Biden's Favorite Indoor Bike 'Peloton'... $450 Million Investment to Build First U.S. Factory

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Peloton, the indoor cycling bike favored by U.S. President Joe Biden, is investing $400 million (approximately 450 billion KRW) to build its first factory in the United States. This decision comes as a response to severe shipping and delivery delays caused by an overwhelming number of orders that the company could not fully handle.

According to CNBC on the 24th (local time), Peloton announced plans to construct a factory in Troy Township, Wood County, Ohio. Construction is set to begin this summer, with operations expected to start in 2023. Peloton anticipates that the factory will create more than 2,000 jobs in the region.

John Foley, Peloton’s co-founder and CEO, stated, "We have long planned to build a factory, but it was through experiencing COVID-19 that we decided to put this plan into action. This factory will provide flexibility in operating our global supply chain."

Peloton is a home training device equipped with a microphone and webcam, allowing users to interact with instructors via a tablet screen while exercising. It does not simply sell exercise equipment but also offers content that users can enjoy during workouts through the tablet. This is why it is often called the Netflix of home training.

Peloton has greatly benefited from the COVID-19 pandemic. With indoor fitness facilities closed and people forced to exercise at home, sales surged. However, lacking its own production line, Peloton had been manufacturing products at other companies’ factories in Asia, which led to serious shipping delays as it could not keep up with the flood of orders. This issue has been cited as a reason for pessimistic future earnings forecasts. To reduce customer inconvenience caused by delivery delays, Peloton announced last November that it would not offer separate discounts on Black Friday.

Meanwhile, in February, Peloton announced it would invest more than $100 million over the next six months to improve logistics and delivery, including air freight, to resolve these issues. The company also acquired fitness equipment maker Precor for $420 million.

This content was produced with the assistance of AI translation services.