Bike industry turmoil: Shimano says global cycling market remains “weak” as
segment sales fall by a quarter – and worse to come?

Japanese components giant hails “favourable” response to new groupsets –
but sales in key European market are on the slide and forecast to halve in
the second half of 2023

by SIMON_MACMICHAEL
WED, OCT 25, 2023 11:59

Shimano has said that the global cycling market remains “weak” as the
company revealed that sales of bicycle components fell by a quarter during
the opening nine months of the year – and detailed figures published by the
Japan-based components giant reveal that sales of bicycle components in the
key European market are hardest hit, and are forecast to drop by half in
the second half of 2023.

In its third-quarter 2023 financial statement (link is external), Shimano –
which last month issued a global product recall of 760,000 Dura-Ace and
Ultegra cranksets after a reported 4,500 instances of failure – highlighted
that new launches this year including the 12-speed 105 and gravel-specific
GRX groupsets had met with “a favourable” reception.

> “About time” – Cyclists react to Shimano crank recall after more than 4,500 incidents

However, overall sales within the bicycle components section fell by 24.8
per cent compared to the first nine months of 2022, standing at ¥289,443
million (£1.59 billion). Operating income within the segment fell by nearly
half, down 48.8 year on year to ¥55,917 million (£0.31 billion).

The company’s other major product segment, fishing tackle, saw sales edge
upwards by 3.4 per cent to reach ¥85,472 million (£0.47 billion), with
operating income of ¥16,200 million (£0.09 billion), down 7.3 per cent on
the previous year.

Group sales for the period were ¥375,264 million (£2.06 billion), down 19.7
per cent on the first nine months of 2022, generating operating income of
¥72,086 million (£0.4 billion), a decline of 43.8 per cent.

Shimano said that the global economy remains “lacklustre” due to factors
including the ongoing conflict in Ukraine, as well as rises in interest
rates imposed by central banks to try and curb inflation.

> What the hell is going on in the bike industry?

Due to its strength in componentry, Shimano is something of a bellwether
for the cycling industry as a whole, and despite posting record sales last
year has previously cautioned that the growth driven by the boom in bicycle
sales at the height of the coronavirus pandemic would be unsustainable in
the coming years.

One of the effects of that is that that levels of inventory were higher
than usual, a situation that still subsists according to Shimano’s
third-quarter financial results, released today.

A separate detailed breakdown of its turnover by business segment and
geographical market (link is external)reveals that after a fall of 16.7 per
cent in Europe – a market that in 2022 made up 57.1 per cent of total
segment sales – during the first six months of 2023, bicycle component
sales there are forecast to fall by 50.2 per cent in the second half of the
year.

Commenting specifically on the cycling segment which accounts for a little
over three quarters of its total revenue, the business said: “Although the
strong interest in bicycles [during the pandemic] cooled down, interest in
bicycles continued to be high as a long-term trend. On the other hand,
market inventories generally remained high, despite ongoing supply and
demand adjustments.

“Overseas, in the European market, the strong interest in bicycles
continued in our major market, namely, Germany and Benelux countries, and
retail sales of completed bicycles were strong. Market inventories,
however, remained at high levels.

“In the North American market, retail sales of completed bicycles remained
weak and market inventories were at a consistently high level, despite some
progress in inventory adjustment.

“In the Asian, Oceanian and Central and South American markets, although
interest in bicycles was firm, retail sales of completed bicycles remained
somewhat sluggish due to cooling consumer confidence on account of rising
inflation and economic uncertainty, and market inventories were at a high
level. However, in the Chinese market, sales remained strong, especially
for road bikes, owing to the continued popularity of outdoor sports
cycling, and market inventories remained at an appropriate level.

“In the Japanese market, retail sales were somewhat sluggish as affected by
the soaring price of completed bicycles due to yen depreciation and
pullbacks in consumer spending and market inventories remained somewhat
high,” the company added.

Despite its financial performance, Shimano’s shares rose 3.95 per cent in
trading on the Tokyo Stock Exchange, although they remain 39.3 per cent
below the all-time high of ¥35,470 (£195.15) achieved in July 2021 when the
benefits of the pandemic-driven boom were at their height.

<https://road.cc/content/news/shimano-global-cycling-market-remains-weak-304691>

--
Spike

On 04/11/2023 12:00 pm, Spike wrote:
>
> Bike industry turmoil: Shimano says global cycling market remains “weak” as
> segment sales fall by a quarter – and worse to come?
>
> Japanese components giant hails “favourable” response to new groupsets –
> but sales in key European market are on the slide and forecast to halve in
> the second half of 2023
>
> by SIMON_MACMICHAEL
> WED, OCT 25, 2023 11:59
>
> Shimano has said that the global cycling market remains “weak” as the
> company revealed that sales of bicycle components fell by a quarter during
> the opening nine months of the year – and detailed figures published by the
> Japan-based components giant reveal that sales of bicycle components in the
> key European market are hardest hit, and are forecast to drop by half in
> the second half of 2023.
>
> In its third-quarter 2023 financial statement (link is external), Shimano –
> which last month issued a global product recall of 760,000 Dura-Ace and
> Ultegra cranksets after a reported 4,500 instances of failure – highlighted
> that new launches this year including the 12-speed 105 and gravel-specific
> GRX groupsets had met with “a favourable” reception.
>
>> “About time” – Cyclists react to Shimano crank recall after more than 4,500 incidents
>
> However, overall sales within the bicycle components section fell by 24.8
> per cent compared to the first nine months of 2022, standing at ¥289,443
> million (£1.59 billion). Operating income within the segment fell by nearly
> half, down 48.8 year on year to ¥55,917 million (£0.31 billion).
>
> The company’s other major product segment, fishing tackle, saw sales edge
> upwards by 3.4 per cent to reach ¥85,472 million (£0.47 billion), with
> operating income of ¥16,200 million (£0.09 billion), down 7.3 per cent on
> the previous year.
>
> Group sales for the period were ¥375,264 million (£2.06 billion), down 19.7
> per cent on the first nine months of 2022, generating operating income of
> ¥72,086 million (£0.4 billion), a decline of 43.8 per cent.
>
> Shimano said that the global economy remains “lacklustre” due to factors
> including the ongoing conflict in Ukraine, as well as rises in interest
> rates imposed by central banks to try and curb inflation.
>
>> What the hell is going on in the bike industry?
>
> Due to its strength in componentry, Shimano is something of a bellwether
> for the cycling industry as a whole, and despite posting record sales last
> year has previously cautioned that the growth driven by the boom in bicycle
> sales at the height of the coronavirus pandemic would be unsustainable in
> the coming years.
>
> One of the effects of that is that that levels of inventory were higher
> than usual, a situation that still subsists according to Shimano’s
> third-quarter financial results, released today.
>
> A separate detailed breakdown of its turnover by business segment and
> geographical market (link is external)reveals that after a fall of 16.7 per
> cent in Europe – a market that in 2022 made up 57.1 per cent of total
> segment sales – during the first six months of 2023, bicycle component
> sales there are forecast to fall by 50.2 per cent in the second half of the
> year.
>
> Commenting specifically on the cycling segment which accounts for a little
> over three quarters of its total revenue, the business said: “Although the
> strong interest in bicycles [during the pandemic] cooled down, interest in
> bicycles continued to be high as a long-term trend. On the other hand,
> market inventories generally remained high, despite ongoing supply and
> demand adjustments.
>
> “Overseas, in the European market, the strong interest in bicycles
> continued in our major market, namely, Germany and Benelux countries, and
> retail sales of completed bicycles were strong. Market inventories,
> however, remained at high levels.
>
> “In the North American market, retail sales of completed bicycles remained
> weak and market inventories were at a consistently high level, despite some
> progress in inventory adjustment.
>
> “In the Asian, Oceanian and Central and South American markets, although
> interest in bicycles was firm, retail sales of completed bicycles remained
> somewhat sluggish due to cooling consumer confidence on account of rising
> inflation and economic uncertainty, and market inventories were at a high
> level. However, in the Chinese market, sales remained strong, especially
> for road bikes, owing to the continued popularity of outdoor sports
> cycling, and market inventories remained at an appropriate level.
>
> “In the Japanese market, retail sales were somewhat sluggish as affected by
> the soaring price of completed bicycles due to yen depreciation and
> pullbacks in consumer spending and market inventories remained somewhat
> high,” the company added.
>
> Despite its financial performance, Shimano’s shares rose 3.95 per cent in
> trading on the Tokyo Stock Exchange, although they remain 39.3 per cent
> below the all-time high of ¥35,470 (£195.15) achieved in July 2021 when the
> benefits of the pandemic-driven boom were at their height.
>
> <https://road.cc/content/news/shimano-global-cycling-market-remains-weak-304691>

Yes - this story came up on my Google home page.

Quite how anyone expected the lockdown market conditions to persist is
unclear.

On 5/11/23 03:06, JNugent wrote:
> On 04/11/2023 12:00 pm, Spike wrote:
>>
>> Bike industry turmoil: Shimano says global cycling market remains
>> “weak” as
>> segment sales fall by a quarter – and worse to come?
>>
>> Japanese components giant hails “favourable” response to new groupsets –
>> but sales in key European market are on the slide and forecast to
>> halve in
>> the second half of 2023
>>
>> by SIMON_MACMICHAEL
>> WED, OCT 25, 2023 11:59
>>
>> Shimano has said that the global cycling market remains “weak” as the
>> company revealed that sales of bicycle components fell by a quarter
>> during
>> the opening nine months of the year – and detailed figures published
>> by the
>> Japan-based components giant reveal that sales of bicycle components
>> in the
>> key European market are hardest hit, and are forecast to drop by half in
>> the second half of 2023.
>>
>> In its third-quarter 2023 financial statement (link is external),
>> Shimano –
>> which last month issued a global product recall of 760,000 Dura-Ace and
>> Ultegra cranksets after a reported 4,500 instances of failure –
>> highlighted
>> that new launches this year including the 12-speed 105 and
>> gravel-specific
>> GRX groupsets had met with “a favourable” reception.
>>
>>> “About time” – Cyclists react to Shimano crank recall after more than
>>> 4,500 incidents
>>
>> However, overall sales within the bicycle components section fell by 24.8
>> per cent compared to the first nine months of 2022, standing at ¥289,443
>> million (£1.59 billion). Operating income within the segment fell by
>> nearly
>> half, down 48.8 year on year to ¥55,917 million (£0.31 billion).
>>
>> The company’s other major product segment, fishing tackle, saw sales edge
>> upwards by 3.4 per cent to reach ¥85,472 million (£0.47 billion), with
>> operating income of ¥16,200 million (£0.09 billion), down 7.3 per cent on
>> the previous year.
>>
>> Group sales for the period were ¥375,264 million (£2.06 billion), down
>> 19.7
>> per cent on the first nine months of 2022, generating operating income of
>> ¥72,086 million (£0.4 billion), a decline of 43.8 per cent.
>>
>> Shimano said that the global economy remains “lacklustre” due to factors
>> including the ongoing conflict in Ukraine, as well as rises in interest
>> rates imposed by central banks to try and curb inflation.
>>
>>> What the hell is going on in the bike industry?
>>
>> Due to its strength in componentry, Shimano is something of a bellwether
>> for the cycling industry as a whole, and despite posting record sales
>> last
>> year has previously cautioned that the growth driven by the boom in
>> bicycle
>> sales at the height of the coronavirus pandemic would be unsustainable in
>> the coming years.
>>
>> One of the effects of that is that that levels of inventory were higher
>> than usual, a situation that still subsists according to Shimano’s
>> third-quarter financial results, released today.
>>
>> A separate detailed breakdown of its turnover by business segment and
>> geographical market (link is external)reveals that after a fall of
>> 16.7 per
>> cent in Europe – a market that in 2022 made up 57.1 per cent of total
>> segment sales – during the first six months of 2023, bicycle component
>> sales there are forecast to fall by 50.2 per cent in the second half
>> of the
>> year.
>>
>> Commenting specifically on the cycling segment which accounts for a
>> little
>> over three quarters of its total revenue, the business said: “Although
>> the
>> strong interest in bicycles [during the pandemic] cooled down,
>> interest in
>> bicycles continued to be high as a long-term trend. On the other hand,
>> market inventories generally remained high, despite ongoing supply and
>> demand adjustments.
>>
>> “Overseas, in the European market, the strong interest in bicycles
>> continued in our major market, namely, Germany and Benelux countries, and
>> retail sales of completed bicycles were strong. Market inventories,
>> however, remained at high levels.
>>
>> “In the North American market, retail sales of completed bicycles
>> remained
>> weak and market inventories were at a consistently high level, despite
>> some
>> progress in inventory adjustment.
>>
>> “In the Asian, Oceanian and Central and South American markets, although
>> interest in bicycles was firm, retail sales of completed bicycles
>> remained
>> somewhat sluggish due to cooling consumer confidence on account of rising
>> inflation and economic uncertainty, and market inventories were at a high
>> level. However, in the Chinese market, sales remained strong, especially
>> for road bikes, owing to the continued popularity of outdoor sports
>> cycling, and market inventories remained at an appropriate level.
>>
>> “In the Japanese market, retail sales were somewhat sluggish as
>> affected by
>> the soaring price of completed bicycles due to yen depreciation and
>> pullbacks in consumer spending and market inventories remained somewhat
>> high,” the company added.
>>
>> Despite its financial performance, Shimano’s shares rose 3.95 per cent in
>> trading on the Tokyo Stock Exchange, although they remain 39.3 per cent
>> below the all-time high of ¥35,470 (£195.15) achieved in July 2021
>> when the
>> benefits of the pandemic-driven boom were at their height.
>>
>> <https://road.cc/content/news/shimano-global-cycling-market-remains-weak-304691>
>
> Yes - this story came up on my Google home page.
>
> Quite how anyone expected the lockdown market conditions to persist is
> unclear.

Just as well I ride a non-electric clunker built like a brick s***house
which will probably last me for ever.
And it keeps me fit in my old age!

On 05/11/2023 10:53 am, Peter Keller wrote:
> On 5/11/23 03:06, JNugent wrote:
>> On 04/11/2023 12:00 pm, Spike wrote:
>>>
>>> Bike industry turmoil: Shimano says global cycling market remains
>>> “weak” as
>>> segment sales fall by a quarter – and worse to come?
>>>
>>> Japanese components giant hails “favourable” response to new groupsets –
>>> but sales in key European market are on the slide and forecast to
>>> halve in
>>> the second half of 2023
>>>
>>> by SIMON_MACMICHAEL
>>> WED, OCT 25, 2023 11:59
>>>
>>> Shimano has said that the global cycling market remains “weak” as the
>>> company revealed that sales of bicycle components fell by a quarter
>>> during
>>> the opening nine months of the year – and detailed figures published
>>> by the
>>> Japan-based components giant reveal that sales of bicycle components
>>> in the
>>> key European market are hardest hit, and are forecast to drop by half in
>>> the second half of 2023.
>>>
>>> In its third-quarter 2023 financial statement (link is external),
>>> Shimano –
>>> which last month issued a global product recall of 760,000 Dura-Ace and
>>> Ultegra cranksets after a reported 4,500 instances of failure –
>>> highlighted
>>> that new launches this year including the 12-speed 105 and
>>> gravel-specific
>>> GRX groupsets had met with “a favourable” reception.
>>>
>>>> “About time” – Cyclists react to Shimano crank recall after more
>>>> than 4,500 incidents
>>>
>>> However, overall sales within the bicycle components section fell by
>>> 24.8
>>> per cent compared to the first nine months of 2022, standing at ¥289,443
>>> million (£1.59 billion). Operating income within the segment fell by
>>> nearly
>>> half, down 48.8 year on year to ¥55,917 million (£0.31 billion).
>>>
>>> The company’s other major product segment, fishing tackle, saw sales
>>> edge
>>> upwards by 3.4 per cent to reach ¥85,472 million (£0.47 billion), with
>>> operating income of ¥16,200 million (£0.09 billion), down 7.3 per
>>> cent on
>>> the previous year.
>>>
>>> Group sales for the period were ¥375,264 million (£2.06 billion),
>>> down 19.7
>>> per cent on the first nine months of 2022, generating operating
>>> income of
>>> ¥72,086 million (£0.4 billion), a decline of 43.8 per cent.
>>>
>>> Shimano said that the global economy remains “lacklustre” due to factors
>>> including the ongoing conflict in Ukraine, as well as rises in interest
>>> rates imposed by central banks to try and curb inflation.
>>>
>>>> What the hell is going on in the bike industry?
>>>
>>> Due to its strength in componentry, Shimano is something of a bellwether
>>> for the cycling industry as a whole, and despite posting record sales
>>> last
>>> year has previously cautioned that the growth driven by the boom in
>>> bicycle
>>> sales at the height of the coronavirus pandemic would be
>>> unsustainable in
>>> the coming years.
>>>
>>> One of the effects of that is that that levels of inventory were higher
>>> than usual, a situation that still subsists according to Shimano’s
>>> third-quarter financial results, released today.
>>>
>>> A separate detailed breakdown of its turnover by business segment and
>>> geographical market (link is external)reveals that after a fall of
>>> 16.7 per
>>> cent in Europe – a market that in 2022 made up 57.1 per cent of total
>>> segment sales – during the first six months of 2023, bicycle component
>>> sales there are forecast to fall by 50.2 per cent in the second half
>>> of the
>>> year.
>>>
>>> Commenting specifically on the cycling segment which accounts for a
>>> little
>>> over three quarters of its total revenue, the business said:
>>> “Although the
>>> strong interest in bicycles [during the pandemic] cooled down,
>>> interest in
>>> bicycles continued to be high as a long-term trend. On the other hand,
>>> market inventories generally remained high, despite ongoing supply and
>>> demand adjustments.
>>>
>>> “Overseas, in the European market, the strong interest in bicycles
>>> continued in our major market, namely, Germany and Benelux countries,
>>> and
>>> retail sales of completed bicycles were strong. Market inventories,
>>> however, remained at high levels.
>>>
>>> “In the North American market, retail sales of completed bicycles
>>> remained
>>> weak and market inventories were at a consistently high level,
>>> despite some
>>> progress in inventory adjustment.
>>>
>>> “In the Asian, Oceanian and Central and South American markets, although
>>> interest in bicycles was firm, retail sales of completed bicycles
>>> remained
>>> somewhat sluggish due to cooling consumer confidence on account of
>>> rising
>>> inflation and economic uncertainty, and market inventories were at a
>>> high
>>> level. However, in the Chinese market, sales remained strong, especially
>>> for road bikes, owing to the continued popularity of outdoor sports
>>> cycling, and market inventories remained at an appropriate level.
>>>
>>> “In the Japanese market, retail sales were somewhat sluggish as
>>> affected by
>>> the soaring price of completed bicycles due to yen depreciation and
>>> pullbacks in consumer spending and market inventories remained somewhat
>>> high,” the company added.
>>>
>>> Despite its financial performance, Shimano’s shares rose 3.95 per
>>> cent in
>>> trading on the Tokyo Stock Exchange, although they remain 39.3 per cent
>>> below the all-time high of ¥35,470 (£195.15) achieved in July 2021
>>> when the
>>> benefits of the pandemic-driven boom were at their height.
>>>
>>> <https://road.cc/content/news/shimano-global-cycling-market-remains-weak-304691>
>>>
>>
>> Yes - this story came up on my Google home page.
>>
>> Quite how anyone expected the lockdown market conditions to persist is
>> unclear.
>
> Just as well I ride a non-electric clunker built like a brick s***house
> which will probably last me for ever.
> And it keeps me fit in my old age!

:-)