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Shimano sales fall by 21% in first half of 2024 – but components giant says key European market remains “firm” despite serious delivery problems

While the latest report is more positive than the company’s previous forecast, Shimano says “the outlook will remain uncertain” due to high inventory levels and unfavourable weather conditions

Weeks after admitting that it is experiencing ongoing distribution problems, including “serious logistical challenges” and a “lower service quality of deliveries” with longer lead times as a result, Shimano has reported yet another significant drop in sales figures for the first half of 2024, as the component giant’s net sales between January and June fell by 20.7 per cent compared to the same period in 2023, which itself was almost 18 per cent down on the previous year.

However, despite blaming high global inventory levels and unfavourable weather conditions for this latest drop in sales, Shimano noted that retail sales were “firm” in the key market of Germany, Belgium, and the Netherlands, and strong in China, where the popularity of road bikes is currently growing.

2023 Dauphine Shimano neutral service 52-36T - 1.jpeg

> Shimano hit by delivery problems across Europe as brand admits "serious" logistical challenges, longer lead times and "lower service quality"

According to the somewhat mixed report, Shimano’s net bike component sales between January and June 2024 decreased year-on-year by 20.7 per cent to 162,594 million yen (£843 million), and its operating incomes decreased by 42.2. per cent to 24,328 million yen (£126m).

Nevertheless, these figures appear to represent a slight easing of the problems continuing to plague the bike industry, after Shimano reported in April a drop of 22.6 per cent in sales for the first quarter of 2024. Meanwhile, second-quarter bike division sales were down 18.9 per cent on the same period in 2023, a slight deceleration owing to the company’s more upbeat forecast.

“While the strong interest in bicycles continued as a long-term trend, supply and demand adjustments of completed bicycles continued, and global market inventories generally remained high,” Shimano said in statement.

“Overseas, in the European market, retail sales were firm in our major market, namely Germany and the Benelux countries. On the other hand, in other countries, sales were weak on account of delayed recovery in demand for completed bicycles, and market inventories remained high.”

Focusing on Europe specifically, Shimano expects bike component sales to increase by 6.6 per cent from 66,000 million yen (£342m) to 80,000 million yen (£415m) in the first half of 2024 – a boost for the company after European sales dropped by 46 per cent in the same period last year.

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This positive news comes despite Shimano’s European warehousing and distribution operations suffering ongoing problems since it was outsourced to logistics giant Kuehne + Nagel last year.

Earlier this month, Shimano said it was experiencing “serious logistical challenges” and a “lower service quality of deliveries” with longer lead times as a result due to the issues, with delivery problems reported in its Benelux region (Belgium, the Netherlands and Luxembourg).

The company have also started to deliver from another warehouse in France in response to the problems, which have had a knock-on effect for Shimano IBDs (independent bike dealers) across Europe.

Shimano’s communications manager Kim Edwards pulled no punches when explaining the less-than-ideal start to their relationship with Kuehne + Nagel, suggesting that the logistics provider’s performance in Belgium “is only slowly improving”.

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Meanwhile, along with the mixed outlook in Europe, Shimano has noted that retail sales in North America have softened, with inventory levels remaining high, while sales of completed bikes were weak in Oceania and Central and South America. However, retail sales of completed bikes and inventories are currently strong in China, where road bikes continue to grow in popularity.

“Under these market conditions, demand for Shimano 105 and other components for road bikes was firm,” Shimano said in its report.

“In addition, the Shimano Group received a favourable reception for its products, including a gravel-specific component Shimano GRX.”

However, though the sales figures for the first half of 2024 exceeded its previous forecast, Shimano concluded that “the outlook will remain uncertain mainly due to market inventories remaining at a high level and delays expected in resolving the remaining market inventories partly due to unfavourable weather conditions during the spring selling season in the European market”.

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Shimano’s rather varied outlook for 2024 comes after several years of challenges for the components giant.

Along with its current logistical and delivery problems in Europe, last summer the company set its much-reported crankset recall in motion, recalling Hollowtech II models, including two generations of the popular Ultegra and Dura-Ace cranksets totalling 760,000 cranksets, and affecting over 2.8 million worldwide.

Shortly after, the company was allegedly hit by a massive ransomware attack threatening to release confidential data, before an investigation suggested that workers at its Malaysian supplier were subjected to “slavery-like” exploitation.

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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4 comments

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Keesvant | 4 months ago
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More competition, and slow innovation.
On demand logistics rule the market these days.
4 of six cycle buddys are now using sram, was 4 to 1 last year.. (one older campa supr record)
Shimano is still my nr1 for road and gravel, though my mtb is sram now as shimano has badly dropped the ball on electric shifting there.

Avatar
Simon E | 4 months ago
2 likes

Quote:

Shimano expects bike component sales to increase by 6.6 per cent from 66,000 million yen (£342m) to 80,000 million yen (£415m) in the first half of 2024

Have I missed something or do those figures not equate to 6.6%?

Expecting component sales to increase by 21% is rather optimistic IMHO after the year-on-year net sales figure dropped by 20% in the first 6 months of the year.

Though how much of component sales is OEM (thereby relying on the sale of complete bikes) vs the aftersales market would be interesting to know. And I wonder how much has the competition - most notably SRAM - had an impact along with the mentioned outsourcing issues in Europe?

If the predictable and predicted post-Covid boom-then-bust has bottomed out then let's hope the market does improve. My LBS is certainly busy - despite a full complement of mechanics they couldn't book in my BB replacement for nearly 2 weeks. The other shop nearby (more MTB-focussed) has just expanded into the next door property, which I take as a positive sign.

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froze replied to Simon E | 4 months ago
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I'm not 100% convinced that logistics is the heart of the matter.

Since Covid SRAM sales have increased by 16%, and they are innovating faster than Shimano is.  Is this going to be a replay of history when Shimano innovated faster than Suntour?  Time will tell.  But that 16% increase in sales definitely took those sales from Shimano!

Add on top of SRAM sales increasing so did Campy sales, by 45% in the last 2 years.  Now Campy sales were quite low, so what impact did the 45% have?  Maybe 1 to 2 percent of the market?  If that is true then between SRAM and Campy sales going up Shimano is going down because of them, not because of logistic issues.

Shimano doesn't want people to know that SRAM and Campy are giving them a pounding, so they're blaming something else so we can't see what is really happening, which will make people wonder why, and the why is, the others are now making a better product at a better price than Shimano, and people are taking notice.

Avatar
Simon E replied to froze | 4 months ago
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froze wrote:

Is this going to be a replay of history when Shimano innovated faster than Suntour?

As things stand, I can't see it happening.

SRAM and Campagnolo are not supplying the OEM market anywhere near as widely as Shimano and they also don't have the breadth - 8 speed and up with flat bar and road shifting plus CUES , so perhaps it is more that Shimano have a different perspective on their future. The lower-end groupsets and components require sod-all R&D and shift bucketloads so focussing on who has the blingy-est 12 or 13 electronic speed groupset costing £4,000 is not useful. Shimano might not have the cachet but they certainly have reliability and longevity on their side (though not the Ultegra/DA crank failure saga).

While the logistics issue is confined to Europe the inventory issue is global. Bike sales have slumped and there is/has been loads of surplus stock.

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