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By this time, increasingly stiff competition from lower-cost competition in Asia resulted in declining market share. These problems were exacerbated by the inefficiency of producing modern bicycles in the 80-year-old Chicago factory equipped with outdated equipment and ancient inventory and information systems. After numerous meetings, the board of directors voted to source most Schwinn bicycle production from their established huffy mountain bike bicycle supplier in Japan, Panasonic Bicycle. As Schwinn’s first outsourced bicycles, Panasonic had been the only vendor to meet Schwinn’s production requirements. Later, Schwinn would sign a production supply agreement with Giant Bicycles of Taiwan. As time passed, Schwinn would import more and more Asian-made bicycles to carry the Schwinn brand, eventually becoming more a marketer than a maker of bikes.
For the Aerocycle, F. W. Schwinn persuaded American Rubber Co. to make 2.125-inch-wide (54.0 mm) balloon tires, while adding streamlined fenders, an imitation “gas tank”, a streamlined, chrome-plated headlight, and a push-button bicycle bell. The bicycle would eventually come to be known as a paperboy bike or cruiser. The boom in bicycle sales was short-lived, saturating the market years before motor vehicles were common on American streets.
Starting in the 1890s, Arnold, Schwinn and Company were a bicycle manufacturer with none of its own retail sales outlets. Their bicycles were sold in Sears and Roebucks and other department stores. This changed in the 1930s as Schwinn began to withdraw from selling bicycles through mass-market retailers. Schwinn developed high-cost, high-quality bicycles and started focusing on the sale of its bicycles through local bicycle retailers.
Imports of foreign-made “English racers”, sports roadsters, and recreational bicycles steadily increased through the early 1950s. Schwinn first responded to the new challenge by producing its own middleweight version of the “English racer”. The middleweight incorporated most of the features of the English racer, but had wider tires and wheels. In the Twentieth Century, had come full circle from its beginnings.