purchase possibilities, from the necessary bike-rack that sat on the tailgate to L-R branded all-weather clothing, the possibility to sell in-car seat cover-alls, heavy duty floor-mats, branded caps etc. And more recently as a much more cynical marketing exercise it has tried to offer race bikes with the Range Rover decal.
But in recent years it has been BMW's MINI that has tried to best catch and ride the 'urban-zeitgeist' with its own branded folding bicycle. Whilst seen as just another logo'd bike by many, the cogniscenti will know that the original 1959 Issigonis Mini and one 'sub-species' of folding bicycle named the Moulton share an item of gas/air suspension technology and thus in part a shared lineage created by the inventor Alex Moulton. Thus whilst oblivious to some new MINI customers BMW has well understood how the brand personality of its car and social trends for commuter bikes have been 'pseudo-authentically' melded together via the Moulton heritage; a very post-modern marriage. Yet it did not strike a deal with Moulton Bicycles, nor did it form an agreement with its competitor Brompton Bicycles; instead choosing to use an (as yet) unknown contract producer on which to apply its MINI logo.
[NB here then the business ambition of MINI UK seeking maximum profit margins on the item may have for some in BMW grated against the 'authenticity' element. Yet just as MINI was a popular re-invention of the original, more style than pure design substance, so too will be the folding bicycle, only reminiscent of Moulton in a very post-modern manner].
To bicycling connesseurs of the folding ilk, Moulton's creation - still made today in Bradford upon Avon in various forms – still ranks as the most elegant solution, its 'birdcage' construction more 1950s Maserati than 1890s Rover Safety. But to many commuters and shoppers without such engineering insight, it is perhaps the Brompton folding bicycle that has a special place in their heart, itself produced in Brentford, London, at an annual rate of 22k units.
In a previous article that reviewed the future of British industry through the lens of the BBC's 'Made in Britain' series, investment-auto-motives was critical of the programme editors for highlighting the 'crafted welding' of the company's bicycle frames; not because they are not well fabricated, but simply because such fabrication is not truly a 'high-value' differentiator when good seam welding can be found on the back streets of EM countries. This then was not a criticism of Brompton, but one of our UK perception.
Nevertheless with great aplomb Brompton's BoD have see fit to try and dispel any notions of brand commoditisation, possible accusation of the company 'resting on its laurels' and being a 'one-trick pony'; albeit one born from invention.
It recent months and weeks Brompton have revealed efforts to try and capture two additional income streams beyond its core range of bicycles.
The first has been to replicate the 'Boris Bike' idea seen in London, where by bicycles are rented from bike stations (docking centres). Brompton's idea merges this created trend with that more typically seen say in Holland, where people use bicycles to reach the local train station and for general errands and trips. Thus the company has seen fit to create its own Brompton bike stations in the bike-parks of railway stations, yet because the product can fold-down to a small 'cube' it is able to sit inside what are effectively bike storage boxes. This is then 'reverse engineered' commercial solution, arrived at by merging the Boris Bike philosophy with that of the train station / airport luggage locker. The first installation has been at Guildford station in Surrey itself serviced by SouthWest Trains, and builds upon a previous 'tie-in' effort to have commuters adopt fold-up bikes which of course are far more amenable on public transport.
This then provides the company with a win-win situation. It can access new customers to either trial the bike before purchasing their own, or create a wholly new stream of rental customers. The initiative then calls for a ramp-up in production which presumably allows the procurement manager to negotiate better supplier terms on price and payment schedules. Additionally given Brompton's ability to fabricate steel it presumably has also manufactured the 'bike lockers' into which its products are stored, so as to keep the exploratory exercise project costs to a minimum whilst also retaining the ability to produce a proprietary 'in-house' object with ever greater production efficiency, and important aspect if the project does become successful.
The second initiative is less innovative in its origins but does appear to develop an emergent theme of late; that of durable yet aesthetically pleasing cycle-wear which melds cycling functionality with everyday office and leisure fashionability, The so named Brompton 'Oratory Jacket' has intended overtones of the English public school system for both those 'old boys and girls' aswell as appealing to those with such social aspiration, and as such at first appears a typically 'academic' corduroy item; yet it proffers the additional traits such as: high visibility day-glo strips on the inside of turn-up sleeves and the rear vent (flap), under-arm zips for ventilation, an e-devices holder and an extendable back section – taken from field-sports jacket designs -which allows the back to be broadened when leaning forward to ride. It then appears a very well conceived item which adopts and adapts the best of eons of tailoring know-how and modern coated fibres in basic construction to offer a very well 'hybridised' day-wear cycling solution. At £250 it is not cheap but is on par with off-the-peg jackets by the likes of Barbour, Beretta et al, yet it does not compete with them. Though press reports have been mixed the existence, of the item demonstrates Brompton's willingness to broaden its commercial horizon and reinforce its English/British personality.
The bike-locker rental system then is aimed at attracting a new client group and potentially impressive income stream. The Oratory jacket seeks to satisfying current clients, lure new clients into the Brompton fold and critically open doors to the lucrative world of premium branded true-leisure clothing that has the credibility of real functionality (unlike so much logo'd fashion leisure clothing).
Brompton has then moved from one income stream of its bicycles – though broadening in model range to compete with Moulton and others – to casting its net over 3: bike sales, bike rental and clothing.
The company's reach to move beyond UK sales reliance over the years by growing European, American and Asian distribution footprints was a vital move to aid income stability and growth – exports accounting for 70% of production - but the 3 pronged enterprise provides an even better economic base by which to defend the business from what have been cyclical fiscal and fashion trends, thus less prone to the past fluctuations of bicycle sales alone - even though now on a better pan-continental standing.
Thus the recent past has seen Brompton 'cherry-pick' with perspicacity those inter-linked yet self-contained commercial areas. A new rental customer may never choose to actually but a bike, and a rider of another make of bicycle may well be loyal to his/her bike's brand yet wear Brompton's Oratory jacket (don't be surprised if ladies start wearing the men's jacket and so requiring the company to create a female version).
To re-assert, critically then, these 3 business arenas are linked yet independent. Furthermore, the 2 additional spheres are ones in which Brompton can greatly influence the cost bases. Directly control costs in the case of the bike-locker from self-manufacture. And in the case of it clothing range, choose from a broad range of UK and international suppliers depending upon popularity and production demand. Indeed, it may be possible to create a scale-chain by which newly introduced high-end clothes are produced at home, whilst also utlising foreign producers for more mass manufactured items.
Vitally, Brompton recognises the need to control its own destiny and to do so “cuts its coat according to its cloth”.
So the near-term and mid-term horizon is set and should provide its management with enough operational challenges and rewards over the next 5-10 years.
But what of the 15-20 year horizon? What should Brompton be considering in its present 'blue-sky' thinking? Yes that is a long way off, but the innovative London-based company may wish to adopt the the type of 'unlimited connected thinking' that Soichiro Honda instilled in his company; one born from the production of mating the bicycle with the small petrol engine, and which all these years later today has formed a level of high-minded, socially orientated technical leadership which leads the world and which is intrinsic to Japan's role as eco-technology deployer to the world.
As people more readily use and acclimatise to bikes, so their perceptions of what constitutes a car will also alter. Many have already questioned why cars must be as they are, recognising that vehicles have typically become overt status symbols based on a level of engineered performance which is little if ever deployed.
The bicycle-car connection has been asserted by BMW MINI, but it is the yesteryear Quadricycle that perhaps is most apposite.
As stated, though lost to most people now, it was an item in many guises that garnered popularity at the very beginning of the motoring age; from the 1890s to the early 1920s . It was the natural offspring of mating efficient bicycle technology (tubular frame, spoked wheels, chain and cog-sets, etc) with the internal combustion engine.
Over 30 years or so of use, best seen by early Morgan Cars models (and later Reliant Cars models), it eventually giving rise to the legendary Austin 7, FIAT Topolino, with far greater long-lived existence in Europe, re-born again after WW2. Small cars in the economically bare nations of Germany, Italy & France. Aircraft know-how created the eponymous 'bubble-cars' as the Heinkel Kabine, Messerschmitt KR200 & BMW Isetta to help get Germany back on its feet. In France the Quadricycle has effectively never gone away, always there in the popular consciousness through the 2CV (the 'oversized' intelligent Quadricycle), and still forms respectible competition to the conventional car. (This was not lost on PSA when it tried the 1007 aimed at older people who seek a simple but functional car). Instead, in France the Quadricycle as once was has been constantly re-formatted over the decades, today meeting client's greater demands for comfort and reduced demand for speed, and are generically known as 'MicroCars': with companies such as MicroCar, Axiam-Mega, Chatenet and Acrea supplying various types of consumer demand.
Indeed BMW well recognises the importance of understanding small lightweight cars, and this was part of the reason it acquired Husqvarna – well known for its Quadbike knowledge – so as to feed into future blue-sky car projects such as the i3 and i8, aswell as capturing that growing market which to date has been dominated by Daimler's Smart.
Brompton Bicycle is obviously at the beginning of a new era in its own history. It has learned by bitter experience to become self-reliant, let down by foreign JV partners in the past in which its tooling and IPR was unreturned and exploited, its trust apparently abused.
Thus it now works very much with an understandable, close-controlled 'in-house' mentality to ensure it recoups the rewards of its own hard work. It is not so much a self-serving approach and self-preserving one. Yet it obviously does not detract from the sense of imagination and innovation, indeed very probably serves to heighten such a culture; something reflected by Ford's early days (after his previous exploitation) and has existed historically throughout Honda.
As the UK and West in general faces its own headwinds akin to the economic reconstruction of Europe in the late 1940s and 1950s - one dependent upon a “productivity push” when the cost-base has been necessarily deflated - so it must adopt a similar stance to breach the future. Though it cannot be as fiercely protective of itself as an SME, given that international free-trade is a necessary and vital economic component, it must nevertheless be as broad-minded, exploratory and challenging.
More than perhaps ever it needs to generate new industrial creations that have resonance nationally and internationally.
Whilst the rest of the UK auto-sector and indeed government and the banking-sector is tasked with industrial rejuvenation, the long-term may well belong to a new breed of 'Light-4' vehicle constructors which can exploit their own regional manufacturing capabilities, taking the best from the world of advanced materials and LEV power-trains to serve the changing needs of the western demographic.
To mixed reception and public comment, this is something that the ex McLaren designer Gordon Murray has done, exactly how successful it will eventually become is open to (hopefully intelligent) debate, its production process as forward-looking as the vehicle. Ratan Tata's edict created the Nano which though not yet at its promised price point in India (dependent upon scale efficiencies) has been engineered in Indian and Western specifications. And Japan will continue to leverage its historic lead via the likes of Daihatsu and Honda.
In 15 - 20 years time Brompton may well be one of those evolved personal transport providers, the innovative 'Dyson' (or indeed 'Moulton' or 'Murray') of the 'Light-4', with a raft of inter-linked business interests to defray reliance on its core product range, and itself able to create new complimentary business streams, as it has now done with bicycles.
Though 'Limited' in company status today, its shareholders could well see the attractions of a public listing in years to come. Given its admirable eco-credentials it is already on the way to being viewed as a socially positive 'PLC' - a 'Public Limitless Company'.
Post Script -
The semantics of the terms 'CycleCar' and 'Quadricycle' are all important given their connotations of overt simplicity, meagreness, exposure to risk and discomfort. Ideally a knew term should be used to provide the public with less subconscious resistance to the notion of the simple small car / vehicle. After minimal thought, investment-auto-motives proposes the simple term “Light-4” - from the use of 'four-in-hand' light horse(s) carriage driving – yet also has overtones of the safety associated with the term “4WD” or “4x4”.
