* Greeks cut back on fuel and taxis
* Once lowly bike gaining popularity
By Karolina Tagaris
ATHENS, Aug 8 (Reuters) - Greece's dire economic plight has forced thousands of businesses to close, thrown one in five out of work and eroded the living standards of millions. But for bicycle-maker Giorgos Vogiatzis, it's not all bad news.
The crisis has put cash-strapped Greeks on their bikes - once snubbed as a sign of poverty or just plain risky - and Greek manufacturers are shifting into fast gear.
The high cost of road tax, fuel and repairs is forcing Greeks to ditch their cars in huge numbers. According to the government's statistics office, the number of cars on Greek roads declined by more than 40 percent in each of the last two years. Meanwhile, more than 200,000 bikes were sold in 2011, up about a quarter from the previous year.
Shops selling bicycles, and equipment ranging from helmets to knee pads, are spreading fast across the capital, popping up even between souvenir shops on the cobbled pedestrian streets of the touristy Plaka district.
"They're sprouting up like mushrooms," said Vogiatzis, who designs and builds tailor-made bicycles in his workshop on the Aegean island of Rhodes.
A former cyclist on Greece's national team, Vogiatzis opened his business in the mid-80s, combining his love for drawing and mathematics, but only recently watched sales boom from a modest 40 bikes a year to over 350.
"There's no more money for luxuries and that helps," said Vogiatzis, who works away furiously with two other staff to meet demand for all sorts of bikes - some lavishly hand-painted in glitter, others flaunting the Greek flag.
"People who were never interested in cycling are buying bikes," he added. Vogiatzis now exports to seven countries including Germany and the United States, and opened shops across Greece, including in Athens where competition is fierce.
A far cry from the shuttered shopfronts in the capital that have become a painful reminder of the country's worst downturn since World War Two, bike shop owners estimate that at least one store opened every month in 2011.
Vogiatzis laughed: "Every neighbourhood has its bike shop just as it's got its kebab shop."
POTHOLES, TRAFFIC JAMS
In austerity Greece, the once lowly bike is winning new fans every day, from middle-aged commuters who relied on their cars to those who poked fun at former prime minister George Papanadreou's penchant for cycling as not being macho enough.
The new national fashion has even prompted the Athens mayor to start working on a public bike hire scheme similar to those in other European capitals - a first for a city where the few cycling lanes are often dotted with pine trees or parked cars.
The lack of infrastructure and Athens's mountainous landscape have not deterred Greece's new cyclists who have begun pedalling through traffic jams, up and down steep hills and over potholed roads.
"This is not Berlin. Here it's risky but you need to start thinking what you'll cut back on - taxis, the metro," said Elena Koniaraki, 39, a music saleswoman who joked about sticking a learner's sign on her back for the first few bumpy rides.
A pay cut two years ago forced Koniaraki to give up her car under a "cash for clunkers" scheme as she could no longer afford to pay the road tax or fill up her tank. She also moved from her house in a leafy northern Athens suburb to the centre.
And to get through a cash squeeze in March, she picked up a second-hand bike for the first time since childhood.
"At first my friends would laugh at me and say: Oh, poverty!" said Koniaraki, who now cycles to work from the foothills of the ancient Acropolis, past shop-gazing tourists in Plaka and through the bustling Syntagma square.
"We've never had a bike culture in Greece. Sometimes I'll leave my local street market on my bike, loaded with bags of tomatoes, and people will stop and wave at me," she said.
THE ONLY WAY IS UP
With fuel prices catapulted by tax rises to about 1.72 euros per litre in July - one of the highest rates in Europe - a bike culture may just develop.
"A lot of people are starting to see it as an alternative," said Tolis Tsimoyannis, a cycling aficionado who imports fold-up bikes from Taiwan.
Tsimoyannis, who opened his business in 2006, said he saw a steady increase in demand in the previous two years, many of his customers students and people in their 40s who were struggling to make ends meet. Lately, his business has started to level out - not because of a drop in demand but because the opening of so many bike shops means they each get a smaller piece of the pie.
But even as prospects of Greece's recession-mired economy remain glum and many fear the pain from the crisis will only intensify in the days ahead, bike enthusiasts are optimistic that the appeal of the bicycle will only grow.
"The only way is up," Tsimoyannis said. (Editing by Peter Graff)