3.6.4 Extending life of the mountain bike
Although the Pioneer range was intended as an MTB replacement, it was recognised that it was not a perfect substitute, its market being somewhat different. There was therefore a need to extend the product life of the MTB, especially for younger customers. In the USA, interest had been growing in suspension for mountain bikes. Alex Moulton’s dual suspension 20" wheel ATB, launched in the USA in 1988, was probably the first fully suspended production mountain bike. Although far from the mainstream of mountain bike design, it stimulated interest in the subject and Rockshox telescopic front forks reached the UK in 1990.
Adding suspension to a Raleigh MTB seemed a good way of boosting interest and sales, hence the very successful Activator was created. This was a budget MTB with a simple Raleigh-designed telescopic front fork. Launched in 1992, it was advertised effectively on TV. The following year saw the introduction of Activator II, a dual suspension version, with a Raleigh-designed rear suspension system somewhat reminiscent of that used on the Raleigh-manufactured Moulton MkIII. Activator II launched at £260 (= about £315 today) and by May 1994 could be bought at discount for £200.
Whereas the Activators were essentially budget MTBs with inexpensive suspension designed in-house, Raleigh recognised that the other end of the mountain bike market needing nurturing. Yvonne Rix understood how Ford effectively used sub-brands such as Cosworth to create interest and capture customers with aspirations higher than Dad’s much-loved but mundane Mondeo. Hence the Raleigh sub-brand M-Trax was developed, offering high quality MTBs. Both in marketing and product development, M-Trax benefited from the successes of the Raleigh Mountain Bike team, which Rix instigated in 1989.
At the MTB entry level further development was needed to sustain interest and market share. Yvonne Rix had recognised the sales potential of MTBs with oversize aluminium tubing, which some competitors were introducing. However, Raleigh had no in-house aluminium frame-building facilities and did not want to buy in frames. At the Harrogate cycle show in 1993, Rix concluded that the appeal of oversize tubes to younger customers was primarily visual. They liked the look but were not particularly interested in the material used. Raleigh was able to handle wider but thinner-walled steel tubes and hence the Max range was born. Launched in 1995, the bikes were advertised on TV as ‘oversized but not overweight’. The range was hugely successful for some four years.
3.6.5 Electrically assisted bicycles
In 1998, Yvonne Rix retired as marketing director. The last innovation she introduced was the Select electric bike, which was launched in 1997. The Select had a proportional power control system that automatically monitored and matched the rider’s energy input, switching-in electric assistance only when required. It sold for about £1,000. Rix believes firmly that electrically assisted cycles have a big future, subject to battery improvements commensurate with those seen in the development of mobile telephones.
Raleigh was the first major UK manufacturer to offer an electric bike. Unfortunately, it was too early and too expensive to have much impact on sales, and was dropped by Rix’s successor.
3.6.6 Sturmey-Archer
For a long time, Raleigh supported Sturmey-Archer by fitting an AW 3-speed hub in the entry-level model of each range. There was, however, an image problem with the product and a 5-speed derailleur was a cheaper, more fashionable alternative. Moreover, Raleigh sometimes paid more for S-A products than did competitors, which lead to internal friction. Today S-A and Raleigh are relatively independent. There is no special favouring by Raleigh of S-A products. A Raleigh is as likely to have a Shimano 7-speed hub from the other side of the world, as it is a Sturmey-Archer from the other side of the road.
Under Derby, Sturmey-Archer was able to re-engineer many of its hubs. In most cases, this was successful, apart from the short lived and unsatisfactory 5 StAr dual-cable 5-speed hub. A single-cable 5-speed hub, the Sprinter 5, replaced this. During the 1990s, more than 20 years after patenting a 7-speed hub, S-A was finally allowed to bring one to market, the Sprinter 7. Sadly, this was only after its main rivals, Sachs (now Spectro by SRAM) and Shimano had already introduced 7-speed hubs.
Sturmey-Archer’s main market is the Netherlands. The major British specifiers are makers of portable cycles, such as Brompton, and niche players such as Pashley, for their roadsters, folders and delivery cycles, including those used by the Royal Mail.
3.6.7 1998 and after
Yvonne Rix retired in 1998. Her successor appointed a new advertising agency and instigated a change of corporate image. Sales had been falling at about 8% per annum for the previous two years but in 1998 they plunged 29% to 405,000, the lowest since 1970. Market share was down from 21 to 15%, probably the lowest in a hundred years.
At the time of writing, figures for 1999 were not available but early indications suggested a recovery to approximately 1997 levels.
3.7 High end products: 1975-99
3.7.1 Carlton
Production of high end cycles at Nottingham ended in the late 1950s with the Reg Harris era. Awareness of, and interest in, the demands of the serious competitive cyclist died with it. The acquisition in 1960 of Kevin and Gerald O’Donovan’s Carlton Cycles generally filled this gap. However, as Carlton was for the most part run autonomously, the association of the Raleigh brand with performance products ceased in the UK.
The export situation was very different. Raleigh products designed and built by Carlton were an important part of the range. They sold well in their own right and were not used just to lend credibility to the rest of the range.
3.7.2 Lightweights move to Nottingham
The success of Carlton was seen as diluting the Raleigh brand and therefore the Carlton brand was killed off. Production was transferred to a new lightweight department at Nottingham. Initially the products were lacklustre: high specification tubing but with mass production geometry and mid-range equipment. There was relatively little contact with potential customers: this, coupled with Raleigh’s inherent lack of responsiveness, led to some delay before the product met the intended customers’ needs.
Although Raleigh had a successful racing team on the Continent, marketing made little use of this to promote Nottingham-built bikes. Meanwhile, serious cyclists turned their backs on the Nottingham lightweights and beat a path to buy frame-sets from the Raleigh team workshop, Gerald O'Donovan’s Specialist Bicycles Development Unit at Ilkeston.
Nonetheless, the Nottingham-made product did improve and the International Cycling Guide 1983 selected the off the peg Raleigh Team Replica as one of its bikes of the year. Campagnolo-equipped, it sold for £450 (= about £880 today).
3.7.3 Special Products Division
The demise of the European team in the early 1980s led to the closure of Ilkeston but resulted in Gerald O’Donovan and Melvyn Cresswell teaming up on product development at what became known as Special Products Division. Shortly before this, and supported by his ‘indulgent boss’ Yvonne Rix, Cresswell had designed and launched the Randonneur tourer. It was based on personal experience and inspired by his first ‘serious’ bicycle, which Gerald O’Donovan had built for him many years previously. Although Raleigh’s most expensive complete bicycle, it was an instant success. The Randonneur proved that Raleigh could still sell high-end product if it was thoughtfully designed and manufactured.
The small team gathered together at Special Products built on this success. They produced many viable new bikes, which initially sold in good volumes. Derby encouraged this development work and Ed Gottesman, leader of the Derby buy-out, was particularly supportive. An avid collector of high-end Raleighs, he was always looking to add to his collection. Moreover, he always paid for his Special Products bikes.
Managing director Sandy Roberts was also a keen supporter of the unit. However, after he retired in 1990, support waned. Despite pioneering work on thermal bonding technology (DynaTech) and frame manufacture using titanium and metal matrix composites, the Raleigh board was unsure how to make use of Special Products Department. Should it be required to make a profit? Should it be a development overhead? Was it a marketing tool and hence part of marketing costs?
Yet, even breaking even was difficult. This was the era when internal transfer charging became fashionable in the corporate world. Despite being autonomous, Special Products had to contribute disproportionately to corporate IT costs, human resources department costs and even the running of directors’ cars. Meanwhile the sales department had little interest in Special Products and was so tied to the Raleigh 5-star dealer network that access was denied to quality independent dealers capable of selling the product. The decline of Special Products was therefore inevitable, although the unit still exists.
3.7.4 Special Products as niche support for volume production
The Raleigh view is that the company always has been and remains primarily about mass-production. The brand philosophy also dictates that Raleigh must make the best end of the bicycles sold in volume. Therefore, if Raleigh sells mountain bikes, it must make the top niche Raleigh MTBs. Consequently, Special Products development unit now makes MTBs for the Raleigh team, whose mission is ‘to demonstrate that Raleigh make the best mountain bikes in the world’. This is not particularly profitable in its own right, but is worthwhile because of the brand enhancement when selling ordinary bicycles. Moreover, there is a trickle down of technological development and refinement from the team machines to ordinary production.
The philosophy today regarding Special Products is that any niche markets catered for must relate to the mass-produced products.

"Prices from £2000 to £270": niche products in support of the mass market.

.............................................