Feature - TWIKE goes from students' project to IPO
Date: 02-Aug-99
Country: SWITZERLAND
Author: Marcel Michelson
The TWIKE, the name of which is a combination of Two and Bike, is a quirky three-wheel vehicle with an electric engine and a set of cycling pedals. It is environmentally friendly, but its backers are no green barnstormers.
Ralph Schnyder, one of the inventors and chief executive of TWIKE AG, stresses the sporting side of the vehicle and talks about value-creation, cost base and a share float.
TWIKE plans to make 150 of its latest TWIKE 99 model this year, doubling production to 300 in 2000 and increasing the rate each year to 2,000/3,000 in 2004.
Then, TWIKE will be ripe for a share float.
"At the moment there is still a lot of potential to bring the production costs down by scaling up production, that's an enormous challenge," Schnyder told Reuters.
Unlike many other electric vehicle experiments of the 1960s and later, TWIKE is not subsidised and does not need special power stations. Any 220/230 volt socket will do.
The vehicle has a maximum speed of 85 km (52 miles) an hour and its range is between 40 and 90 km (25 and 55 miles) on a full battery, depending on load and landscape.
"Statistics show that about 80 percent of journeys made with a car are for distances below 40 kilometres. And that's where the ecological advantage is most clear. It is nonsense to carry a tonne of metal around when it's not needed. There is less energy consumption and no exhaust gases when you use the TWIKE," Schnyder said.
The vehicle has a few rivals, such as the CityEl, which originated in Denmark but has a large following in Germany, and the Sparrow in the United States. Those are single-seat vehicles and do not allow the driver to cycle as well.
VANCOUVER WORLD EXPO
The first prototypes of the TWIKE appeared at the Vancouver World Expo in 1986 when an entry by Zurich polytechnic students won a competition for an innovative vehicle.
"We wanted to create something that would fit between bicycle, motorbike and car. For when the car is not really needed the bicycle is not sufficient," Schnyder said.
At the time TWIKE was entirely human-powered. In 1991, they made a second generation prototype with the help of aluminium group Alusuisse Lonza and added an electrical engine.
"With only the pedals it was a funny and clever vehicle, but it could not go on the main road and was no use getting up the mountains. That's why we added the engine," he said.
In 1993, the team sat down to see what the TWIKE's market potential could be and decided that if they had 200 orders they would start making them in a series. "Every two weeks we went around to promote the vehicle and after a little more than year we had the 200 orders," Schnyder said.
The first production TWIKE rolled off the line in late 1995 and the remainder followed in 1996.
The team then set about studying their production and sales method and invented the "virtual factory". The central workshop in Sissach puts together the modules while regional centres, closer to the client, do the final assembly and maintenance.
"It also helped the value chain - the TWIKE centres cannot live from service and repairs alone but with final assembly they are financially viable," Schnyder said.
The TWIKE centres helped the young company to set up its own distribution channel - the TWIKE fitted in neither the bicycle trade nor in car showrooms.
SERVICE KEY TO VIABILITY
The regional centres also provide service, the lack of which killed off many other electrical vehicle projects. "With the centres we made sure that the TWIKE was not just sold but also used," Schnyder said.
There are currently 400 TWIKEs on the streets, 310 in Switzerland, 80 in Germany and 10 in the United States. Forty of them are the TWIKE 99.
Production growth depends on the speed of the roll-out of new TWIKE centres and, therefore, on finances. "Each new centre costs some 100,000 to 200,000 Swiss francs ($67,160 to $134,300) and we need to invest that," Schnyder said.
Ther