Suntour, the end of the journey

Various people have written about the demise of the SunTour in various places (although there is already a definitive book, Sunset for SunTour by Frank J. Berto, presented at the 9th International Cycling History Conference in Ottawa, Canada, in 1998). I dare to write about it here.

JASCA, JBM, JEX Group

Shimano, founded in 1921, and Maeda Kogyo, founded in 1922, both started out producing freewheels, and both began producing transmissions [derailleurs] after the war. Both companies were late starters as transmission manufacturers, but after a period of elimination, Shimano and Maeda were the only two companies left in Japan.

In the early 1960s, when Japan entered a period of rapid economic growth, both companies were members of the JASCA (Japan Sports Cycle Association) group, but as early as the end of the 1960s, the two groups split off into the JBM (Japan Bicycle Manufacturers) group led by Shimano and the JEX (Japan Bicycle Parts Manufacturers Group for Export Promotion) group led by Maeda Kogyo.

Formation of the Suntour Coalition

It was in the mid-1970s that the two companies made a business decision that divided their fortunes.

At that time, Shimano made a major shift to a "component" strategy that has continued to the present day. At first, it was thought that Shimano was focused on the appearance of being a comprehensive parts manufacturer in the vein of Campagnolo's "Gruppo," but it was by no means confined to that level. This strategy helped to "optimize parts development" and (in addition to AX and a few other failures) led to innovations such as FF, PPS, UG, SIS, HG, STI, etc., and also firmly established "customer retention".

Maeda Kogyo, being a freelancer and transmission [derailleur] maker, focused on coexistence and co-prosperity with the JEX Group companies, and decided to counter Shimano's component strategy by using a common brand within the JEX Group...the "Suntour Alliance". (At any rate, it was not easy for a company of Maeda's size to transform itself into a comprehensive parts manufacturer. For example, in the mid-1980s, when Maeda was at its peak, Shimano and Maeda had a threefold difference in the number of employees, a fourfold difference in sales, and a tenfold difference in the number of development personnel.)

Nevertheless, the gap between Shimano and Suntour was not yet decisive, and Suntour was still fighting a more than even battle in terms of quality, if not quantity, and had about 10 years to make a decisive difference.

Fighting in the North American Market

The 10-speed bicycle boom that began in North America in the early 1970s gave Japanese manufacturers an opportunity to make inroads into the North American market, where European parts alone were in short supply. Shimano and Suntour, with their inexpensive, high-performance products, were able to eliminate the European manufacturers and achieve oligopoly in the low and mid-priced segment of the market. From then on, the huge North American market became the "battleground" for the two companies, more important than the domestic market.

At the height of Maeda's success in 1982, Shimano and Suntour had a 30% and 60% share of the North American market for low and mid-priced models, respectively. (In the domestic market, the relationship was the exact opposite, with Shimano at 70% and Suntour at 30%.)

In the mid-1980s, the expiration of Maeda's slanted parallelogram patent, the rapid growth of the MTB market, the emergence of SIS, and the rapid appreciation of the yen due to the Plaza Accord greatly affected the power relationship between the two companies. Maeda Kogyo failed to respond appropriately to these changes.

In 1986, Shimano's share of the North American market was reversed for the first time, with Shimano at 50% and Suntour at 40%. Suntour continued to lose market share.

Even though everyone in Japan was enjoying an unprecedented economic boom under the bubble economy, Maeda was getting poorer and poorer year by year.

Under the Mory Industries Regime

In the 1990s, Maeda Kogyo's finances were squeezed by a large amount of bad inventory, and the company's business finally became untenable. In October 1991, Mory Industries, whose main business was the manufacture of stainless steel pipes (known in the Kansai region for its "Kirakira Pole" stainless steel clothes-drying poles), came to Maeda Kogyo's rescue.

In fact, the year before, Mory Kogyo had already begun providing management support to Sakae Rinko, a member of the Suntour Coalition, and soon after extended a helping hand to Maeda Kogyo, a member of the Coalition's "community of fate". Mory Industries, in the midst of a bubble economy, was looking for ways to spend money (laughs).

Maeda Kogyo, which had come to life with the introduction of funds from Mory Industries, challenged the 1992 sales season with its "MD (microdrive)" in tow. (The MD was, to be fair, an excellent concept, and Shimano later introduced a similar product.) At the show, buyers responded favorably, but actual orders were far from what was expected, and Suntour only lost more market share.

In July 1993, Sakae Rinko changed its name to SR Suntour, and in October of the same year, Maeda Kogyo merged with Mory Industries subsidiary Mory Kinzoku to form Mory Suntour. Finally, Mory Industries decided to withdraw from the bicycle business, and in April 1995, sold SR Suntour and reverted the company name of Mory Suntour back to Mory Kinzoku, ending all business activities.

After going out of business...

SR Suntour was fortunately, shall we say fortunately... bought out (bought back) by "Daihiro Kobayashi," the second president of Sakae Rin Kogyo and the president of SR Suntour. Eirin Technology was established using Eirin's Taiwanese factory and re-launched the SR Suntour brand. Ironically, Rongwon Technology, which abandoned Japan and put down roots in Taiwan, has been able to continue its business in a stable manner.

On the other hand, not a few people approached Mori Kinzoku to take over Suntour's transmission-related production equipment that would have been no longer needed after the liquidation of the business, but all they got was the sad fact that it was all discarded as garbage when the company withdrew.