Bianchi to bring back production to Italy

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hoping they also make Bianchi great again. Their current models are hideous

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Italy actually has quite a lot of (small) carbon frame manufacturers. Sometimes also producing carbon parts for sports cars. So the technological knowledge is there.

Having production closer by is not only helping distribution. It is apparently also beneficial when designing and preparing for production: you can get the prototypes and samples faster. And you can work closer with the production plant to align designing and production.

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In fact there are a bunch of carbon frames manufacturers here in Italy, but our industrial system is made of small companies… almost often family driven. Sadly this is not the optimal for a worldwide mass market, with huge investment costs.
Some names: WR Compositi, Carbonitaly, Sarto Antonio, 3T, HBM, CBT Italia, PROTEK, Cipollini, Legend.
They could never compete with some giants like: Specialized, Cannondale, Trek, Canyon… and GIANT!

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Francis Fukuyama, in his book “Trust”, makes the point that this is the basis of Italy’s economic resurgence: these small companies are more agile than a larger company would be so they can exploit niche markets. A large number of niche markets adds up to a lot of sales at higher price points than a single bulk market.

He says that the reason the companies don’t grow further is that in Italy you can’t trust someone you don’t know (this being the theme of the book).

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I’d say that the entire economic, financial, and industrial system is much more risk adverse than the American one.
An entrepreneur here finds more difficult to have loans from banks, to collect funds from investors, to gain trust from potential business partners.
And the biggest problem: bureocracy. Tons of bureocracy.
So remaining small and focus to a niche is a way to avoid these problems. But many industry sectors aren’t suitable to such approach: think about Information Technology, both hardware, obviously, but also software.
Food products, by the way, is the most suited industry, and the results… well, you can see with your eyes the quality of Italian products!

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With Shimano’s issues wrt world supply chains, I sort of thought Campag (production in the eu) would have grabbed the opportunity to fight back, in the European market at least; but I see no evidence this has happened.
My knowledge of macro economics is pretty sketchy; but my broad brush impression (stereotype!) is that Italian industry is generally not set up to react to market opportunities at short notice…

Unless you are somehow prepared to jump into a new void, you simply cannot. From the start of design to production, you should normally count two or more years. And then you should have production capacity and resources available.

And even if you can make it on short notice, it’s hard to break long-standing customer-supplier relationships. Especially when it concerns a temporary crisis.

And you don’t know if the end-customer/user is going to follow.

So, taking up the position of a competitor hampered by a crisis: it’s not undoable, but it’s also a hard thing to do.

I really hope that bringing production back to Italy means that there will be improved QA/QC of things like PF BB tolerances and disc brake mounting holes that are straight and aligned.

To me it was a smart move from Campagnolo, to not increase its production.
Shimano (and SRAM) sell most of their products on branded new bikes, so Campagnolo should have signed an agreement with the big brands to supply first equipment grupsets… I think that it would have been impossible to produce so many groupsets to satisfy that huge demand (the one normally supplied by Shimano or Sram), with the more than possible risk that in 2 years no one would still keep to buy Campagnolo, but will return to Shimano or Sram for the next bike, leading Campagnolo to bankruptcy because unable to payback the huge investments to increase production in 2020.

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Only one of those companies actually produces carbon frames. At least in any kind of quantity. Everyone else sources their frames from factories.

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Yes, it’s Giant.
And the customers are happy with this, so many Italian brands have also outsourced their production.
The truly made in Italy brands are very small and mostly unknown (also in Italy).
And also in Italy the vast majority of bikes are: Specialized, Cannondale, Trek, BMC, Cervelo…

I’d be interested to know if this is strategic on-shoring (to reduce exposure to future events affecting the supply chain), publicity driven, a new R&D focus, if there’s some sort of tax incentive, or some combination of all of the above.

I think most of us are now very much past the assumption that Chinese or Taiwanese made = poor quality, so it will be interesting to see how this is pitched (and priced).

I think the most likely is a combination of supply chain issues, but also the advantage of having company hq close to the production floor, which is a selling point I always see referenced with Campag; it’s a few hours drive from Vicenza to their Romanian factory. Nobody has to get in a plane across Asia to check in on processes.

But also increased automation; as more and more of the frame building process is done by machine, the labour cost per unit presumably comes down, and the competitive advantage of cheap pairs of hands is less and less.

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No tax incentive, in Italy, for the companies that bring back facilities that were outsourced.

The design is still in Italy today, so shifting production won’t help. Visually they’ve dropped the ball a little (cough abomination of a gravel bike), but I’m quite fond of the Specialissima and Aria. Paint jobs have been slipping, to the point where the all celeste or black with fine celeste details (lettering) look the best. The two tones don’t work for me.

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People usually buy an italian bike because they want an italian bike, because of that romantic idea of small factories producing low volume of high quality goods for centuries, not because it is better/faster/cheaper than a Specialized/Giant/whatever.

So in the end the out sourcing of production in far east has been hurting more than benefiting their image, unless they were providing teams a TDF winner. European and north american customers start caring about the origin of some of their goods, while asian still mostly see something that has been built oversea as more premium and Bianchi can still maintain part of the manufacturing in Asia if that shifts or for lower end models.

So I think it is a smart move from Bianchi even if the cost raise and the reality is a bit more industrial than the romantic idea of the customers.

People usually buy an italian bike because they want an italian bike, because of that romantic idea of small factories producing low volume of high quality goods for centuries, not because it is better/faster/cheaper than a Specialized/Giant/whatever.

So in the end the out sourcing of production in far east has been hurting more than benefiting their image, unless they were providing teams a TDF winner. European and north american customers start caring about the origin of some of their goods, while asian still mostly see something that has been built oversea as more premium and Bianchi can still maintain part of the manufacturing in Asia if that shifts.

So I think it is a smart move from Bianchi even if the cost raise and the reality is a bit more industrial than the romantic idea of the customers.

Besides what is the point of producing cheaper in far east if you can only deliver 2022 models in november 2022?

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