Chinese Knock-Offs?

Post by Steven Dale

Ski hills are great and all, but the market’s limited. We’re not building any more mountains (except in Dubai) and the mountains we do have are being adversely effected by global warming – at least when it comes to ski conditions.

That’s not much of a growth market.

The urban market, however, is virtually limitless.

A couple of years ago, humanity transitioned from being a rural species to an urban one. For the first time in history, there are more people living in cities than not and all trend analyses suggest that will only intensify in the near and long future.

Most of that shift towards the urban, meanwhile, has come in the developing world – the very market urban gondolas have become so popular in. So there’s every reason to suspect that the market for urban gondolas will continue to expand – if not explode.

The question then is, can the industry as it’s currently structured handle that coming demand? More importantly, do they even want to handle that coming demand? Maybe the industry’s plenty happy just building ski lifts for the next 50 years.

One way or another, the demand for urban gondolas will be there. And if the industry doesn’t step up to the plate and capitalize on it, someone else will.

Should the industry mistakenly not prepare for this coming expansion of demand, we’re likely to witness new competitors entering the fray. It’s simple economics. If existing supply doesn’t exist to match demand, someone else will fill that gap.

In all likelihood, those new competitors will come from Asia. So much of a cable system’s cost comes from the hyper-specialized labour involved in creating systems so you can be certain that Asian manufacturers will try to find a way to deskill that labour and drive the cost of the technology down.

That means cheap knock-offs. Which in turn means decreased attention to detail and safety standards. Which in turn means accidents are likely to become common where before they were rare.

Which will damage the reputation of the industry as a whole.

I suspect we’re in for a wild ride.

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  1. I agree with you in part Steven. However, I think it would be the exception not the rule, especially in the mid to long term. The Chinese are already developing high speed trains matching the Europeans in performance and quality - in fact, some would argue they 'stole' a few/lot of ideas along the way and improved on them. As safety regulations and intellectual capital improve in these countries we can only expect these manufacturing powerhouses to start matching the Europeans in quality with the economies of scale to drive innovation. It can only mean more competition, innovation and lower costs. In a industry dominated by two big player's that can't be a bad thing, can it?! Whether its a 'wake up' call or a deal breaker for the existing manufacturers its to soon to speculate. It won't be without a few cowboys along the way! Watch this space.
  2. Actually all the safety systems are very simple. They must be simple in order to work reliable. Gondolas are around for over 100 years so anybody with enough capital can build one. Morever the specific gondola parts make only a tiny fraction all the mast and civil work takes a much bigger share. Thus the critical parts can be imported from Europe. To make gondolas really work as an urban transport new innovations needs to be done. The current gondolas wont be very useful in todays Chinese cities. I guess the Chinese rather will be building more subways, subways and maybe their Straddle bus. Gondolas just don't have enough capacity and evacuate a gondola in a crowded city is not going to be an easy task. So my bet is that in China more gondolas are being built for tourists than as an urban transportation.
  3. Gondolas can provide a feeder system for subways that doesn't take space away from surface transportation. I'm going to guess that will have plenty of appeal for the Chinese.

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