Written by RA10 from a question-by-question analysis of the AQA 7132 papers 2020-2025 and the v2.0 specification. This is not an official AQA paper and does not contain real exam questions.
Voltway plc designs and assembles electric bikes (e-bikes) in Coventry. It was founded in 2012 and floated on the stock market in 2020. Voltway employs 1 900 people, including 1 240 production workers. Its bikes are sold through independent cycle shops in the UK and online. Most components, including motors and batteries, are imported from Asia.
UK e-bike sales grew rapidly between 2019 and 2022 but have been flat since, as higher interest rates and the cost of living reduced spending on expensive leisure products. Many independent cycle shops have closed, and more customers now buy online. In Germany and the Netherlands e-bikes are bought for commuting as much as for leisure, and sales continue to grow by around 9% a year. Competition is intense, with established European brands and low-cost imports.
Voltway's mission is 'to make clean travel the easy choice'. In 2024 the board set a corporate objective of becoming carbon neutral across its own operations and supply chain by 2030. This will require changes to suppliers, packaging, transport and energy use, and some investors have questioned the cost.
Voltway's bikes have a strong reputation for design, but the business has struggled to keep costs down. Its main UK competitor, Kestrel Bikes, invested heavily in automated frame welding and painting three years ago. Voltway still relies on manual assembly, and absence and defect rates are high (Appendix A). Operations managers blame the old factory layout; employees blame constant changes to production targets.
The UK e-bike market has slowed, but demand in mainland Europe is growing strongly. The board is considering two ways to expand (Appendix C). Option 1: acquire Zippa BV, a Dutch e-bike maker with a strong network of dealers across Germany, the Netherlands and Belgium. The acquisition would be financed by a £120m bank loan and £40m of new shares. Option 2: form a 50:50 joint venture with TaiCycle, a Taiwanese manufacturer, to build a low-cost factory in Vietnam supplying both companies' European sales. The Chief Executive, Marcus Bell, favours the acquisition.
Voltway's culture is informal and engineering-led: decisions are often made quickly in small teams, and engineers are proud of their designs. Zippa, by contrast, is a family-founded business with a formal, consensus-based approach in which decisions are discussed at length with its works council. Zippa's managers have said they want to keep their own brand and management team.
News of a possible acquisition has worried Voltway's employees. Rumours that Coventry production could move to the Netherlands have spread on social media. The trade union representing production workers has said it will oppose any change that threatens jobs, and several experienced engineers have already left. Marcus says, 'Our people must understand that standing still is not an option.'
| Voltway | Kestrel Bikes | |
|---|---|---|
| Bikes produced | 186,000 | 210,000 |
| Production workers | 1,240 | 1,000 |
| Defects per 1 000 bikes | 14 | 6 |
| Staff absence rate (%) | 6.1 | 3.2 |
| Capital investment per production worker (£000, last 3 years) | 9 | 41 |
| Revenue | 412 |
|---|---|
| Operating profit | 21 |
| Current assets | 140 |
| Current liabilities | 118 |
| Non-current liabilities | 95 |
| Total equity | 180 |
| Option 1 Acquire Zippa BV | Option 2 Joint venture with TaiCycle | |
|---|---|---|
| Cost to Voltway | £160m (£120m loan, £40m shares) | £35m (50% share) |
| Forecast annual operating profit to Voltway | €18m (Zippa's current profit) | £9m from Year 3 |
| Other information | 600 staff; dealers in 3 countries; different IT systems | Vietnam wages 70% below UK; 6-week shipping time to Europe |
Exchange rate: €1 = £0.85.
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