Giant has sent the latest signal of the ongoing challenges facing the bike industry as its sales fell by 20 per cent in the first quarter of 2024 as post-tax profits slumped by 38 per cent.
The news is not surprising, coming weeks after Shimano reported a huge fall in sales for the same opening period of the calendar year, and follows on from Giant last month predicting a continued short-term “challenge” for the cycling industry having reported a fall in pre-tax profits of 45 per cent in 2023, while sales were down 16 per cent.
Today’s latest figures come in comparison to last year’s numbers from the first quarter and show that despite gains being made in the Chinese market, Europe and North America’s ongoing inventory issues stemming back to the post-pandemic period have continued to hit the business.
Giant Group’s consolidated sales fell by 20.2 per cent in the opening months of 2024, amounting to a total of NT$16.06 billion (£395,653,286). Post-tax profits of NT$520 million (£12,820,177) mean that figure has fallen by 37.8 per cent.
Giant opted to put a positive spin on the situation, highlighting that bicycle sales in China “remain strong” due to an “increasing trend in sports and recreation which supported the sales of mid to high-end bicycles”.
“With the launch of new models, Giant expects to see continue sales growth in China,” the brand predicted, adding that its new TCR model had “received positive feedback from Chinese consumers” at the China Bicycle Show earlier this month.
“As for Giant US and European, sales continue to be affected by inventory reductions,” it said.
While January, February and March suffered a significant sales slump, ranging between 17 and 27 per cent, April saw signs of improvement as Giant’s consolidated revenue only fell by 1.75 per cent on 2023.
The negative start to 2024 is a familiar story for the bike industry by now, Giant last month reporting significantly down financials for 2023 as a whole, the Taiwanese brand saying it remains “optimistic” with the industry’s long-term prospects and believes e-bikes are a key opportunity to “broaden [the] global cycling population”.
The “huge bicycle sales growth” in China appears to have continued into 2024, but demand in Europe and North America, notably for entry-level and mid-range products, remains weak.
It has been a busy start to the year for Giant, the rollout of its latest Defy road bike continuing after its unveiling in the autumn, and last month’s announcement of the release of a “lightest, most efficient TCR ever”.
The manufacturer also made headlines when it emerged that it would be suing Stages Cycling, the power meter brand that has ceased operations and laid off all staff last month.
Giant is suing Stages for £11 million worth of unpaid invoices, the bike brand having manufactured many of Stages’ products, with four former top executives from the US-based brand also having joined Giant.
20 thoughts on “Giant sales down 20% and profits slashed by 38% as bike industry challenges continue”
I did a double take on pre
I did a double take on pre-tax profilts. £12.8 million? For the world’s biggest bike maker? Even adding the 38% drop back in doesn’t exactly make profits big…
The corporate bike industries
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
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
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
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
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
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:
— Secret_squirrelSo 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
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:
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
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:
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:
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
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.
You don’t explain what a TCR
You don’t explain what a TCR is, so I assume this website is for professionals only.
And what the hell are NT$ ?
You need to explain such abbreviations or insider knowledge words at least once, in your articles, otherwise new readers will switch off and not come back. This is normal professional journalism. Regards
Total Compact Road (Giant’s
Total Compact Road (what Giant call their racing bikes with sloping top tubes)
New Taiwan Dollar
Come on. This article links
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?
I have some sympathy with the
I have some sympathy with the cost of materials being up, cost of groupsets etc.
But most bikes are made in China. Where are the cheaper models made with cheaper parts? Do they have a lock in contract with Shimano or similar?
And normally you’d have a sale at the end of the season and clear out your stock – but personally I hardly bother looking at sale stock now. Why would I when I can save 50% on cycle to work and get something new?
I can’t help but feel that
I can’t help but feel that Shimano and SRAM are going to have a nasty shock as groupsets are probably the most over priced element on a bike.
if Giant has any sense they’ll be working with the leading Chinese OEMs on 11speed groupsets.
Shimmy and SRAM are gonna lose market share big time in the next few years. Their products are overpriced and over marketed.
And SRAM have gone out of
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.