Blazing New Trails : As Mountain Bike Market Reaches a Plateau, Makers Shift Technological Efforts Into High Gear

Roger Gauvin’s cluttered office at Answer Products Inc. in Valencia could be a museum of mountain biking.

*

In one corner is an arch-shaped metal contraption that looks more like an instrument of torture than one of the first shock absorbers (or, as the trade calls it, “suspension forks”) developed for mountain bikes. His product is only 5 years old, but that’s almost an eon in the fast-paced mountain bike business.

“It takes new products that are better every year to survive,” said Gauvin, Answer Products’ cycling products manager and a mountain bike enthusiast himself.

Largely through its innovative brand of Manitou suspension forks, Answer has grown into one of the leading suppliers of mountain bike components in the United States. Answer’s suspension fork, the highly refined result of computer-aided design and advanced machining, can cost $350--or more than some complete mountain bikes. Answer’s sales have reached an estimated $11 million, with about 70% coming from suspension forks.

The mountain bike industry may have been born on the trails and in the garages of Marin County, but it now has a second home in the San Fernando Valley and Ventura County, where half a dozen firms have ridden a boom that has revolutionized the $3.5-billion U. S. bicycle market.

Companies here produce everything from complete mountain bikes for beginners to high-tech components for professional mountain bike racers. The colorful logos of such locally manufactured brands as Diamond Back and Manitou emblazon the machines of millions of riders.

About 30 million Americans now ride mountain bikes or “hybrid” mountain / road bikes, up from 7.5 million in 1988. In 1993, 90% of the 7.5 million bicycles sold to adults were mountain bikes.

NORBA (the National Off-Road Biking Assn.), whose membership includes the most avid mountain bikers, says most of its members are men in their late 20s, and the average price they paid for their last bike was a hefty $1,589. Mountain bikes typically have 26-inch wheels and are raced over cross-country, slalom and downhill sites.

But even in the mountain bike-trade, there are signs that the U. S. market has reached a saturation point. “We’ve seen kind of a lull,” said Christian Davies, marketing manager at Parkpre Bicycles, a mountain bike manufacturer in Moorpark. “It seems like everyone does have a mountain bike and everyone has had a mountain bike for quite some time.”

So in this mature market, companies face the challenge of trying to satisfy consumers with more sophisticated and, at the same time, often less expensive products. To compete, they must stay on the leading edge of technology.

*

“The mountain bike business is in this rapid development curve that very few companies have ever had to face before,” said Richard Cunningham, editor of Mountain Bike Action magazine.

“It really is a challenge to make more sophisticated products at a cheaper price,” said Scott Boyer, a vice president at Answer Products.

That challenge is consuming the energies of Answer’s staff at its Valencia headquarters, where the factory floor is crammed with welding machines, piles of aluminum tubing and products emblazoned with the sleek Manitou logo that are waiting to be shipped to stores. In a small office off the floor, half a dozen design engineers use a $60,000 software program to manipulate three-dimensional images of suspension forks on their computer screens, simulating the stresses that the real product will face on the trails.

Answer is owned by Tucker Rocky Distributing, the leading U. S. motorcycle accessory supplier. Answer also produces everything from mountain bike handlebars to cycling shoes and shorts.

But most of the company’s fortunes remain tied to its suspension forks. This lightweight, aluminum fork has become the linchpin of Answer’s overall business. “It’s one of the defining things that makes a mountain bike now--does it have suspension or not?” said Gauvin.

The company’s 1996 suspension fork model weighs 3.1 pounds, compared with 3.8 pounds in 1990. Why? “A real enthusiast will pay $100 to lose 20 grams” of weight in his mountain bike, Gauvin said.

An expensive mountain bike weighs about 25 pounds, compared to about 28 pounds for less expensive models. That extra weight can make a lot of difference if you’re on a 1,000-foot climb. The more expensive bikes tend to have more highly engineered frames, a better quality of metal to make them more durable, and components such as suspension forks for a smoother ride.

Since it entered the mountain bike business seven years ago, Answer’s sales have more than tripled. The company was founded in 1976 in the garage of motocross racer Eddie Cole, and it originally sold off-road motorcycle parts and clothing. In the late ‘80s, with the mountain bike boom, the company saw an obvious avenue for diversification.

In the United States, Answer is locked in a battle for the technological edge with another suspension-fork company, San Jose-based RockShox. “They tend to leapfrog one another,” said Pete Sweeney, vice president of sales and marketing at Western States Import Co., maker of Diamond Back mountain bikes. “Answer’s the hot ticket and then RockShox will come out and beat them.”

*

According to industry experts, the two companies each have a 50% share of mountain bike suspension-fork sales through dealers. But in sales to original equipment manufacturers who include the parts on their complete bikes, analysts say that RockShox leads its rival with a 70% share. “RockShox made a strategic move toward the OEMs and basically courted all the OEM business,” Cunningham said.

But Answer Products has demonstrated its commitment to the technological battle by investing $1 million in developing its latest suspension fork. And their engineers are already working on the 1997 model. “We’re in the business much like athletes,” Gauvin said. “You’ve got to win the race.”

Another big local mountain bike concern is Western States Import (WSI) in Camarillo. This company started out in 1971 as an importer of Japanese road bikes and Asian bicycle components.

Along with a few rivals, WSI was one of the pioneer mass marketers of mountain bikes. In 1990, it was acquired by China Bike Co., based in Hong Kong, the world’s largest bicycle manufacturer and exporter. Analysts estimate that Diamond Back is among the top six domestic cycle brands, with a 12% share of unit sales in the United States.

With a line of around 30 Diamond Back models, the company caters to both recreational mountain bike riders, who usually buy models priced under $400, and enthusiasts who will pay more than $700 for a machine that they can subject to the most rigorous trails.

“We are putting a lot more emphasis” on the enthusiast bike market,” said Sweeney at WSI. “People are taking a liking to the sport. More and more do get hooked and turn from recreational cyclists into enthusiasts.”

Such a strategy puts a premium on staying abreast of technological change. The top-of-the-line Diamond Back Racing bikes ($900 and more) feature front and rear suspension--the latest trend in mountain biking--as well as advanced carbon-fiber frames.

“We like to think you can take them out of the box, take them to your local racecourse and put them to the test,” Sweeney said.

*

Indeed, the daredevil image of mountain biking has been a big part of the sport’s success, even among riders who steer clear of the tougher trails. Few companies have exploited that image more effectively than Parkpre Bicycles in Moorpark, which has sponsored a race team featuring mountain biking legends Mark Howe and “Pistol” Pete Loncarevich, two men known as the Greg Lemonds of mountain biking. “It’s been a great promotional tool for us,” said Davies, the marketing manager.

Parkpre’s bikes cost as little as $250, but its emphasis has traditionally been on race-ready models priced over $1,000. Its top-of-the-line racing model, complete with front suspension forks and lightweight steel tubing, goes for about $1,700. “It was one of the first companies that totally concentrated upon building a cost-effective racing machine for the average person,” Cunningham said. “They set a standard which had to be copied by everybody else.”

Parkpre was founded in 1989 by Cozy Yamakoshi, a Japanese bike designer, and put its first bikes out in 1990.

But even Parkpre believes that the bike racing market has reached a plateau. “We definitely don’t see the racers purchasing bikes as much as they used to,” Davies said. “They seem to have their bikes and feel fine with them.”

So the company is eyeing the customer who “does not have an up-to-date mountain bike,” said Davies. In this niche, Parkpre also offers models priced from $520 to $800.

Cunningham, for one, endorses this strategy of selling to weekend enthusiasts. “It’s not as exciting, obviously,” he said, but “only a handful of people actually race. The joy of mountain biking is being out there by yourself in a beautiful place. It’s really nothing to do with flying 30 feet in the air.”