RESHORING CASE

Bicycle Five

Company details
Code: 
Bicycle Five
Company name: 
FIVE - Fabbrica Italiana Veicoli Elettrici
Group name: 
Termal
Company country: 
Italy
Group home country: 
Italy
Sector: 
C - Manufacturing
Sector detail: 
C30 - Manufacture of other transport equipment
Sub-sectors: 
C30.9.2 - Manufacture of bicycles and invalid carriages
Reshoring details
Reshoring announcement date: 
07/03/2017
Starting implementation date: 
May, 2017
End of Implementation : 
June, 2019
Reshored to: 
Italy
Location of affected unit(s): 
Bologna
Location code: 
ITD55
Reshored business function: 
Production
Partial or Total reshoring: 
Partial
Reshoring governance mode: 
In house (in own facilities)
Estimated job gains: 
50
Reasons for reshoring: 
"Made in" effect
Delivery time
Increased production costs in the host country
Poor quality of offshored production
Strengthen the brand image
Case narrative: 

FIVE (Fabbrica Italiana Veicoli Elettrici) is an Italian innovative start-up founded in 2012, which is a leader in the production of electric bikes and motorbikes and belongs to the Italian group Termal. The company decided to move its manufacturing activities from Shanghai (China) back to Bologna (Italy). FIVE has invested EUR 12 million for the new production plant located in Bologna (Italy) and it has been launched on 22 May 2017. Fabio Giatti, the CEO of the company, stated that the main motivation of this reshoring decision is quality (FIVE was never able to achieve the quality levels needed for the Italian and European consumers with the plant in China). Other reasons including: the increased production costs in China, the long transportation time, and the made-in effect (made in Italy has a great value). The new factory is expected to operate with full capacity within the next three years by producing a total of 2,500 units in 2017. It will cover 30% quota of FIVE’s product portfolio and is expected to cover 80% and 100%  quota of production in 2018 and 2019, respectively. In this case, FIVE could gradually withdraw production activities at two factories in Shanghai (China) where employed 50 workers. There are 25 employees in the new factory and by 2021 it will employ 50 employees. FIVE's new factory features a full production capacity of 35,000 vehicles a year, including products under the Itlawin, Wayel and Momo Design brands. In 2017, FIVE is expected to reach a EUR 2.5 million turnover and focus on both domestic and foreign markets. Recently, FIVE has announced Lockbike, an innovative way to protect both electric and traditional bikes from theft. 

Sources: 

Vertus, 07/03/2017

Offshoring details
Offshoring location: 
China
Offshored business function: 
Production
Offshoring governance mode: 
In house (in own facilities)
Offshoring entry mode: 
Wholly owned
Number of jobs lost: 
50
Host country geographical area: 
China
Notes: 
This case was identified by the research group first, then M-Brain provided this case . Since the original article link provided by M-Brain is not accessible, we put the link we found by ourselves.