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news
2023 Dauphine Shimano neutral support - 2.jpegShimano bike component sales fall by 18% as company cites “weak” demand for products
The difficulties facing seemingly all corners of the cycling industry in 2023 appear to show no signs of relenting, with Shimano today reporting a 17.7 percent fall in sales of bicycle components for the first half of the year and a 40 percent drop in operating profit.
Following a record year in 2022, the Japanese brand’s predicted slowdown for 2023 has proved even sharper than expected. According to today’s report, net sales in the brand’s bicycle division fell to ¥205 billion (around £1.1 billion), while the company’s operating profit fell by around £230 million (39.5 percent).
Shimano, the world’s largest manufacturer of bike components, says the figures – which have forced the company to revise its forecasts downwards for the second financial quarter in a row after a sluggish start to 2023 – are a result of “weak” demand for its products in key markets across the world.
> Shimano’s first quarter sales worse than expected despite already lowered projections
In Europe, the company says, demand for complete bikes was “somewhat low” and industry inventories “remained high”, a result Shimano claims is partly due to “unfavourable weather conditions in early spring”.
A similar story appears to be the case in the North American market, where Shimano says “retail sales of completed bicycles remained weak and market inventories were at a consistently high level”.
“Sluggish sales” in its Asian, Oceanian, and Central and South American markets, meanwhile, were attributed to a lack of consumer confidence due to rising inflation, with interest in bikes nevertheless remaining “firm”.
The company also noted that the continuing production cutbacks at factories are making it “difficult” to absorb the rise in manufacturing costs.
> Shimano’s cycling sales hit record high despite slowing demand
After recording a record revenue of £3.2 billion in 2022, two consecutive quarters of falling sales this year has again prompted Shimano to revise its forecasts for 2023. The Osaka-based brand now says it is expecting sales of ¥450 billion (£2.48 billion) for the year, which would mark a 40 percent fall on its 2022 sales. That figure is also down from the ¥460 billion (£2.53 billion) forecast at the end of the first quarter, which itself was below the ¥500 billion in sales expected at the start of the year.
These downward trends were reflected on the Tokyo stock market, where Shimano’s shares fell by 3.8 percent on Wednesday, after dropping by 5.8 percent when the figures were initially released.
However, Shimano remains confident about the long-term success of the cycling industry, as it experiences a slowdown in the wake of the Covid-19 lockdown-influenced boom of recent years.
“Although the strong interest in bicycles cooled down as progress was made toward recovery to pre-Covid-19 day-to-day routines, interest in bicycles continued as a long-term trend,” the company said in a statement today.
The cooling demand, delayed fulfilment, and high inventory levels cited by Shimano have affected nearly all sections of the bike industry during a difficult 2023.
Last week, UK-based distributor FLi ceased trading with immediate effect, with director Colin Williams citing the impact of Brexit, the complexities and restrictions surrounding UK and EU trading, and the difficulties facing the industry in the post-Covid lockdown period as the main reasons behind the distributor’s demise.
Meanwhile in May, Livingston-based distributor 2pure entered administration, just months after the company announced that it was restructuring to focus solely on the cycling industry, following what it described as a “highly volatile” 2022 caused by macro-economic events in the wake of the Covid-19 pandemic and Russia’s invasion of Ukraine.
And in March, Moore Large, the leading UK distributor for well-known brands such as Tern Bicycles, Lake, Forme, ETC, Emmelle, and MeThree, entered liquidation, leading to its £35 million product inventory being auctioned off.
After obtaining a PhD, lecturing, and hosting a history podcast at Queen’s University Belfast, Ryan joined road.cc in December 2021 and since then has kept the site’s readers and listeners informed and enthralled (well at least occasionally) on news, the live blog, and the road.cc Podcast. After boarding a wrong bus at the world championships and ruining a good pair of jeans at the cyclocross, he now serves as road.cc’s senior news writer. Before his foray into cycling journalism, he wallowed in the equally pitiless world of academia, where he wrote a book about Victorian politics and droned on about cycling and bikes to classes of bored students (while taking every chance he could get to talk about cycling in print or on the radio). He can be found riding his bike very slowly around the narrow, scenic country lanes of Co. Down.
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45 comments
Cycling has always been the sport of the working class people..
With the current price of living situation, the extra's like a new bike get postponed or take a lot longer to save for.
I tend to turn to secondhand parts, just bought and installed a ultegra 8070 di2 group to my road bike.
shimano went stupid-expensive for the stupid-rich that can afford it- and there aint as many to replace who they lost in the process.
There could be another explanation. Perhaps they made out like bandits during covid as many people bought bikes and fishing gear (along with some stockpiling of stock in the market), then overshot on forecasts post-pandemic, and now what we're really seeing is some kind of "regression to the mean" where figures are returning to those similar to the before-times. It would be worth digging into revenue & profit up to 2019 and see how it compares to now.
Yeah indeed. Comparison to a moving, weighted average that damped out the pandemic effect would be more interesting.
This point was clearly made in the article.. did you even read it?
“Although the strong interest in bicycles cooled down as progress was made toward recovery to pre-Covid-19 day-to-day routines, interest in bicycles continued as a long-term trend,” the company said in a statement today.
I had DA 9000 on the 'posh iron' for a long time. It was beginning to show its age, so last year, due to a good offer and having quite a few vouchers for Sigma, I decided to upgrade the levers and mechs to 9150 and go Di2. (I then shelled out hundreds for all the somewhat hidden extras you need for Di2).
My plan was to upgrade other components as funds allowed over time. I'm not a rich dentist but like kit and once you've had the best stuff it's hard to go down a level - even if your own performance level has!
A few months ago I started looking for 9100 rim brakes and the chainset. It's been impossible to get them anywhere. Even on eBay there's no new old stock. I finally managed to get the calipers imported from Spain. Getting things from Europe is now more tricky. Some shops have a spend limit before they'll post; others leave you open to extortionate import and handling fees. The chainset is just unavailable. It amazes me the speed that the top of the line stuff has been discontinued and is just unavailable as soon as the 9200 has been released. Especially as they are not backward compatible like the last few generations have been. I read, despite being technically incompatible, the 9200 chainset can work with 11 speed components. But the finish is a bit different and it's brand new so close to RRP and I'd rather it matched with no issues.
Feel a bit miffed.
In happier news, the 'push iron' has most graciously accepted 9000 hand-me-downs.
Agreed. The ever higher-frequency compatibility changes are annoying.
If sales are low, but inventory is high, can they tell me why it took 8 weeks to get a new cassette, just because it was a 10 speed?
Maybe if they supported their previous models a bit longer instead of jumping to the next shiny thing, they might do a bit better
Who would have thought that if you make your products increasing unaffordable, your customers will be unable to afford them.
Unfortunately like most big companies,Shimano has become complacent and the quality of their products are becoming poorer in quality in their hast to become fashionable instead.
I am not surprised they have lost their financial value!
Evidence please?
outside of the bonded cranks fiasco I'm not aware of any general decrease in quality.
increase in price however....
The only evidence I have is as a cycle technician working on customers and my personal cycles.
My experience as a mechanical engineer within the tooling industry,car and motorcycle dealerships leads me to my conclusions.
Shimano quality is definitely reducing.
At this moment in time,shimanos hydraulic brakes , particularly the calipers have leaking issues causing contamination issues.
The internal hub gears are failing much more regularly.
I own many Shimano internal hub geared bikes and have repaired many over the last 40+ years.
STI lever problems,crank arm problems,cable friction, di2,steps motor gearbox and electronic issues.
All these issues they constantly deny instead of accepting them and improving the product.
Companies can no longer cover up issues.
The freedom of the internet is wonderful for finding out common problems with products.
They have become complacent in my opinion.
It is great that new cycle cycle component manufacturers are challenging the big players with better products.
I think you must be referring to confirmation bias. Nobody writes in to a blog to say nothing untoward happened to their gear, everything tickety-boo. And I confess, I'm curious as to why any car dealership employs a mechanical engineer but maybe I'm visiting the wrong ones.
Nobody writes in to a blog to say nothing untoward happened to their gear, everything tickety-boo
But they do on a messageboard: Sora 9-speed is really great, as are TRP Spyre disc brakes.
As a mechanic by trade and having worked at various dealers, you had to be a qualified mechanic to be employed; mechanical engineer? that's a completely different field, such as automotive manufacturing, not service and repair.
Based on the workshop experience (new and used bikes):
* tiny road disc caliper gaps resulting in frequent rubbing issues e.g. Tiagra, GRX
* absolute garbage new gen shadow style 9sp rear derailleurs that often cannot be indexed correctly evwn with Optislick cables ( I don't mean more fiddly or sensetive but impossible to adjust reliably). On some bikes, the chain rubs against the cage also.
* STI shifter diaphrams prone to damage/leaks when retracting the caliper pistons
* cracking ceramic pistons if you rectract them at more than 0.0001 degree
* poor quality freehubs on basic wheels resulting in excessive play and short lifespan
* 4 pot brakes very time consuming to bleed well for the firm feel
Part of the problem is the fact that modern bikes are more complex than they need to be.
The problem I think is, and Shimano are as guilty as many other companies in that they continually change things for no other reason than to get people to part with their cash, and nothing works universally, you must get the latest stuff continually. People are getting wise to it, and cannot afford to keep changing to the latest groupset. It's getting to the point now that last years groupset is not compatible with this years, etc.
Agreed!
I keep saying - The Multinational Cycling companies are really marketing companies who just happen to sell bikes, components and accessories!
I'm not sure people are getting wise though.
Even the Holy Grail of bikes, Colnago, only offer the new C68 frame for electronic groupsets only. No thanks, I will keep my beautiful C60 with Super Record RS mechanical groupset. If Campag go the way Shimano are going with electronic groupsets then I will buy a couple of mechanical Super Record groupsets and store them for a couple of my bikes.
The underlying common theme is often one due to the memetic plague spread now through many business enterprises: "... all that matters is the bottom line". In practice this often turns out to generate a series of changes to the business that degrades their goods & services, eventually causing the opposite effect of increased profit because the customer-duping and neglect become widely recognised and we "vote with out wallets".
The fundamental mistake of many modern businesses turns out to be that an accountant or some other greedlet persuades them that they are there not so much to make useful things but to make loadsa money. As fast as possible.
Once upon a time, businesses of many kinds were generated out of a desire to improve the human world, as business motives were enmeshed in a matrix of other motives and values besides the profit motive and cash value. Many of these other value systems are fading or gone, leaving only the neolib fragmented pseudo-society of atomised individuals, with no power or traction with other humans other than "what I can afford to buy and display".
On the other hand, humans are highly social and even now there's resistance to the wasteland conditions of Toryspivdom and even that of Trumpistan! I hope.
Your once-upon-a-time never existed. Rose tinted spectacles.
Except I can get still get plenty of parts for my late-70s Colnago. There are still new parts being made for the pull of the brake calipers, the BB standard (Italian threaded), etc., etc.. Cause those standards were standards for so long, there's a huge market for parts.
My /new/ single-speed/fixed gear will accept parts (sprockets, chains, hubs/wheels) from probably 50+ years - and new parts will fit on track bikes from 50 years ago.
The manufacturers have been deliberately splintering the standards and compatibility. None of the modern BB or groupset standards from last 15 odd years get long production runs, so none build up enough market presence to create that long-term secondary manufacturer base.
Yes, that's it - older stuff may be less swish than a lot of newer stuff but the newer stuff is, er, cycled rapidly through a fashion cycle, often disappearing in just a decade or less.
Just now there's a fellow in the forums looking for a 10-speed Shimano Ultegra STI lever. It seems the things are no longer availabe as new or spare parts. You can, though, buy highly scuffed and possibly very worn second-hand items on ebay .... at £100 - £200 a pair! (For now).
I notice also that once easy to obtain Shimano spare sprockets for cassettes are now sold by only a tiny number of cycle stuff retailers, who only have fairly recent stuff. Such spares seem to be available now only at inflated prices, from a very few retailers, for mostly only recent iterations of their fashion cycle.
Sounds like a business opportunity - get the hammer and rivet punch out!
Shimano back in the 70's - 90's certainly did have a quality first mindset; the problem with quality Asian goods originating from Japan and Taiwan, is that the low cost of Chinese goods, which started making inroads back in the 80's, forced Shimano et al to compete on price, which necessarily means cutting back on quality; blame john and jane citizen for buying on price..
I think the problem is being persuaded by measureable shorter term rewards at the expense of the longer term fundamentals of the business - which ultimately comes from satisfied customer loyalty. Any accountant can show an immediate increase in profit on a spreadsheet, it takes a more visionary leader to hold fast to longer term values.
let's hope this short termism does not spread outside the business environment. what next? prioritisation of the economy over the next 24 months over the long term viability of the planet to support life as we know it?
Why change to the latest groupset? There are some consumables like chains and cassettes but I don't know anyone who had to change their shifters or cranks or derailleur due to wear.
I ride a 10+ old groupset (with used brifters of unknown age that still work like a dream) and don't intend to change neither bike or groupset. Why? The system is vastly superior than my 1990s cheap MTB, so still very happy.
It is still a shame though that bike reviews ignore cheaper groupsets like Sensah. This has created a false sense of monopoly.
Some people have to change to the latest groupset for exactly the reasons highlighted by myself, and others. You need some new levers, for example. The latest model of levers are incompatible with the previous model. The previous model levers are no longer available. So, you are forced to replace the groupset, or search on ebay for someone else's second hand worn levers.
You don't know anyone, well I had to change groupset because I had worn the Ultegra 10 speed levers out on one of my bikes, which I had ridden over 70,000 miles on. I wore out the chainset also, but managed to obtain an as new second hand one from a friend. I could find some pretty rough condition second hand levers on ebay, but the price being asked was too much for the condition of them. No new ones were available. So it was easier to buy a new groupset, I was lucky to be able to buy a full 11 speed 105 groupset from Wiggle at a crazy price. I now have an almost complete 10 speed Ultegra groupset in a box which I will never use again.
Shimano hubs are another issue. The freehubs are sealed, so when they wear you need to buy a new freehub. I have two pairs of wheels with worn out freehubs. The Shimano freehubs are all different, the ones I have are now obsolete and unavailable, so the wheels are useless.
Another part which is much lower quality these days are rims. Particularly the Mavic Open Pro rims I used to swear by. On my early bikes in the 80s, Mavic rims just did not wear out, even in shitty weather. But these days, until I went disc, I wouldn't get two winters out of my rims on my winter bike, which was only used between October and March.
The answer to this, I have found, is to buy Hope products. Made in the UK, less than an hour from where I live, and parts for everything are freely available, everything from freehubs to brake calipers, spares are available, with fantastic exploded parts diagrams on the Hope website. They make pretty much everything in house, rather than reply on a third party supplier, they will buy the machine to make the part themselves.
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