Giant sales down 20% and profits slashed by 38% as bike industry challenges continue

And SRAM have gone out of their way to minimise compatibility across group set components / introduce obsolescence in standards that just reduce choice for consumers.

They completely deserve the pain that's coming down the tracks.

Total Compact Road  (what Giant call their racing bikes with sloping top tubes)

New Taiwan Dollar

Come on. This article links twice to another article about the TCR. It also says straight away that the TCR is a bike model. Finally, the image right at the top of the page pictures a TCR and the caption says so. What exactly do you think is still missing?

The corporate bike industries collapsing due to low sales during a cost of living crisis in the UK. Those that jumped on the band wagon by increasing prices didn't expect the masses to say no! Profiteering when everyone is feeling the pinch isn't good business sense.they've shot themselves in the foot. You have CCR. Wiggle and Evan's which will be scooped up by Mike Ashley- Sports Direct. I don't expect those I've mentioned to survive under his stewardship. Very iffy to say the least. 
it's bad when a Bicycle costs more than a Car or Motorbike. Corporate greed is killing  the cycle industries. 

The numbers here are very interesting, if you look at the after tax profit margins, betwen last year and this first quarter they are only make around 3-4% profit margin. That to me is not corporate greed but an unstainable industry that lives of very small margins. It is surprising as I agree the price of new bikes is huge, but so it seems the cost of producing them

I had the same thought when I saw those numbers. The absolute amounts are just as important as the relative amounts, and these profits are surprisingly small even in the good years; in the bad years there isn't much margin before the profits completely disappear.

It's not the whole story though. Reduced profit may also reflect increased investment in the business e.g. factory / equipment / research / acquisitions.  On its own the profit figure isn't hugely informative - take Amazon as the best example of this - no dividends paid for years because all profit gets recycled into capital investment.

There is something fundamentally broken about the High end (anything over about a £400 BSO) bike business.   Probably far too many players with far too many products.

Look at the motorbike industry.  < 10 global players in the mid-high end motorbike market, but fairly stiff competition means you have have a far more mechanically complex product like a motorbike selling for similar prices to pushbikes.

Worked example.   Honda CBR600RR a 140mph capable superbike - for £10.5k - cheaper than the price of al Specialized SWorks grade Tarmac SL8.

Same for electric motorcycles. I get that adding lightness also adds $$$ but there are just as many weight weenies in the motorcycle enthusiast world

Secret_squirrel wrote:

Look at the motorbike industry.  < 10 global players in the mid-high end motorbike market, but fairly stiff competition means you have have a far more mechanically complex product like a motorbike selling for similar prices to pushbikes.

So why has Ducati been so successful when their bikes have often been overpriced, sometimes poorly finished and unreliable? (at least that was the case when I was in that market and they just kept on selling)

It's a pointless comparison. Try looking at the price of watches. When people spend hundreds, even thousands of pounds, and usually have multiple expensive watches, try explaining to them that "they all tell the time so you don't need to spend more than £50". Is the Swiss watch industry broken? No.

£170 for a pair of road tyres that won't last long. Integrated handlebars. Syncros Capital SL carbon wheels that cost £3,800 (CW review). A Garmin Edge 1040 costs as much as a decent smartphone. Don't tell anyone I told you, but you can get cheaper wheels and tyres that work perfectly well but these high-end products exist for a reason.

Most brands sell vastly more £1,000 bikes than £10,000 ones. The latter are considered very desirable, and you only have to ask a cycling website SEO or someone with access to google analytics to know that featuring bling stuff gets clicks.

If the bicycle industry is broken then they won't sell the expensive bikes and things will change.

Mind you, if you think anything over £400 is 'high end' then you must have time-travelled here from the 1980s. Did you use your dad's old Olivetti to type your comment?

Ducati is the wrong comparison, Ducati sell because they have the Italian sports heritage, and their bikes just always look and sound right.

how are Triumph or Norton doing ?

Honda have sold maybe half a million Honda CBRs in 20 years, volume always means costs come down, name a bicycle manufacture with that kind of volume of sales ? or even one who has been selling basically the same basic bike for that long.

stonojnr wrote:

Ducati is the wrong comparison, Ducati sell because they have the Italian sports heritage, and their bikes just always look and sound right.

how are Triumph or Norton doing ?

I don't know how marques are doing now but I see a lot of Triumphs out and about. My point about Ducati was that people were paying extra, sometimes a lot extra, for an inferior product because it was Italian and painted bright red. What is 'sports heritage'? It's marketing, plain and simple.

Absolutely but its very powerful marketing and it allows them to sell inferior product for lots of cash still, because the world loved seeing Rossi on a red bike.

No brand in the cycling industry has that kind of allure.

You need to compare as I said the kind of mid tier brands that have name recognition, but not the volume of the Japanese manufacturers.

stonojnr wrote:

You need to compare as I said the kind of mid tier brands that have name recognition, but not the volume of the Japanese manufacturers.

I fail to see why that is any more valid. The markets are not comparable, my point was about how some brands can sell overpriced, inferior products with powerful marketing.

At least no-one has resorted to the oh-so-predictable and incredibly lazy comparison of pro cycle racing with F1.

stonojnr wrote:

how are Triumph or Norton doing ?

 

Triumph's last accounts showed a £94 million profit on £775 million turnover, and Norton have just secured a £100 million investment for a new plant in Solihull from whence they will be producing new models from the end of this year. So both of them are doing quite well, really.

So Norton doing well, in the Rover cars style of doing well.

Norton went bust 4 years ago, not the first time in their history, Triumph itself was resurrected quite successfully after it went bust 40 years ago.

One of the things you don't really see in cycling, brands that get resurrected, they just kind of limp on, but they're better comparisons to the state of the motorcycle industry.