Merida Chairman Michael Tseng took a photo at the company Yuanlin’s Taiwan headquarters.
Russell Flannery
Michael Tseng, chairman of Merida Industries, learned a lot about the business from his legendary entrepreneurial father Ike. The family-run Taiwanese bike manufacturer has become one of the world’s largest names over the past 53 years, despite huge changes in costs, technology and rider tastes. Its locally traded stocks hit an all-time high in 2021 with a market cap of over $3 billion, reflecting the thriving pandemic year for outdoor fun and sports.
Then there are the consequences of Covid: excessive production and over-sales. “We had other problems, but even my dad didn’t teach me anything about this.” Tseng explained in an interview with the headquarters of Yuanlin, a city in central Taiwan, that sitting in front of the calligraphy poster, having a huge character to praise the beauty.
Last year, the non-operating red ink caused the company to lose $766 million, or $25 million, despite increased revenue and operating profits. This month, a new 20% U.S. tariff was announced on Taiwan exports, and the appreciation of the new Taiwan dollar this year was not helpful either. Its stock has fallen by more than half over the past 12 months, roughly in line with the declines of its larger local rival Giant and has fallen at constituent suppliers such as KMC and Japan’s Shimano.
However, Shang said he believes the devastating has run and expects demand to stick, especially for global growth e-bikes; Merida’s long-term design and partnership are also intact, which can help weather international uncertainty. Merida’s profit in the first half of the year was $902 million, although lower than $1.1 billion a year ago; revenue fell from $15.1 billion to $14.6 billion.
In a report this month, broker CLST is also better in the industry in the coming days. Taipei-based investment analyst Shu Yu Lin is the author who said “Destocking is coming to an end” and believes Merida’s stock has risen to NT$150 in the coming year’s stock from NT$108 on Friday. “Inventory of dealers in the U.S. and Europe should be healthier in the second half of 2025,” she said, while alternative demand provides helping to increase the estimated NT$31.4 billion sales in 2026 from the NT$28.7 billion this year.
CLST investment analyst Shu Yu Lin: “The disaster will end.”
Russell Flannery
In the decades after World War II, Taiwan began to leave traces in the bicycle industry, part of a strong economic dependence and significant dependence amidst stress from the energy crisis of the 1970s. Merida said part of its ups and downs is because it was already an early promoter.
“The legendary thing about our founder Ike Tseng went to the U.S. as an engineer in the motor scooter business,” Merida’s website said. “Where he saw a sign at the door of a bicycle shop saying ‘We don’t fix inferior Taiwanese bikes’,” stimulating entrepreneurs to take action.
“Ike returned home and built a bicycle factory and was determined to change that perception,” the company said. “Ike was not only a talented engineer, but also a visionary; many of the ideas he had created changed the development of the global bicycle industry.”
Since 1972, Merida has focused on assembling low-cost bicycles for overseas brands. Over the years, it has launched high-value products, including the BMX models for sale in the relatively affluent U.S. market and 10-speed products for sale. By the 1980s, Merida added mountain bikes.
Merida Brand was launched worldwide in 1987, with a name similar to “Arriving in Beauty”. Over the years, the company has added three plants to China’s relatively low-cost mainland. It became the first publicly traded bicycle manufacturer on the Taiwan Stock Exchange in 1992.
Merida has built strong ties in Europe over the years. In 2001, it partnered with German distributor Merida Centurion Dermany to open a design center in Magstadt, Germany. Its riders have won awards from Olympic medals to Ard Rock Enduro, the largest cycling festival in the UK this month. In the United States, Merida does not sell its own brand, but works with California-based professionals to buy a 49% stake in 2001. The professional did not respond to the interview request for this article.
Ike died in 2012, bringing his son Michael to the spotlight. The second-generation leader is CEO in 2023, and his son Vansen is 40 years old. Michael is 68 years old.
The combination of family ownership – which Tsengs owns more than 20% of the shares – is a good thing for Merida, public listing is. Checklists and name recognition help bring competent engineers and employees; having founding family members as management leaders brings authority that external managers do not have. Otherwise, the “power is much weaker” in Taiwanese culture, Tseng said. “It’s a common situation in Taiwan – most founders (at the moment) do not have control over the shares, but (their main business) is still led by the founding family.” Merida’s employees are currently around 2,700.
A global trend, Tseng pointed out that the growth of electronic bicycles. “In Europe, there are already seeing a lot of people using e-bikes as part of their lives. They go to work, go to school and shop,” he said, while growth in the United States is more focused on sports. But we all believe that the e-bike trend has reached. ”
This is in line with the latest report from Skyquest Technology Consulting, Massachusetts, which forecasts an average annual growth of 10% per year for global e-bike sales from 2025 to 2032, totaling $89.8 billion by the end of the period. “The rapid urbanization and deteriorating traffic congestion in major cities are driving the adoption of E-cycles. Their compact design, affordability and ease of use make them ideal for short-circuit commuters. E-bikes provide convenient solutions to transportation problems over the last mile, improve access to personal cars and reduce reliance on personal cars,” Skyquest said. In addition to Merida, suppliers with stake in e-bike growth include Giant, Yamaha, Bosch and Trek.
Merida senior vice president Daryl Chang said via email that Taiwan’s 20% U.S. tariff rate was announced clear this month, but its impact on Merida will be “limited.” First, U.S. sales accounted for only 11% of revenue last year, he noted. In addition, the proposed 20% tariff on Taiwan is not higher than the new burden on other major sources of production, and these bikes travel to US markets such as Vietnam and Cambodia. “There is no disadvantage compared to these countries,” Zhang said.
As for the other remaining challenges: The dollar lost 7% of its share price so far this year, bringing pressure on Merida’s U.S. currency-dominated revenue. Mainland China is another important market and is struggling with consumer spending this year.
Despite the concerns of Destocking, there are still many things to pay attention to the road ahead.
