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The development of the bicycle industry in Japan after World War II

Author: Ueda, Tatsuzo
Series: Japanese Experience of the UNU Human and Social Development Programme series ; 38
Published Year: 1981
Main Text (PDF version)

Introduction 1

I. Development after World War II
1. Production Trends in Different Phases 2
2. Changes in Demand Structure 3
3. Changes in the International Environment 6

II. Current Situation and Structural Features of the Bicycle Industry
1. Localized Grouping of Smaller Enterprises 12
2. Independence of Parts Manufacturers 13
3. Mercantile Capital-like Character of the Assembling Sector 15
4. Features of Marketing Structure 16

III. Technological Development and Structural Changes in Production and Marketing
1. Technological Stagnation Due to War 20
2. Participation of Former Major Munitions Plants 22
3. Promotional Subsidy and Technological Development 24
4. Institution of JIS and Transformation of the Finished-Bicycle Assembling Sector 27
5. Technological Development and Stratification of the Bicycle-Parts Industry 31
6. Themes of Technological Development 36

Tables 42

Notes 65


Japan's bicycle industry today accounts for only 0.2 per cent of the combined value of the products shipped out by all manufacturing industries in the country,1 but the total worth of its exports ― surpassing in and after 1967 that of the UK, once the world leader in bicycle production ― is ranked first in the world,2 while its output is second only to that of the US.3

Bicycles are believed to have first come to Japan in the early Meiji years, shortly after its self-imposed isolation had come to an end, and bicycle production in this country, beginning with the manufacture of spare parts for and the repair of imported bicycles, has developed through many vicissitudes in a process of adapting itself to the Japanese environment.

As the history of development before World War II will be described by Mr. Tsuneyoshi Takeuchi, my paper will review the postwar development of the Japanese bicycle industry following its almost fatal destruction by the war, analyse its present structure, trace its technological development in that connection, and look into its problems. The sources of information on which my report is based are listed at the end of each section for readers' reference.


1. Production Trends in Different Phases

In 1945, the year World War II ended, only 18,000 finished bicycles were produced in Japan, far below the prewar peak reached in 1940, when 1.25 million finished bicycles worth ¥89 million were produced, together with parts totalling ¥21 million in value. Thus bicycle production was resumed in postwar Japan virtually from scratch.

As indicated by the figures in Table 4, giving statistics for output, import, and export of bicycles in Japan, the postwar period can be divided into the following phases in terms of finished bicycle production trends.

1) Reconstruction phase, 1946-1950: Annual output grew from 100,000 to 1,000,000 units. (Goods were in short supply under controlled economy; anything produced would sell.)
2) Stagnation phase, 1951-1955: Annual output hovered between 1,000,000 and 1,100,000. (Domestic demand stagnated after the Korean War cease-fire.)
3) Growth phase, 1956-1960: Annual output soared from 1,400,000 for 3,000,000. (Domestic demand rose sharply as business activity picked up in Japan.)
4) Transition phase, 1961-1965: Annual output levelled off at between 3,100,000 and 3,200,000. (Utility bicycles were replaced by cars; the bulk of demand shifted to lighter models; exports to the US started.)
5) Great leap phase, 1966-1970: Annual output soared from 3,600,000 to 4,500,000. (Exports increased; sport models and other new types were developed.)
6) Boom phase, 1971-1973: Annual output jumped from 5,000,000 to 9,400,000. (Both domestic and export demand expanded; there was a boom in mini-cycles.)

7) Reactionary slump and overproduction phase, 1974-1978: Annual output fell off to 6,000,000. (Domestic demand stagnated; yen appreciation suppressed exports; competition emerged from developing nations.)

Thus there was a more or less regular trend whereby the annual output of finished bicycles alternated in approximately five-year phases between growth and stagnation from the end of World War II until 1970.4

From 1971 to 1973 there was a boom in bicycles, followed by a reactionary slump from 1974.

Meanwhile the output of bicycle parts showed a roughly similar trend to that of finished products. This is not surprising, since the output figure included the parts that were assembled into finished bicycles and a growth in finished bicycles sales necessarily resulted in an increase in the demand for parts. In the next section each phase will be analysed in some detail with reference to changes in demand structure.

2. Changes in Demand Structure

There are two aspects to the demand for bicycles, reflecting their use as a means of transport or pleasure.

In historical terms, the demand for bicycles in the early stage of industrialization increased mainly as a result of the practical need to carry goods and/or people. This trend is still found in many developing countries nowadays. As industrialization advances later on, bicycles as a practical means of transportation are increasingly replaced by automobiles, and demand for bicycles stagnates. However, with the advent of an affluent society where people's average income is above a certain level, bicycles come to find a new demand as a source of sport and amusement.5

Japan has experienced this common process since the end of World War II. Until the 1950s, bicycles were mostly used by common people as a means of personal transit or by small stores and factories for the transport of goods. As the Japanese economy passed its reconstruction stage and entered a phase of expansion, the bicycle as a utility item was gradually replaced by the automobile, and the bicycle industry entered the 1961-1965 phase of transition referred to above.

It was in 1957 that the Ministry of International Trade and Industry began to classify statistical data on bicycle production by vehicle type. As indicated by Table 5, in which annual bicycle output from that year on is classified by type, the proportion of utility vehicles in the total output of finished bicycles kept on shrinking after reaching a peak of 76 per cent in 1959, accompanied by a slowdown in the growth of the overall output of bicycles and by a quick increase in the production of automobiles. During the first half of the 1960s, it was even suspected that the bicycle industry was no longer adaptable to the rapidly growing Japanese economy.6 Had utility types still constituted the mainstream of bicycle production, the overall output in this phase would have registered a much steeper decline. But since the demand for lighter bicycles and sport models started to increase in this five-year period, the overall output levelled off.7 The production of utility bicycles continued to stagnate even in the industry's great leap phase from 1966 on, and their proportion of the total output of bicycles fell to less than 2 per cent by 1978.

In contrast, the proportion of lighter or sport models in the overall output of bicycles gradually rose from 12 per cent in 1958, surpassed that of utility types and constituted the biggest segment in 1964, and reached 57 per cent in 1967. Although their proportion shrank in 1968-1969 as a reaction to the preceding boom and as a result of the increase in children's and specialty items, lighter or sport models again held a 50 per cent share in 1970. In 1973, however, their share once again took a downturn, affected by the emergence of mini-cycles, which will be referred to below in greater detail.

The great leap in 1966-1970 after the transitional phase of 1961-1965 was mainly due to an increased demand for bicycles as a means of sport and physical exercise. In Japan, a campaign to promote cycling was actively staged by the association of bicycle manufacturers, whose efforts to develop improved lighter sport models began to bear fruit. Furthermore in the overseas market, including above all the US, demand for sport bicycles increased and improved Japanese products were able to satisfy this increased demand, resulting in a steady growth of exports from the second half of the 1960s.8

The boom in bicycles from 1971 on was attributable in part to the sympathetic acceptance of the "bicology" movement, which had originated in the US, by the increasingly environment-conscious Japanese public; to the active presentation of bicycle shows by the manufacturers' association among others; to improvements in the environment for cyclists including the construction of cycling roads; but mostly to the emergence of handy mini-cycles and their quick proliferation.

The vast sales mini-cycles achieved could be explained by their activation of a huge latent demand for a handy means of transit for the expanding suburban population (resulting from the "doughnut" pattern of the distribution of city dwellers), who needed something more than their own legs and feet to satisfy their shopping and other everyday requirements.9

Bicycle manufacturers made active capital investments to meet the rising demand for their products, but the boom proved only short-lived under the pressures of the general business recession following the oil crisis, and their output fell sharply from 1974 on. As a result, many of the production facilities newly installed during the boom were obliged to stay idle, pushing up the fixed costs to their owners and inviting a cutthroat sales race to reduce the burden of these increased fixed costs. Moreover the central role played by mini-cycles in bringing about a boom in demand adversely affected the trade-up strategy of bicycle manufacturers. The steady increase in the production of lighter and sports items during the second half of the 1960s had helped to put bicycles among the more luxuriously perceived and expensive products, but the emergence of mini-cycles, though activating a latent demand, served to reduce the average unit sales price of bicycles and consequently their profitability for manufacturers.10

As regards bicycle parts, whose overall production, export, and import trends are summarized in Table 4, an itemized analysis is given in Table 6. As is evident in Table 7, in which the yearly shares of each item are given in percentages, those of the frame, mudguards, handlebars, rims, saddle, and gear case have decreased while those of the chain wheel and cranks, calliper brake, hubs, free wheel, and transmission have increased, reflecting the expanding output of technology-intensive parts to cope with the aforementioned trend for demand to shift from utility types to sport or pleasure vehicles.11

3. Changes in the International Environment

During 1936 and 1937, the prewar peak period of bicycle export from Japan, about half the output of the nation's bicycle industry was exported,12 in part stimulated by the government's policy of encouraging export to the yen bloc, and bicycles held the leading share in the combined value of machinery exports from this country.13

Bicycle exports from Japan after World War II remained stagnant for many years until about 1960,14 as Table 4 indicates.

In the 1960s, the export shipments of finished bicycles and their parts began to increase, taking a great leap from the second half of the decade until the 1970s. Finished-bicycle exports registered their postwar peak in 1972 at 1.55 million units or in 1974 at ¥22,900 million, 3.4 or 7.6 times, respectively, the corresponding level in 1965. The peak value of parts exports, achieved in 1974, was ¥49,200 million, representing a 10.5-fold increase over the 1965 record. An itemized breakdown of parts exports is given in Table 8; they show a generally parallel trend to the aforementioned item-by-item output.

During this process of export growth, a major change took place in the geographical destinations of bicycles exported from Japan. As the classification of bicycle shipments in value by region and country (Tables 9 and 10, respectively) indicates, the bulk of them went to Southeast Asia and a major part of the remainder was destined for Africa and Latin America in the 1950s. But from the 1960s on, export to North America, above all to the US, increased tremendously in contrast to a decline in the shares of those developing regions in the world market for Japanese-made bicycles.

The importance of the US market to the postwar export of Japanese bicycles increased so quickly that the proportion of US-bound shipments to the nation's overall bicycle exports soared from only 3 per cent in 1957 to 66 per cent by 1974.

Changes in the ratio between finished-bicycle and parts exports are traced in Table 11, broken down by region. The share of finished vehicles kept on increasing until about 1970, and then that of parts began to grow, indicating a shift of the dominant role in Japan's bicycle exports from finished products to parts over recent years.

While shipments to Europe from the outset almost wholly consisted of parts with a negligible proportion of finished vehicles, the latter's share in export to Southeast Asia and Latin America has shrunk, with a quick rise in the former's. Bicycle imports from Japan into semideveloped nations in East Asia consist almost wholly of parts and include quite an insignificant proportion of finished products. Nor do these nations import finished bicycles in substantial volumes from countries other than Japan. This means that bicycle makers in Taiwan and the ROK are now fully equipped to assemble finished bicycles out of components either imported from Japan or made domestically. More important, Taiwan in particular is emerging as a powerful competitor of Japan in the US market, as parts exports from Japan have played a major role in the assembly of finished bicycles in Taiwan.15

The US is the biggest bicycle producerl6 and importer17 in the world. As there are no bicycle parts manufacturers in the US, unlike in Japan or Europe, American finished-bicycle makers have to depend for parts supply wholly on imports from Japan, Europe, and, more recently, some developing countries. Parts production would not pay off in the US on account of the high labour cost among other factors. Stelber went bankrupt in 1977, and the bicycle industry in the US is now an oligopoly of six assembling manufacturers.18

The competitive situation between Japan and the semideveloped Asian nations in the US market for finished bicycles is represented by the figures in Table 13. In terms of value, while Japan's share in the market grew from 28 per cent in 1971 to 36 per cent by 1976, Taiwan's increased more significantly over the same period from only 3 to 23 per cent.

Taiwan's inroads into the US market were even more remarkable in number of units exported. Its share in the overall US import of finished bicycles, which was less than 5 per cent in 1971, expanded by 1976 to 34 per cent, consisting of 570,000 units and far surpassing Japan's 28 per cent share comprising 470,000 units.

This marked difference between value and volume trends seems attributable to the following factors:19

1) Taiwan's exports, as indicated in the table, mostly consist of lower-grade items, above all "high-risers" (which generally refers to children's bicycles in the US) of 24 inches or less in wheel diameter.
2) Japan's exports primarily comprise higher-grade items, above all adults' sport bicycles with 26-inch or larger wheels.
3) Japan has overwhelming strength in parts export to the US (Table 14).

Underlying Taiwan's concentration on the export of high-risers is the circumstance that this type is no longer a lucrative export item for Japanese manufacturers and is now produced by them exclusively for domestic consumption. Taiwan's products achieved success in the US market by taking advantage of this supply gap. American high-riser users have a unique preference for the coaster brake (which is applied by turning the chain in the reverse direction), and virtually all the bicycles intended for the US market are equipped with it. Though of lower grade, high-risers are the standard type for children's use in the US and are believed to be in steady demand even during times when the economy is depressed. Primarily dependent on this type, Taiwan has expanded its bicycle exports to the US, and risen from its previous position as a marginal supplier to being a steady supply source. Today, Taiwan-made high-risers seem to enjoy an established competitive position in the US market.

In the market sector for higher-grade items, mainly comprising adults' sports bicycles with 26-inch or larger wheels, Japan is highly competitive with an over 40 per cent share in 1976, in both value and volume. Notably, however, Taiwan and the ROK are gradually building up their competitive strengths even in this sector, though their products of this grade include a substantial proportion of indirect exports from Japan because American importers usually specify that Japanese brands for such major technology-intensive components as transmissions and brakes be used in the finished bicycles they order from Taiwan or the ROK. Therefore, if the value of these Japanese-supplied parts is subtracted, the net worths of bicycle exports from the two countries will be somewhat smaller.

Meanwhile, the US market for bicycle parts is virtually monopolized by Japanese products, paralleled by none (Table 14), as a result of strenuous endeavours by Japanese manufacturers to improve their productive techniques and strengthen their price-competitiveness in the international market by concentrating on technology-intensive items, developing new products, and improving existing products. The non-price competitive strength of Japanese-made parts, for which brand penetration is a major factor, is firmly established. Since, as stated above, US-bound exports of Taiwanese and Korean finished bicycles are obliged to be fitted with Japanese products for their technology-intensive parts, there is no likelihood in the immediate future of any quick increase in parts exports from the semi-developed nations in East Asia to the US market.

The outlook further into the future, however, is a little different. In fact, the appreciation of the Japanese currency, which has tended to accelerate since late in 1977, constitutes a favourable factor to parts exports from Taiwan, which is said to have come into a range from where it can reasonably expect to compete with Japan in saddles, tires, tubes, chains, rims, spokes, and so on.

Competitive situations in overseas markets other than the US will be briefly outlined below.20

In Canada, too, Taiwan is a formidable competitor. In 1973, a boom year for bicycles, Japan and Taiwan exported 280,000 and 150,000 units, respectively, but their relative positions were reversed by 1976, when 190,000 and 380,000 units, respectively, were shipped to Canada from the two countries.

Further, in Southeast Asia as well as the Near and Middle East, Taiwanese products established their dominance in the bicycle market from 1975 to 1976, seemingly putting an end to the Japan-Taiwan race in Third World markets as far as finished vehicles were concerned.

Since the need in developing nations is greater for low- and medium-grade bicycles than for high-grade ones, Taiwanese and Korean products are likely to continue to make massive inroads into these markets. In this context, the world bicycle industry seems to have come to a major turning point.

On the other hand, in the European market, where the bicycle industry is traditionally protected and fostered and where consumers' criteria of product preference are more stringent than in the US, Taiwanese and Korean bicycles are expected to find it more difficult to establish their presence. It therefore appears to be a more hopeful export market for Japanese-made bicycles and their parts.

As seen in Table 4, in which the trend of Japan's bicycle imports is also traced, finished-product inflows sharply increased from 1973 to 1974, totalling 140,000 units in the latter year, but they later decreased to a virtually negligible number, less than 10,000 a year in and after 1977. Parts imports, in contrast, steadily increased from 1972 on and reached ¥1,100 million in aggregate value in 1978. Their supply sources in 1978, as listed in Table 15, included Singapore, Taiwan, and such advanced nations as Italy and France. Imports from Singapore and the ROK are likely to increase in the future because of their low price level.


The foregoing review of the development of bicycle manufacturing in Japan after World War II has generally revealed, it is hoped, the historical background of the state of the industry today. The structural features of this industry are outlined below.

1. Localized Grouping of Smaller Enterprises

Out of the 1,175 establishments manufacturing bicycles and their parts in Japan, 783 or nearly 70 per cent are very small enterprises with 9 or fewer employees each, and only 9 establishments or less than l per cent are big businesses with 300 or more employees each, according to industrial statistics (Table 16).

The Japanese bicycle industry thus predominantly consists of medium- and small-scale enterprises, and these are clustered into localized groups in or around such big cities as Tokyo, Nagoya, and Osaka.

In a prefectural breakdown of annual shipments of bicycles and their parts (Table 17), the 4 prefectures of Saitama,21 Tokyo, Aichi, and Osaka together account for 60 per cent of the national total of finished products. Although bicycles are also produced in 13 other prefectures, these prefectures are not identified in the statistics because each has only one or two manufacturing establishments.

In an analysis by bicycle type, major geographical sources of production are Saitama and Osaka for utility items, Tokyo and Aichi for children's items, and Tokyo for light, sport, and specialty models.

Manufacturers of bicycle parts are geographically more dispersed ― in 34 prefectures of the country ― than those of finished vehicles (Table 18). Here again, however, shipments are concentrated in a few areas, with the 4 prefectures of Osaka (59 per cent), Aichi (8 per cent), Tokyo (7 per cent), and Saitama (4 per cent) combined accounting for 78 per cent of the national total. The concentration is thus more conspicuous than in the production of finished bicycles.

In the ranking of prefectures according to the combined value of finished bicycles and parts shipped out, Osaka comes first with a share of 46 per cent, followed by Tokyo with 10 per cent, Aichi with 8 per cent, and Saitama with 8 per cent, in this order, the four areas together responsible for almost all bicycles and parts shipped out of factories in Japan. Osaka above all constitutes the nation's leading bicycle production centre and emphasizes the manufacture of parts.

Bicycle manufacturing in Osaka historically evolved from the traditional techniques of gunsmiths and swordsmiths in Sakai City, which were adapted to tempering and cutting procedures in the production of bicycle parts. Since the manufacture of spare parts for repairing imported bicycles was started there about the turn of the century, Osaka has always been the biggest centre of bicycle production in Japan. Looking deeper into the localized group of medium- and small-scale enterprises manufacturing bicycles and their parts, one finds a highly developed system of social division of labour, which will be described in the following section.

2. Independence of Parts Manufacturers

It has been pointed out that the Japanese bicycle industry is divided into the finished-vehicle sector and the parts sector. Each has its own specialized form of production.

Most characteristic of the Japanese bicycle industry is that parts manufacturers are independent of, rather than controlled by, finished-vehicle manufacturers.

Essentially, the manufacturing of bicycles, like that of automobiles or watches, is a typical assembly industry. It would normally take the form of a pyramid with the parent assembly factory at its top and subcontracting parts makers at its base, but in Japan parts manufacturing did not begin with a deliberate objective of contributing to the commercial production of finished bicycles.

The history of bicycle manufacturing in Japan began with the repair of imported bicycles and the production of replacement parts for them. This led to the emergence of parts manufacturers22 and eventually developed into the manufacture of finished vehicles. Unlike in the automotive and chronometer industries, the technology of finished-product assembly could not play a decisive role in the development of bicycle manufacturing in Japan. For this reason, there was a delay in capital investments in the finished-bicycle assembly sector, resulting in a considerable lag in the start of large-scale systematic production.23

Especially in Osaka, the starting point was the production of replacement parts in cottage industries run by former gunsmiths and swordsmiths in Sakai. During the subsequent development, uniform standards were internationally prescribed for bicycle parts to establish interchangeability between the products of different manufacturers, and parts makers were thereby enabled to remain independent of, instead of becoming subordinate to, finished-bicycle manufacturers. Each component is thus expressly marked with the brand of its manufacturer.24

The standardization and interchangeability of parts further enables each of their manufacturers to supply many finished-bicycle makers with the same item. In other words, each component item is mass-produced by its manufacturers, and this productive structure prevents finished-vehicle manufacturers from undertaking integrated production, from individual components to finished bicycles, at competitive costs.25

Parts manufacturers are subject to a similar limitation. Even a major manufacturer produces on its own only a limited variety of specific parts;26 moreover in many instances one finished component is the outcome of a relay of different manufacturing procedures by a number of factories. The group making bicycle parts in Sakai, for example, consists of many medium- and small-size parts factories and related manufacturers densely clustered in a limited geographical area; these enterprises complement one another and are organized in an intricate network based on social division of labour and the parent enterprise-subcontractor relationship.27

A breakdown of bicycle manufacturing plants by product item (Table 19) shows that each item is now produced by only a few manufacturers, resulting in an oligopolistic structure for each finished component;28 but each manufacturer, as is evident from Table 16, is surrounded by many suppliers ranging in scale from medium size to very small. The Japanese bicycle industry thus has a highly developed system of social division of labour, and at the same time its structure prevents newcomers from participating in it.

3. Mercantile Capital-like Character of the Assembling Sector

There are two types of finished-bicycle manufacturers.

The first is known as "industrial type" manufacturers. They are capable of producing frames and other specific parts on their own and of achieving assembly by a modern system including a conveyor line.

The second is "factor type" manufacturers. They have no facilities of their own to produce parts and merely assemble parts purchased from outside.

Industrial-type manufacturers attach importance to the production of frames because they can more readily differentiate their frames from competitors' products and because a frame is a vital part of a bicycle. Each manufacturer produces at most two or three kinds of parts other than frames, such as forks, handles, and mudguards, but parts production is now increasingly left to specialized manufacturers, and a growing number of industrial-type finished-bicycle manufacturers hardly produce any parts but frames.29

A factor-type finished-bicycle manufacturer buys all components from specialized makers and puts them together into finished bicycles. Some factor-type manufacturers assemble fully finished vehicles, while others ship out partly (50 per cent or 70 per cent, for instance) assembled sets.30 Many of them also operate as wholesalers, distributing the products of finished-vehicle manufacturers or replacement parts.31

In the bicycle industry, the finished-vehicle assembly sector does not always need a technically massive production system. Manufacture of not only automobiles but even motorcycles requires a big factory because it involves production of engines and assembly of large, heavy parts. In contrast, assembly of bicycles is even simpler than the production of parts, so simple that it can be accomplished in a retail store. The raison d'etre of major finished-bicycle manufacturers may be regarded as consisting primarily of their marketing function. The high quality of a reputable brand is achieved by procuring quality products from parts manufacturers and does not necessarily depend on the technical capability of the assembler.32 In connection with the aforementioned independence of parts manufacturers, this mercantile capital-like character can be pointed out as a major feature of the finished-bicycle assembling sector.

4. Features of Marketing Structure

Marketing channels for bicycles are illustrated in the accompanying chart. Finished-bicycle manufacturers who assemble purchased parts, both of the "industrial" and of the "factor" type, have a wholesaling function. The most usual channel begins from parts manufacturers and goes by way of parts wholesalers to finished-vehicle manufacturers, local wholesalers, and finally to retailers. However, many small factor-type manufacturers are unable to buy individual components directly from their makers and instead repurchase them from major factor-type manufacturers.33

The difference between the marketing structure for bicycles and that of most other industries stems from the repair and final assembly functions of the retailers.34 While the repair function is important to bicycles, which are durable consumer goods used for comparatively long periods, bicycle manufacturers, unlike manufacturers of electrical home appliances, have no servicing arrangements of their own; instead, retailers take charge of repairing. Although the qualitative improvement of bicycles over recent years has resulted in a decreasing trend of repair needs, still the sale of one bicycle is believed to create several occasions for repair a year, and these constitute an important income source for retailers.

Flow Chart of Bicycle Marketing

Since specialized retailers have repair and assembly functions, department stores and supermarkets have been left behind in the selling of bicycles. However, since the improvement in quality of bicycles has served to reduce repair needs and the demand for bicycles has rapidly grown, typically in the mini-cycle-boom, supermarkets and department stores have increasingly come to handle bicycles, and this has intensified frictions with traditional specialized retailers. Bicycles sold by supermarkets and the like are delivered to them by delivery agents in a fully assembled state.

For supermarkets, bicycles are a fairly lucrative item in terms of earning efficiency per unit floor space and can serve as a lure to shoppers, although the margin of profit on bicycles here is estimated at about half that of specialized retailers. This untraditional channel of marketing, which goes via supermarkets, department stores, mail-order houses (advertising in daily newspapers), and so on, is referred to in the industry as the third route.

Although some of the factor-type finished-bicycle manufacturers have rapidly grown by depending mainly on supermarkets and/or other third-route clients, finished-vehicle makers are generally hesitant to expand their third-route sales because these customers are irregular in purchase volume and moreover make stringent demands on price.

Since finished-bicycle manufacturers, even those of the industrial type, depend on parts makers for a predominant part of their supply of components, the proportion represented by purchased parts in their overall product cost is as great as 50 to 60 per cent, while their direct labour cost is only 8 or 9 per cent. Their margin of profit varies widely from one bicycle type to another and is further greatly affected by the trend of demand, so that the market prices of bicycles are liable to decline in times of business recession.

Whereas parts manufacturers, too, sometimes offer their products at reduced prices to maintain their output levels in a depressed period, the rate of reduction differs from one manufacturer to another. Those offering more generous discounts are more likely to run into financial difficulties.

Purchased components usually account for 60 to 70 per cent of the cost of a bicycle produced by a factor-type finished-vehicle manufacturer, while the proportion of the direct labour cost is only about 6 per cent. Very small factor-type manufacturers rarely retain full-time assembly workers and usually have their products assembled on a piecework commission basis. For this reason, the proportion of their fixed costs is extremely small and therefore enables cottage manufacturers to survive recessions.35


1. Technological Stagnation Due to War

Bicycle production facilities were virtually non-existent in Japan during the final phase of World War II because they had been considerably damaged by air raids and because those that survived the bombing had been switched to production of war supplies.

To describe plainly what the Japanese economy was like in the summer of 1945, there were vast ruins of munitions production facilities which were no longer of any value, and on the other hand too many people were scrambling for what little consumer goods were left to them. To look at the surviving production capacities of consumer-related industries, in terms of proportion to the maximum prewar level, the textile sector had only 33 per cent, the ammonium sulphate sector 42 per cent, the paper sector 46 per cent, and the bicycle sector 20 per cent. Moreover, most of their remaining facilities were standing idle on account of their own obsoleteness scarcity of raw materials, and destruction of marketing mechanisms.36

It was nevertheless relatively easy to return munitions factories, which had gone out of use after the end of the war, to their original role of bicycle production, and this was one of the factors which facilitated reconstruction of the industry. The national total of bicycles owned, which had reached nearly 10 million units before the war, was only 5 million immediately after the war (Table 20), and many of them were in so miserable a state that ropes were wound around their rims in place of tyres. Accordingly there was an almost limitless demand for bicycles.37

Bicycle manufacturers who had survived the war had facilities, even though obsolete, which were usable for production of bicycles and parts, but raw materials were rationed and factory outputs were thereby limited. In the meantime, however, there evolved black market prices for ration coupons as well as black market supplies of materials, enabling manufacturers to produce more than their rations allowed. By that time, all kinds of material necessities of life had become available at (black) market prices, and bicycles were among the items most in demand.38

People would hardly question the price or quality, and all new bicycles put on sale sold like hotcakes. It was not rare for a person who bought a bicycle in the morning to get a flat tyre or to find its handle making strange noises before the end of the same day. Tyres and tubes especially, both made of rubber whose supply depended solely on imports, were treated like valuables. Although tyres and tubes were supposed to be rationed together with other parts, the supply of tyres and tubes versus that of bodies was so enormously unbalanced in reality that "bicycles without tyres or tubes" were marketed on both legitimate and shady channels.39

The authorized producer price for a bicycle, proclaimed by the Ministry of Finance and Price Agency, was successively raised from ¥310 in August 1945 to ¥895 in 1946, ¥3,200 late in 1947, and ¥6,300 in July 1948, but as it was thereafter uniformly fixed at ¥6,300 without distinguishing first-class products from inferior ones, conscientious manufacturers of established brands since prewar days suffered doubly. However, as inflation subsided in 1949, the bottom price became the official price, and prestige brands came to be sold with premiums. Then, from about the spring of 1950 on, only first-class products could be marketed at the official price, and second- or lower-class ones were priced below that level, from ¥4,800 to ¥6,000. Eventually, in March 1950, the price control was lifted and thereafter the producer price came to vary widely from ¥5,000 to ¥10,000, with a correspondingly wide range of retail price from ¥6,000 to ¥12,000 (the highest-class product complete with accessories was priced at nearly ¥20,000). Entering a period of free competition, the bicycle industry was about to undergo realignment.40

One of the notable trends during the early postwar period of governmental control was an increase in bicycles assembled by "factors" or wholesalers (sometimes retailers), and factor-type manufacturers accordingly recovered a significant part of their prewar influence. What was directly responsible for this trend was that, although there were rigid official controls on the price and rationed quantities of finished vehicles, parts were subject only to price control and there were no restrictions on buying components and assembling them into finished bicycles. This gave factors the room they needed to achieve substantial growth.41

On the other hand, some manufacturers who had previously specialized in production of parts began to assemble bicycles because finished-vehicle manufacturers were more favoured in the rationing of materials, but most of these manufacturers returned to their traditional trade of parts production as free competition was resumed.42

2. Participation of Former Major Munitions Plants

One of the major postwar developments was the participation and temporary holding of important positions in the bicycle industry by former munitions factories, which had had no part in this sector before World War II.

These munitions plants were deprived of their facilities directly intended for production of war supplies, but they still had precision machine tools and skilled technicians to operate them, although both now had to stand idle day after day. These factories moreover still held in stock considerable quantities of materials including Duralumin and steel.43

The former munitions makers which after the war suddenly switched to the peace industry of bicycle manufacturing were referred to in this sector as "converted makers." They included such major enterprises as the Tsu machinery works of Mitsubishi Heavy Industries, the Gifu works of Kayaba Industry, Nihon Kinzoku Sangyo, Nakanishi Kinzoku, Handa Kinzoku, Fujikoshi Kozai, the Ota works of Fuji Sangyo, Takasago Tekko, Amatsuji Kogyo, Katakura Kogyo, Nishinihon Kogyo, Nakayama Taiyodo, Daido Seiko, and Daiwa Boseki.44

The participation of these converted makers in the bicycle industry, which in prewar days had had no more than a half-dozen major manufacturers of finished vehicles, including Miyata Seisakusho, Dainihon Jitensha, and Okamoto Jitensha,45 exerted considerable pressure on the traditional manufacturers for a certain period of time.

Strictly speaking, it was not until around the postwar year of 1949 that Japanese manufacturers of finished bicycles departed from their traditional factorlike way of producing to order, instead set their own standards, each putting its own unified mark on its products, and began to produce in competition with one another.46

The participation of converted makers undeniably stimulated this development, especially in the technological aspect.47

The fact that the bicycle plants in 1947 were generally of a greater scale than those in the prewar peak year of 1937 (in 1947 there were 69 plants with 100 or more employees each, in contrast to 22 in 1937; see Table 21) is considered attributable only to the participation of converted makers.48

In the allocation of finished-bicycle production quotas by the Ministry of International Trade and Industry for the first and second quarters of fiscal 1949, the so-called converted makers were allowed to produce 106,000 vehicles, accounting for 38 per cent of the total output. The inroads made by the converted makers caused some observers to expect a growth in the scale of bicycle production, but the subsequent development was contrary to this expectation.49

Tha converted makers, who shook the postwar bicycle industry, successively retreated from this sector with only one exception.50

As the system of controlled economy was replaced by that of free competition, resulting in the revival of "factors," factor-type manufacturers of finished bicycles applied pressures on converted makers, who had entered the bicycle market with great industrial capital. The latter were faced with problems arising from their difficulties in transactions with parts manufacturers and the weakness of their marketing machineries, and found themselves unadaptable to the peculiarities and structure of the bicycle industry that were the outcomes of its unique process of development.

Moreover, the outbreak of the Korean War in June 1950 and the ensuing boom of special procurements by the US Armed Forces gave the converted makers a good opportunity for reconversion.

3. Promotional Subsidy and Technological Development

The technological progress of the Japanese bicycle industry after World War II cannot be duly assessed without referring to the subsidy for promotion of the bicycle industry derived from the profits of bicycle races and the promotional activities financed therewith.

The Bicycle Racing Law promulgated in August 1948 defined the purpose of the subsidy: "to contribute to improving and increasing the production and export of bicycles, and satisfying the domestic demand therefor, and at the same time to increase the revenues of local governments."51 Thus a legal basis was laid for channelling state funds, out of earnings from bicycle races, into the bicycle industry. For this sector, which, unlike many key industries, had never enjoyed state protection, the institution of the promotional subsidy was a major event that cannot be overlooked in tracing the reconstruction and development of the industry after World War II.52

The purposes of the subsidy were classified into four main categories, which covered the activities detailed below.53

1) Improvement of bicycle production techniques and product quality: (a) import and performance study of foreign bicycles, (b) compilation and distribution of both domestic and overseas patent information concerning bicycles, (c) testing of bicycle equipment and product performance, (d) financial assistance to bicycle-production facilities, (e) financial assistance to research in bicycle-related industries, (f) financing of research on machinery, (g) financial assistance to tests for implementation of inventions concerning bicycles, (h) establishment of a bicycle testing system, (i) standardization of bicycle manufacturing, (j) financing of export inspection, and (k) financing of bicycle performance tests.
2) Promotion of bicycle export: (a) overseas dispatching of field-survey personnel, (b) surveying of first-hand information from overseas, (c) distribution of sample bicycles for overseas publicity, (d) production and distribution of catalogues in English for overseas publicity, (e) circuit displaying of bicycles, etc., in overseas markets, (f) production and distribution of films for overseas publicity, (g) financial assistance to international exhibitions of machinery for export, and (h) financial assistance to participation in overseas trade fairs.
3) Guidance of rationalization efforts by smaller bicycle manufacturers: (a) surveying of the current state of the bicycle industry, (b) a campaign for standardization of bicycle retailing practices, (c) financial assistance to facilities for joint use by smaller bicycle manufacturers, and (d) financial assistance to guidance of efficiency diagnoses of smaller bicycle manufacturers.
4) Loans to the bicycle industry. These were extended to manufacturers by the Smaller Business Finance Corporation through the Bank for Commercial and Industrial Cooperatives and 11 city banks.

As shown in Table 22, a total of ¥38,800 million was provided as promotional subsidy to the bicycle industry during the three decades from 1949 through 1978, and out of this total 48 and 26 per cent, respectively, were spent for improving production techniques and rationalizing bicycle manufacturing. The contribution of the subsidy to the technical progress of the bicycle industry will be briefly described below.

During the five years from 1949 (when the promotional subsidy was instituted) through 1953, about ¥2,000 million, a tremendously generous sum at that time, was directly drawn out of the national treasury to subsidize the bicycle industry. Mainly used for loans both to the industry as a whole and to individual manufacturers, these funds are considered to have played a major role in filling the technological gap which had resulted from wartime stagnation.

The blueprint for steps to promote the bicycle industry, which could by no means be taken by individual manufacturers ― including making up for wartime delays in production techniques and loss of overseas markets, raising the output level of domestic production, and surveying the actual marketing structure and modernizing it ― was mapped out in this period, and the effects of these steps permeated the industry like water irrigating drought-stricken farm land. Many products and techniques which are now commonplace, such as the step spoke, light alloy rim, padded tube, tapered tube and high-frequency rubber vulcanization, were studied and developed for practical use under the subsidized promotional projects in those days. The local production and marketing, from about 1951 on, of road racers, unprecedented in Japan though already commercially available in Europe, were made possible by the development of techniques to manufacture their parts. The "research on techniques to produce electro-unite steel tubes for bicycles" commissioned to Toshiba Kokan in 1950 contributed to the subsequent widespread use of electro-unite tubes in Japan.54

In September 1954 the Open Research Centre for Bicycle Production Techniques was established in borrowed space in the Nagoya Industrial Science and Technology Laboratories of the Agency of Industrial Science and Technology as a common facility of the industry for improving its bicycle production techniques. Financed with the promotional subsidy, two test plants were built, equipped with necessary machinery and instruments, and staffed by qualified research personnel. The centre undertook studies on all aspects of production techniques related to bicycle manufacturing, including materials, plasticizing, joining, painting, and plating, and their results were made public. Branches of the centre were established in Tokyo and Osaka to give guidance to manufacturers.55

The Open Research Centre in October 1958 was reorganized into an independent body by the name of the Bicycle Technology Research Foundation. With its integrated research laboratories in Nagoya and guidance service stations in Tokyo and Osaka, the foundation was supposed to function as a technical centre to engage in research projects for qualitative improvement and cost reduction of bicycles and further to make widely known, and extend guidance in the utilization of, the fruits of these projects.56

In June 1968 this Bicycle Technology Research Foundation moved to a newly acquired 40,020 m2 site in Inuyama City, Aichi Prefecture. In September 1971 the guidance service stations in Tokyo and Osaka became branches57 under the unified control of the foundation, and have since remained in this status.

The role played today by the foundation together with its Osaka Branch is evaluated below by the Osaka Prefectural Government in its Jiba Sangyo Gijutsu Jittai Chosa Hokokusho:

Blessed with a relatively ample supply of funds, they have fairly sophisticated equipment and instruments. Besides seeking technical advice and commissioning tests or processing, individual enterprises participate in technical discussion meetings (on bicycles, dies, and environment) with a view to acquiring information on new techniques and selecting themes for joint development projects. Development of specialized machines, which can lead to the evolution of new production techniques, is undertaken by machine-tool manufacturers as well as by principal bicycle makers, and thus technology transfers sometimes take place through the introduction of new equipment or machinery. Even in such cases, however, experimental activities at the Bicycle Technology Research Foundation seem to play an important role.58

4. Institution of JIS and Transformation of the Finished-Bicycle Assembling Sector

Since bicycle production in Japan began with local manufacturing of British bicycles and their parts, then holding the biggest share in the world market, it extensively conformed to the British Standards (BS) from its earliest days. Even today, in spite of the general use of the metric system, the Japanese Industrial Standards (JIS) on bolts, steel balls, and dimensions of fitted parts all follow their British counterparts in "inch sizes translated into metric expressions."59

In 1949, the JIS system came into being as the Industrial Standardization Law took effect, but it was not until 1953, as indicated in the following chronology,60 that the JIS marking system (under which, on the basis of Article 19 of said law, manufacturers are authorized by the state to put JIS marks on the products of their factories) began to be applied to bicycle factories.

Months and Years in which the Bicycle or Its Parts

Became JIS-Designated Items

December 1953: Rims, spokes, chain

February 1955: Chain wheel and cranks, pedals, free wheel, hub sprocket

May 1956: Rim brakes, hub brake, handle, hubs, coaster hub

May 1957: Frame, front forks

July 1958: Mudguards, saddle

June 1960: Bicycle (finished product)

1960: The number of factories producing 16 principal component items and authorized to put on JIS marks reaches 235 (out of 379 factories turning out such items).

1961: In connection with the JIS designation of finished bicycles, retailers' skills begin to be tested and bicycles bearing the JIS mark begin to be screened.

1962: Shipments of fully assembled bicycles begin. Application of JIS to finished bicycles enters the implementation stage.

As briefly reviewed above, the JIS designation of the bicycle and its parts began in 1953, first covering such capital-intensive items as the rim, spoke, and chain, which had already been produced by highly mechanized and automated processes. Then from 1955 to 1956 it extended to such technology-intensive items as the chain wheel and cranks and free wheel, whose production processes mainly consist of machining and assembling. It further proceeded in 1957 to such skill-intensive items as the frame and front fork, which are primarily produced by metal processing and joining. Finally in 1960 it arrived at the finished bicycle.

The delay in the JIS designation for a finished bicycle produced by assembling a large number of components was due to a difficult problem peculiar to bicycle manufacturing.61 By about this time, finished-bicycle manufacturers in many cases refrained from fully assembling their products in their own factories; instead, they packaged sets of all the required parts and accessories and distributed them through local wholesalers to retailers, who assembled the sets into finished bicycles in their shops. Had the manufacturers fully assembled bicycles, they would have needed large work forces and factory space because of their inadequate equipment. Fully assembled shipments would have been greater in cubic measure, cost more to transport, and been more cumbersome to handle; retailers would have lost assembling commissions, which constituted a large part of their earnings.62

If we regard assembly of finished bicycles as a step in the manufacturing process, the retail store in which the assembly is done can be deemed a part of the factory. Accordingly, for the finished bicycle to be authorized to carry the JIS mark, the retailer assembling it had to be officially recognized as a technician capable of assembling a bicycle bearing the JIS mark, and for this reason it was decided to screen and qualify technicians to assemble finished, JIS-designated bicycles.63

After extensive preparations, including technical qualification tests and technical training sessions held by the Japan Bicycle Testing Society for over 60,000 bicycle retailers in the country, the finished bicycle became a JIS-designated item in June 1960, and it was in May 1962 that JIS-designated finished-bicycle factories came into being.64

Meanwhile, since JIS requirements on finished bicycles had in any case been set forth and US-bound exports of fully assembled vehicles began to increase in 1960 or 1961, major manufacturers decided on a new policy of shipping finished bicycles that had been fully assembled in their own factories. From 1962 on, most manufacturers of finished vehicles shipped fully assembled products on a regular basis.65 Major manufacturers of finished bicycles quickly strengthened their assembly function by introducing belt conveyors, French-made wheel-assembling machines, and the assembly-line system with a view to expanding their mass-production capabilities and marketing networks. For instance, Bridgestone Cycle and Yamaguchi Jitensha tried to achieve monthly sales of 30,000 and 50,000 units, respectively, the former by introducing a die-cast process and the latter by expanding its sales network. Modifying their marketing policies, they further endeavoured to develop new markets by separating their sales departments as independent companies, actively strengthening their sales agents, and extending marketing guidance to retail stores.66

Not to be overlooked in this connection are the ties between major manufacturers of finished bicycles and integrated trading companies or big industrial interests, which became more conspicuous in this period. To expand their markets, Miyata Seisakusho joined hands with Mitsui & Co., Dainihon Jitensha with C. Itoh & Co., Nichibei Fuji Jitensha with Tokyo Shokuhin, and Welby with Marubeni-Iida, all for co-operation in sales activities, and a capital link was formed between Miyata and Matsushita Electric Industrial Co. to strengthen the former's mass-production capabilities.67

Another notable factor was the development of techniques for packaging-assembly. By the time US-bound exports of finished bicycles began to increase in or around 1960, American importers had established the practice of accepting only separate corrugated fibreboard packages of one bicycle each, but not those of half-dozens or dozens together. Japanese exporters therefore hastened to develop, and put into practice, techniques for single-bicycle packaging-assembly, and this also greatly contributed to rapid and radical changes in the domestic situation.68

Retail stores, which had previously served as final assembly and repair shops, found it more lucrative to develop new needs than to count on assembling commissions, partly because of the aggravating shortage of manpower. Those in urban areas especially began to reorganize themselves from repair shops into modern sales stores.

This trend induced finished-bicycle manufacturers to further step up the scale of their production and accelerated the tendency of bicycle manufacturing toward concentration. Reflecting this tendency, the number of such manufacturers shrank from over 190 in 1958 to below 100 by 1969, as indicated in Table 19.

Notably, in the course of the development reviewed above, the position of factor-type manufacturers gradually weakened. As stated previously, factors revived after World War II, and in 1955 shipments by factor-type manufacturers of finished bicycles accounted for 70 per cent of the overall national total, while those by industrial-type manufacturers represented 30 per cent.69

The relative positions of the two types became about even by 1962 and were reversed by 1969, when the former's share was 30 per cent and the latter's was 70 per cent.70 Along with the aforementioned increase in the proportion of shipments of assembled bicycles by finished-vehicle manufacturers instead of sets of unassembled parts, factor-type manufacturers, most of whom were smaller-scale enterprises, found it difficult to introduce the conveyor system; unlike industrial-type manufacturers, who increasingly used conveyor-based assembly lines, they became almost unable to ship out assembled products, partly on account of the intensified shortage of manpower.71

5. Technological Development and Stratification of the Bicycle-Parts Industry

As already stated, the technological progress of the Japanese bicycle industry was prevented during World War II, and in the postwar reconstruction period of 1945-1950 when economic activities were still under state control any bicycle that was produced could be immediately sold in spite of its low quality resulting from obsolete production equipment and techniques.

In its first postwar white paper on industrial technology, entitled "The Situation of Industrial Technology in Japan" and published in November 1949, the Industrial Technology Agency of the Ministry of International Trade and Industry discussed the technological lag of the Japanese bicycle industry, above all its parts-manufacturing sector, as quoted below.

Japanese bicycles in the past were nothing more than superficial copies of foreign products. Although this circumstance contributed to the prosperous export of bicycles in the form of unassembled parts, which are exchangeable with the corresponding ones of British-made bicycles because Japanese standards on bicycle parts were set dimensionally identical with the British, at the same time it not only invited inadequate strength and hardness but also suppressed Japanese manufacturers' intitiave in qualitative and structural improvements. These adverse effects are clearly seen when Japanese and British bicycles are compared.

Structurally viewed, Japanese products lack transmissions and dynamo hubs, which have recently become particularly common on British vehicles. Japanese bicycles have virtually no variety.

The Japanese industry lags behind in manufacturing techniques as well. For example, plating, which accounts for 23 per cent of the total manhours spent in bicycle production, heavily depends on manual work because automatic buffing machines are rarely used, and the conveyor-based automatic plating system capable of accomplishing the whole plating process from degreasing and water-washing to plating as such and drying is not so widely used either. In the machining stage, which takes up 35 per cent of the total manhours, automatic machines including automatic feeding presses and automatic thread-cutting machines are still uncommon. While this backwardness in part derives from economic disadvantages and other understandable circumstances, in view of the fact that foreign competitors, above all the British, are achieving remarkable development encouraged by postwar export drives and are steadily building up their superior positions both in product quality and price, Japanese manufacturers are called on to modernize their equipment.72

As this white paper also suggested, the immediate goal for Japanese bicycle manufacturers, both before and after the war, was to catch up with their British counterparts.

In 1949, 33 units of the most up-to-date models of British-made bicycles were purchased. The imported British bicycles were sport and light models. Their frames were built of special steel pipes to reduce their weights. The bicycles had calliper brakes, epicyclic gear or hub gear-derailer variable transmissions, and/or WO rim tyres. From the processing point of view, such sophisticated techniques were used as press punching for gear teeth and cold forging for the bracket axle. The surface was finished by bright electroplating or with metallic paint, and the finish on invisible parts was dispensed with. All these features seemed to embody thorough rationalization efforts.

Both the calliper brakes and variable transmissions had been theoretically known since before the war and even produced on a trial basis in Japan, but, looking at bicycles actually equipped with these devices, Japanese engineers renewed their awareness of the long blank from before to after World War II.

Japanese bicycle manufacturers joined hands and accelerated their research and developmental endeavours. They imported and carefully analysed the most up-to-date bicycles from Switzerland, France, and Italy. To make Japanese bicycles marketable in the world, they had to catch up with the Europeans, who were far ahead of them, and eventually outstrip them.73

In the Japanese bicycle industry, every component manufacturer specializes in one or a few items. As the postwar curbs on economic activities were lifted and the free enterprise system revived, parts manufacturers, each independent of others, competitively undertook technological development and equipment rationalization with a view to filling the aforementioned wide technological gap which then existed between them and advanced bicycle manufacturers abroad. From 1960 on, since the intensified shortage of manpower resulted in an increased need for cost reduction through productivity enhancement and the institution of JIS on bicycle parts74 served to accelerate unification of standards, it became easier for each JIS-authorized factory to produce a limited variety of items in large quantities; rationalization of equipment was thereby given added impetus.

In 1960, US-bound exports of Japanese bicycles began to increase, and in 1967 the overall value of bicycles exported from Japan surpassed that from the UK (Table 2). It was in this period that the mainstream of Japanese-made bicycles shifted from utility items to higher-grade models - light and sport bicycles - requiring more sophisticated technology, and in the course of this shift the technological level of Japanese bicycle-parts manufacturers did overtake and outstrip that of the previously more advanced manufacturers in other countries. Because of the vast variety of bicycle parts and the difference in technological development orientation from one sector to another, it is difficult to draw an overall picture of the technological progress which took place in the industry, but an attempt will be made below to outline it mainly on the basis of a survey made on bicycle manufacturers in Osaka in this period75 - a review of a ten-year period back from 1968 - with supplementary reference to the finding of recent hearings (in Sakai City, Osaka) and other data.

a. Continuous Automatic Painting System

Every stage of the painting process had been manually accomplished, but in or around 1955 automatic painting systems began to be used. They were electrostatic spray painting machines, which not only consumed less paint and afforded better finish than previously used tools but also helped treble the productive efficiency.

b. Continuous Automatic-Plating System

Only a handful of better-off bicycle manufacturers can afford to have plating equipment of their own, and minor manufacturers usually job out plating needs to specialized firms. Since the 1960s, major manufacturers of bicycle parts have equipped themselves with continuous automatic-plating machines, which have the following advantages over previously used semi-automatic devices: (1) As they require no heavy labour, they can be handled by female workers alone, (2) the productive efficiency is trebled without expanding the work force, and (3) the product quality is improved.

c. Cold Forging

Among bicycle components, not a few items require forging, such as shafts, the adjusting cup, flanged cut, and free wheel. Forging had previously been achieved by a hot process, but in 1960 a major parts manufacturer76 developed its own cold-forging technique and in 1964 introduced automated cold-forging knowhow and a system under a technical licence arrangement with Brown Engineering Company of the US to further advance rationalization of its production process. This triggered extensive use of cold forging, which was an epochal new technique,77 greatly contributing to improvement of product quality, saving of materials, reduction of production steps required, and amelioration of the working environment.

d. Automatic Processing Machines

During the 1960s, individual manufacturers made active automation attempts, each on its own. Many companies tried to develop machines for their exclusive use and, out of 89 surveyed, 54 companies or 61 per cent had succeeded in working out automatic machines of their own design. Virtually all manufacturers with 30 or more employees developed automatic machines for almost all kinds of bicycle parts. What had previously needed two workers could now be handled by only one, and what had depended on male labour could be accomplished by female hands, to cite but a few examples of the resultant labour saving.

e. Besides these improvements in the production process, the swaging machine (to taper the ends of round steel rods) was introduced for shaping the front forks, which previously had had to be pressed. Quenching for greater sturdiness and durability began to be used, and this also contributed to improved product quality. Hydraulic power came to be extensively employed to replace manual force. In the free-wheel fabricating process, hobbing machines were replaced by large presses, bringing about an estimated tenfold increase in processing efficiency.

Underlying these technological developments and equipment rationalization in bicycle-parts manufacturing were the contributions of the aforementioned subsidy for promotion of the bicycle industry. It is also worthy of note that government support was extended to other aspects as well in the framework of the Law for Promotion of Modernization of Smaller Enterprises, under which the bicycle-parts industry, except its rim and chain sectors, was singled out for a privileged position.78

Thus, throughout the phase of transition from utility vehicles to light and sport models, technological development and rationalization of equipment made progress in bicycle-partss production, and this process was accompanied by a structural change in the bicycle industry.

It has already been pointed out that finished-bicycle manufacturers grew in scale of business and their number decreased as a result of the concentration of production into the hands of fewer makers (see the preceding section). In the parts industry, too, the number of manufacturers decreased in every sector as indicated in Table 19, and production concentrated into larger companies.

Looking at the trend of bicycle and parts manufacturers classified by the number of employees (Table 23), the total number of factories continually decreased as years went by, from 1960 to 1965 and further to 1970. This reflects the withdrawal of many manufacturers who failed to adapt themselves to the changes which took place as well as the resultant restructuring of the industry.

While small manufacturers with 29 or fewer employees each registered a decrease in absolute number and a slight increase in relative share over the 1960-1970-1975 period, middle-class manufacturers with 30 to 99 employees each decreased in both absolute and relative terms, and no significant change was observed in the upper brackets with 100 or more employees each.

Over the same period, the number of employees decreased on an industry-wide basis, and the decrease was particularly conspicuous in the middle class while there was an increase in the upper strata.

Concentration into bigger manufacturers was more evident in the value of products shipped. To sum up, it is clearly seen that the bicycle industry was restratified into upper and lower layers at the cost of the middle class.

There was also a change in the relationship between the manufacturers of finished parts and those producing subparts on a subcontract basis. Major parts makers followed the policy of concentrating their own productive forces on those items they had developed that involved sophisticated knowhow and jobbing out labour-intensive items requiring more manpower.79 Underlying the firmly established presence of small manufacturers referred to above, there seems to have been this change in the pattern of social division of labour within the parts industry.

6. Themes of Technological Development

We have seen that the Japanese bicycle industry, in its process of departure from concentration on utility vehicles and diversification into the areas of light and sport models, and further into children's and ladies' items and mini-cycles, from 1960 on achieved remarkable progress in technological development and equipment rationalization, and this progress provided the technological basis for its subsequent great leap from the second half of the 1960s to the 1970s.

From 1977 to 1978, a survey was made on the technological situation of bicycle-parts manufacturers in Osaka Prefecture, and the author had an opportunity to participate in the discussion of the findings of the survey. Mainly on the basis of the report on this survey,80 the circumstances and themes of technological development in the bicycle industry during recent years will be analysed in the rest of this paper.

It is necessary to look at some notable developments in a number of more important sectors of parts production before attempting an overall evaluation.

1) Frame: The frame is made by cutting pipe material, partially machining the cut segments, assembling them by welding and other means, painting, and finishing the assembled product. In this sector, which has been divided into small manufacturers engaged in assembling of subparts and big manufacturers specialized in fairly large-scale painting and finishing processes that have been nearly all automated since the early years, technological development has been achieved primarily in the following areas.
a. There has been a diversification of pipe materials from cast iron alone to high-tension steel, special steel, and light alloys. To meet the need for reduced weight, frequently used are chromium-molybdenum steel pipes ranging in thickness from 0.8 to 1.0 mm, which cannot be treated or machined by the skills of traditional craftsmanship.
b. In the machining and assembling process, too, remarkable progress has been achieved by the introduction of cold squeezing and various welding techniques to replace traditional filing and brazing (both requiring considerable skill).
c. In finishing as well as in painting, both methods and production technology have been improved, resulting in more advanced levels of continuity and automation.

2) Handlebars: Pipes are cut, machined, plated, and then assembled into handlebars. The individual steps, which were previously accomplished almost as a handicraft, have been transformed as described below.
a. Special cutting and machining devices have been developed to reduce the dependence on craftsmanship.
b. The plating process, which, including polishing, is of considerable importance, was previously carried out in a rather primitive way, but is now developing in the direction of automated continuous processing.

3) Chain wheel and cranks, hubs, free wheel, etc.: Various materials have to be pressed, machined, and/or forged to make these items, which moreover require particular precision and strength since they are rotating parts. As they involve much machining and complex assembling, they were previously considered difficult to mass-produce. The introduction of the cold-processing technique brought about the greatest change in this subsector. Thus, the complex process consisting of forging, pressing, machining, and heat treatment has been replaced by a much shorter one of heat treatment, surface finishing, and cold forging (press work), which moreover can produce all these components at the same time. This change gave rise to a new procedure of metal mould preparation for pressing, in which electro-discharge machining emerged as an important technique in addition to the conventional machining.

4) Brakes, pedals, etc.: This subsector used to mainly comprise assembly of many different subparts (about 90 kinds for a brake alone), supplemented by manual machining of a few main sub-items.
a. Here again, mass production was achieved by cold processing of main sub-units and by labour saving through the introduction of automatic machine tools.
b. Division of labour and flow process have begun to be introduced into the assembly stage, which has long been accomplished by unskilled workers (including women) in a cottage-industry fashion.

5) Rims, spokes, etc.: Since these components are relatively simple in shape, although they require strength and some precision techniques, their fabrication process was readily mechanized. Accordingly, their manufacturers are keenly interested in automation through development of specialized machines and also are greater in scale of business.

We have seen that, according to the characteristic features of individual component items, emphasis is placed on different technical problems and that this difference leads to technological gaps and differentiation between stronger and weaker manufacturers.

It seems necessary, as a premise to considering technical problems of the whole bicycle industry, to identify common aspects of the production of diverse components together with the individuality of each subsector.

1) First, there are such cross-sectional themes as automatic production of parts, cold processing, rationalization of the assembly procedures, and automation of finishing procedures including painting and plating, all of which are related to labour saving, together with development of new materials, improvement of accuracy, and development of related machine tools. These are matters of hard technology development and are expected to facilitate directly the improvement of product quality, mass production, and cost reduction.

2) There also are problems of soft technology development including design improvement, choice of new vehicle types for new areas of demand, execution of quality control, and control of production and inspection procedures to meet the requirements of both domestic (JIS) and export standards.

3) Important problems of a so-called "external" nature include those of environment-related technology. Noise in processing (especially press work and forging) and machining stages, foul solution discharged from plating shops, and problems related to the use of oil common to all kinds of metalworking are of particular consequence to this industry which involves many smaller factories located in the midst of residential districts.

In the technological development of the Japanese bicycle industry after World War II, the Bicycle Technology Research Foundation played an important part (see chapter III.3), and, with respect to process-control techniques related to standardization, the Vehicle Inspection Society performed a central role in technology transfer through its guidance and promotional activities directed to individual manufacturers. Virtually all major manufacturers have acquired JIS qualification, and some are qualified under foreign industrial standards on their own. Thus the bicycle industry seems to be relatively blessed with the requisites for technological development. Yet the following questionable aspects have to be pointed out.

1) There still are wide gaps ― technological gaps ― between stronger and weaker manufacturers. Certainly these gaps in part stem from the difference in the kind of component produced, but on the one hand major enterprises have large research staffs ― having something like a ¥1,000 million annual budget for its research and development activities as well as access to technical information overseas ― while on the other hand the smallest enterprises, operating at a cottage-industry level, are suffering from rising labour costs and intensifying objections to noise emission. Although there is no trend for the bicycle-parts industry as a whole to become subordinate to the finished-vehicle sector on a subcontracting basis, there does exist a trend within the parts sector for some manufacturers to become subcontractors to others.

2) The competition in the export market from late participants including Taiwan and Singapore seems to have been coped with, as in other industries, by the orthodox strategy of cost reduction through labour saving and automation, coupled with further sophistication of products. A fundamental problem may be whether or not this orthodox strategy alone can ensure success. It is true that the technological potentials and technical skills possessed by the bicycle-parts industry are up to remarkably high standards. But it is necessary to propagate these potentials to other areas or to further diversify the products of the industry. While some manufacturers are already moving ahead in this direction, institutional arrangements are needed to assess accurately the needs of today's society and provide appropriate guidance and advice based on comprehensive information.

3) The Bicycle Technology Research Foundation certainly is playing an important role, but it seems to have some problems common to many public research bodies. For example, its research staff is not large enough to effectively utilize its equipment, no conscious efforts are made on the management of research activities, and it is difficult to recruit and maintain technicians skilled in the handling of sophisticated equipment and instruments, which therefore have to be operated by researchers. Contacts with skilled personnel in private enterprises have to be strengthened and other steps have to be taken to solve these problems.

4) Developmental activities in the so-called soft technology area are not necessarily animated. Computers probably can be used for process control, automation, and related purposes, but they will prove even more useful in such software aspects of rationalization as control of the assembling procedure and appropriate inventory control in the network of small manufacturers.

Labour saving and qualitative improvement of products are by no means unimportant, but technological problems in a broader sense of the term seem to remain unsolved in the area of business administration including production control. While a number of manufacturers may have already achieved unique results in this respect, efficient production of many different items in small lots, among other things, is likely to prove an important task to accomplish from now on, especially for small enterprises.

TABLE 1. Relative Position of the Bicycle Industry among All the Japanese Manufacturing Industries in 1977

TABLE 2. Annual Exports by Major Bicycle-Exporting Countries

TABLE 3. Annual (finished) Bicycle Outputs of Major Exporting Countries

TABLE 4. Japan's Annual Bicycle Outputs, Exports and Imports

TABLE 5. Japan's Annual Output of Finished Bicycles

TABLE 6. Japan's Annual Bicycle-Parts Output Classified by Item

TABLE 7. Japan's Annual Bicycle-Parts Output Classified by Item

TABLE 8. Japan's Annual Bicycle-Parts Exports Classified by Item

TABLE 9. Japan's Annual Bicycle Exports (finished vehicles and parts) Classified by Region of Destination

TABLE 10. Japan's Annual Bicycle Exports (finished vehicles and parts) Classified by Country of Destination

TABLE 11. Ratios of Finished Bicycles to Parts in Annual Exports from Japan, Classified by Region of Destination

TABLE 12. Values of Japan's Annual Bicycle Exports

TABLE 13. Competitive Situation of Imported Finished Bicycles in the US Market

TABLE 14. Competitive Situation of Imported Bicycle Parts in the US Market

TABLE 15. Japan's Finished-Bicycle and Parts Imports in 1978 Classified by Geographical Source

TABLE 16. Japan's Bicycle and/or Parts Factories in 1977, Classified by Work Force Size

TABLE 17. Prefectural Breakdown of Bicycles and Parts Shipped Out of Japanese Factories in 1977

TABLE 18. Prefectural Breakdown of Bicycle Parts, Fittings, and Accessories Shipped Out in 1977

TABLE 19. Changes in Number of Bicycle and Bicycle-Parts Factories in Japan, Classified by Item

TABLE 20. Bicycles Owned in Japan (in thousand units)

TABLE 21. Comparison of Prewar and Postwar Composition of the Bicycle Industry, Based on Classification by Number of Employees per Factory

TABLE 22. Sums Granted under the Bicycle Industry Promotional Subsidy System (in thousand yen)

TABLE 23. Statistics on Japanese Bicycle and Bicycle-Parts Manufacturers, Classified by Number of Employees per Factory


1. According to industrial statistics, the manufacturers of bicycles and/or bicycle parts in 1977 had altogether 1,175 offices and factories with 21,719 employees, and shipped out products totalling ¥284,400 million in value. In any one of these respects, the bicycle sector held a less than 0.2 per cent share in the whole manufacturing industry. For further details, see Table 1.

2. According to UN trade statistics, bicycle exports (including parts) from Japan totalled $114.19 million in 1975. The world major bicycle-exporting countries, following Japan, are France, the UK, West Germany, and Italy. For further details, see Table 2.

3. The number of finished bicycles manufactured in Japan in 1978 was 5.9 million, second only to the 7.3 million manufactured in the US. The other major bicycle-producing countries are mostly in western Europe, such as West Germany, France, the UK, and Italy. The Soviet Union and India now produce more than Britain, once the king of the bicycle-manufacturing world. For further details, see Table 3. Recently Taiwan and the Republic of Korea have been rapidly expanding their bicycle output and becoming major competitors of Japan in the US market. See chapter 1.3.

4. Ryutsu Keizai Kenkyujo, Jitensha Ryutsu Bumon no Jittai Chosa Jigyo Hokokusho [A report on the research project on the situation of the bicycle-marketing sector], 1972, p. 149.

5. Tetsuo Minato, "Jitensha" [Bicycles] in Chusho Kigyo Kin'yu Koko Chosa-bu, Osaka-fu ni okeru Shuyo Chusho Kigyo no Kihon Kozo to Mondaiten [Basic structures of and problems in main medium- and small-scale enterprises in Osaka Prefecture], Part 2, V, p. 59. The book will hereinafter be referred to as Problems.

6. Jitensha Sangyo Shinko Kyokai, Jitensha no Isseiki: Nihon Jitensha Sangyoshi [A century of bicycles: a history of the bicycle industry in Japan], 1973, p. 466. The book will hereinafter be referred to as A Century.

7. Ibid., p. 448.

8. Problems, pp. 60-61.
9. Ibid., p. 62.

10. Ibid.

11. Bicycle parts are classified by various criteria.

a. As constituent elements of a bicycle as a machine, they are classified into the following four categories. (1) Power receiving parts: pedals, cranks. (2) Power transmitting parts: chain sprocket, chain, free wheel or hub sprocket. (3) Working parts: wheels (hubs, spokes, rims, tyres). (4) Supporting parts: skeleton frame, front forks, saddle, handlebars.

b. The Japanese Industrial Standards classify bicycle parts into the following five categories according to the position in which they are used. (1) Body: skeleton frame, seat pillar, seat pillar pin, lamp bracket, front forks, head set, bottom bracket set, mudguards. (2) Driving mechanism: chain wheel and cranks, free wheel, pedals, chain. (3) Braking and steering mechanisms: rim brakes, hub brake, handle, handle grips, saddle. (4) Wheels: rims, spokes, hubs, tyres, inner tubes. (5) Others: crank cotter pin, chain adjusting bolt, gear case, bell, luggage carrier, stand, reflectors, air pump, lock dynamo lighting set. Jitensha Sangyo Shinko Kyokai, Jitensha Jitsuyo Binran [Practical handbook of bicycles], 3rd ed., 1977, pp. 12, 19.

c. There was a report in 1961 classifying bicycle parts into three categories - a small variety of mass-produced items, a large variety of items produced in small lots, and in-betweens - according to the difference in pattern of development among subsectors of the bicycle parts industry: (1) the group of capital-intensive items which can be mass-produced in big mechanized factories, such as rims, chain, spokes, and free wheel; (2) that of labour-intensive items whose production processes can be infinitesimally fractionized, many of the fractions being accomplished manually, and which are manufactured in a form of social division of labour among medium- and small-scale factories clustered into local blocks, such as frame, front forks, brakes, and bottom bracket and head parts; (3) that of items falling between the first two groups, such as chain wheel and cranks, hubs, pedals, mudguards, and bell. An article by Yoritada Mishina and Jun'ichi Yamamoto in Osaka Furitsu Shoko Keizai Kenkyujo, Jitensha Kogyo no Teitaisei to Kozoteki Henka: Kikai Kogyo ni okeru Chusho Kigyo no Saihen Katei [The stagnating trend of and structural changes in the bicycle industry: the reorganizing process of medium- and small-scale enterprises in the mechanical industry], Part 7, 1961, pp. 1-2. The book will hereinafter be referred to as Structural Changes. While the classifications from the mechanical engineering point of view under a and b hardly change over time, the classification under c by the stage of technological development in the industry can change with the advance of technology, and from a similar standpoint the author would tentatively suggest the following classification as well to reflect the current state of the industry: (1) the group of capital-intensive items, which are limited in variety and can be mass-produced in automated processes, such as the rims, chain, and spokes; (2) that of more skill-intensive items, mainly
involving metal machining and joining, such as the frame, front forks, handlebars, rim brakes, gear case, luggage carriers, stand, and saddle; (3) that of technology-intensive items, mainly those used in the driving mechanism, involving sophisticated machining and assembling procedures, such as the transmission, free wheel, chain wheel and cranks, hubs, pedals, calliper brake, and hub brake.

12. The output in 1937, combining both finished bicycles and parts, was equivalent to 2.26 million finished vehicles, out of which 1.14 million-unit equivalents or about 50 per cent were exported. Sakai-shi Keizai-bu Shoko-ka, Sakai no Dento Sangyo (Traditional industries of Sakai), March 1972, p. 32.

13. According to the customs clearance statistics of the Ministry of Finance, the combined value of Japan's machinery exports in 1937 stood at ¥180,470,000, in which the greatest share ― ¥29,210,000 or 16.2 per cent ― was held by bicycles, parts, and accessories, followed by marine boilers (14.8 per cent), rolling stock, parts, and accessories (11.5 per cent), and automobiles, parts, and accessories(11.4 per cent). A Century, p. 329.

14. Table 4 indicates a transient increase in exports in 1950 and 1951 that owed much to the resumption of trade with China in 1950. As dollar-based Chinese assets deposited with the Japanese branches of American banks were not frozen then, they were used to finance exports of 5,000 bicycles in 1950 and 80,000 in 1951, together with parts, totalling $3 million. In those days, there were no diplomatic relations between Japan and China, and the international political situation prevented normalization of trade between them. There also were many other obstacles to commerce between the two nations, including the difficult choice of commodities to be bartered and the unsmooth settlement of accounts; as a result bicycle exports to China sharply declined from 1952 on. A Century, p. 432.

15. Toshio Shibata, "Higashi Ajia Chushinkoku no Yushutsu Shincho to Wagakuni Chusho Kigyo, Case Study 4, Jitensha Dobuhin," in Nihon Boeki Shinkokan (JETRO), Kaigai Shijo [Overseas markets], XXVIII, 322, August 1978, p. 50. The book will hereinafter be referred to as Case Study.

16. See Table 3.

17. In 1976, the US was the leading importer of bicycles and their parts, totalling $150 million, followed by West Germany ($67 million) and the Netherlands ($55 million). Jitensha Sangyo Shinko Kyokai, Jitensha Tokei Yoran [Handbook of bicycle statistics], 13th ed., 1979, p. 229.

18. Case Study, p. 51.

19. Summarized from ibid., pp. 51-54.

20. Ibid., p. 54.
21. According to Tsusho-sangyo-sho (Ministry of International Trade and Industry), ed., Zenkoku Kikai Kojo Meibo [National directory of machinery factories], 1977 ed., in Saitama Prefecture there is a total of nine factories, including both those for finished bicycles and those for parts, of which three belong to major manufacturers headquartered in Tokyo and which, combined, account for most of the aggregate shipments from all the bicycle factories in the prefecture. Therefore most of the value statistically listed as shipments from Saitama factories is attributable to Tokyo-based manufacturers.

22. It is not only in Japan that the bicycle industry started with parts production. When Britain, then the king of the bicycle-manufacturing world, stopped her export during World War I, all other advanced nations began copying British-made bicycle components to maintain the supply of replacement parts. Here lies both the reason for the international unification of standards for bicycle parts and the background of activated international exchange in them. Case Study, p. 56.

23. Osaka Furitsu Shoko Keizai Kenkyujo, Osaka ni okeru Jitensha Sangyo no Jittai: Seisan-hen [Actual situation of the bicycle industry in Osaka: volume on production], 1954, p. 21. The book will hereinafter be referred to as Situation. Its contents are the findings of joint research by Yoritada Mishima, Jun'ichi Yamamoto, Sho Taniguchi, Yoshio Morikawa, and the present author.

24, 25. Problems, p. 57.

26. For instance, Araya Kogyo specializes in rims, Sugino Tekko in chain wheels and cranks, and Shimano Kogyo together with Maeda Kogyo in transmissions and free wheels. Ibid., p. 57.

27. Structural Changes, p. 2.

28. For example, Shimano Kogyo, a major bicycle-parts manufacturer (whose stock is listed on the first section of the Stock Exchange), is referred to in Toyo Keizai Shimpo-sha, Kaisha Shikiho [Quarterly report on companies], 1979, No.3, p. 587, as "an integrated manufacturer of bicycle components for driving and braking mechanisms, holding an overwhelming share in the world market."

29. Problems, p. 57.

30. Osaka-fu Shoko-bu, Osaka-fu Jitensha mata wa Sono Bubunhin no Seizogyo Sanchi Chusho Kigyo Shinko Vijion [Vision of promotion of smaller enterprises in production centres of bicycles or their parts in Osaka Prefecture], 1979, p. 2. The book will hereinafter be referred to as Promotional Vision.

31. An article by Ryoji Takada in Osaka-furitsu Shoko Keizai Kenkyujo, Saikin 10-nenkan ni okeru Osaka Chusho Kogyo no Kihon Doko: Sono ll, Jitensha Seizogyo [Basic trends of smaller industries in Osaka during the last 10 years: part Ⅱ, bicycle industry], 1969, p. 15, The book will hereinafter be referred to as Basic Trends.
32. A company holding a large share in the market supplies a wide variety of rims ranging in quality from those for "bargain sale" bicycles to those for established brands and highest-class stainless-steel products. Osaka-fu Shoko-bu and Momoyama Gakuin Daigaku Sogo Kenkyujo, Jiba Sangyo Gijutsu Jittai Chosa Hokokusho [Report of a survey on the actual technological situations of endogenous local industries], chapter 5 on bicycle-parts manufacturers (written by Kunio Goto), 1978, p. 61. The book will hereinafter be referred to as Technological Survey. It is based on joint research by eight co-workers, of whom one is the present author.

33. Problems, pp. 66-67.

34. The proportion of assemblies by retailers is falling off, as will be referred to in more detail in chapter III.4.

35. For further details on the marketing mechanism see Problems, pp. 66-68.

36. Nihon Keizai Shimbun-sha, ed., Nihon Sangyo Hyakunen-shi (A hundred-year history of the Japanese industry), volume II, quoted in A Century, pp. 35-36.

37. A Century, p. 369.

38. Ibid., pp. 373, 376.

39. Ibid., p. 376.

40. Ibid., pp. 382-383.

41, 42. Ibid., p. 383.

43, 44, 45. A Century, p. 363

46. Situation, p. 23.

47. A Century, p. 39.

48. Ibid., p. 364.

49. Seiji Keizai Kenkyujo, "Jitensha Kogyo no Kozo to Kiki no Shozai " [Structure of and factors critical to the bicycle industry] in Seikei Gesshi [Political economy monthly], no. 10, December 1962.

50. The only remaining bicycle manufacturer among the converted makers is Katakura Jitensha K.K. If one also counts postwar participants affiliated with major manufacturers in non-bicycle areas, the only surviving one is Bridgestone Cycle K.K., which started production of finished bicycles in 1949. A Century, p. 365.

51. The law was amended in 1957 to expand the object of the promotional subsidy from the bicycle sector alone to the mechanical industry in general, with the quoted passage being rewritten as follows: "to
contribute to improving and promoting the export of bicycles and other machinery and to rationalization of the mechanical industry. . . ." A Century, p. 409.

52. Ibid., p. 43.

53. Ibid., pp. 411-412.

54. Ibid., p. 412.

55. Ibid., pp. 414-415.

56. The duties of the research foundation and guidance service stations were:

(1) Research on materials and techniques for the production of bicycles

(2) Research on designs of bicycles

(3) Research on production control and equipment rationalization in bicycle factories

(4) Technical consultation, surveys, tests, research projects, designing, and test production at the request of bicycle manufacturers

(5) Training and re-education of bicycle technicians

(6) Acquisition and administration of industrial property concerning bicycles

(7) Publication and dissemination of, and guidance concerning, the fruits of the foregoing activities through official organs and seminars Ibid., pp. 453-454.

57. Ibid., p. 422.

58. Technological Survey, p. 65.

59. For instance, the part of the bracket axle that is to fit into the crank hole is supposed to measure 5/8 inch in diameter by the British Standard, and the corresponding Japanese standard is 15.88 mm, the metric equivalent of 5/8 inch. Jitensha Sangyo Shinko Kyokai, Jitensha Jitsuyo Binran [Practical handbook of bicycles], 3rd ed., August 1977, pp. 17-18.

60. "Jitensha Ryaku-nempu" (Brief chronology of bicycles) in A Century, pp. 512-514.

61. Ibid., p. 436.

62. Ibid., pp. 436, 438.

63. Ibid., p. 437.
64. Ibid., pp. 437-438.

65. Ibid., p. 439.

66. Structural Changes, pp. 7-8.

67. Ibid., p. 8.

68. A Century, p. 439. The aforementioned Bicycle Technology Research Foundation seems to have played an important role in the development of packaging-assembly techniques.

69. Ibid., p. 440.

70. Basic Trends, p. 111.

71. Ibid., pp. 108-109.

72. Tsusan-sho Kogyo Gijutsu-cho (Industrial Technology Agency, MITI), Wagakuni Kogyo Gijutsu no Jittai [Situation of industrial technology in Japan], 1949. Quoted in Situation, p. 45.

73. A Century, pp. 43-44.

74. See chapter Ⅲ.4.

75. Basic Trends, pp. 66-70.

76. Shimano Kogyo K.K. in Sakai City, Osaka. According to Shimano Kogyo 50-nen no Ayumi (50-Year history of Shimano Kogyo), in or about 1957 the cold-forging technique became known in Japan when a German machinery manufacturer at a Japanese trade fair exhibited a cold-forging machine, which attracted much interest. Shimano immediately launched its own research on this new technique. As its export of three-speed hubs to the US started on a regular basis, necessitating their mass production, Shimano accelerated its R & D efforts in 1960 and succeeded in 1962 in industrial application of its cold-forging technique to the production processes of three-speed hubs, ordinary hubs, and free wheels. The newly developed method afforded smaller, lighter, yet stronger products of uniform quality. It also resulted in a 36 per cent saving in material consumption, as only 400 grams of the material were sufficient for cold forging where 685 grams were required by hot forging. Moreover, little if any machining was needed after forging to obtain finished products. The machining cost of three-speed hub parts and free-wheel parts, for instance, was reduced by 25 to 35 per cent on an average as a result of either totally dispensing with or shortening some parts of the process. Had the development of the cold-forging technique been delayed by years, the manufacturer would have been unable to start mass-production of three-speed hubs in time for it to avail itself of marketing opportunities in the US. By that time, fortunately, financial institutions' evaluation of bicycle-parts manufacturers had considerably improved in part because of the active demand for three-speed hubs, and collateral funds had also become
available from the Bicycle Industry Association and others (loans deriving from the aforementioned subsidy for promotion of the bicycle industry). Stimulated by the improved financial situation, capital investments were made year after year from 1960 on. Shimano Kogyo 50-nen no Ayumi, published by Diamond-sha in 1971, pp. 99-111.

77. Promotional Vision, p. 15.

78. During the four-year period from 1964 through 1967, some ¥2,400 million was invested in machines specified under the Law for Promotion of Modernization. Basic Trends, p. 71.

79. Shimano Kogyo 50-nen no Ayumi, pp. 111-113.

80. An article by Kunio Goto in Technological Survey, 1978, pp. 59-68.