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.
45 thoughts on “Shimano bike component sales fall by 18% as company cites “weak” demand for products”
That’s all very well but when
That’s all very well but when are they launching the new grx di2 12 speed?
Yes, I really need that! At
Yes, I really need that! At least until 13 speed arrives.
The problem I think is, and
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!
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,
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.
Cycloid wrote:
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
Your once-upon-a-time never existed. Rose tinted spectacles.
Secret_squirrel wrote:
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.
Paul J wrote:
Your once-upon-a-time never existed. Rose tinted spectacles.
— Paul J 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.— Secret_squirrel
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.
Cugel wrote:
Sounds like a business opportunity – get the hammer and rivet punch out!
Shimano back in the 70’s – 90
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
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.
Sriracha wrote:
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
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
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.
Wow, you ride some serious
Wow, you ride some serious miles, then you will probably need some replacement parts, but I believe the average cyclist cannot outlast the shimano components.
On your STI issue, couldn’t you use other 10speed shifters even maybe from Microshift? I would try researching that before putting my hand deeply into my pockets, I have some crazy combination of MTB road transmission, and mysteriously it works.
cyclisto wrote:
Yes, give Shimano (and some others) their due: they produce stuff that’s generally well-made, resilient and long lasting. Yet even these good parts can and do wear.
When they do, it would be advantageous to the user (and the planet) if a replacement could be bought or the original fixed with a spare replacement part. But the spares provision is overwhelmed by the new! improved! marketing that makes newer stuff incompatable with older stuff.
Even Shimano must find it difficult to justify the ongoing manufacture of potential spare or replacement parts for older gruopsets, since the originals (as you mention) do last a long time. This fact added to the fashion cycle changing standards means that the market for spares becomes tiny, making their manufacture a costly nuisance for the maker – and perhaps the price of such a rare-spare outrageous.
However, needing a spare STI brifter that one can no longer obtain also obsoletes other related and still functional components of a groupset. That’s very wasteful.
Cugel wrote:
*cough* Ultegra cranks *cough*
hawkinspeter wrote:
An exception proving the rule, perhaps?
Since 2008, all the gubbins on me various bikes (seven of them) have been Shimano. (Used to be Suntour but they went bust and all the old racing bikes with it on got sold). Since becoming Shimano’d up, I can’t recall any of their bits going clanky. Well, one 2008 STI RH lever that went a bit funny for a month but then righted itself. Probably a cable gremlin that went orf elsewhere after a bit.
Even the wear parts (chains, brake blocks, etc.) take their time getting worn.
I started to cycle commute 35
I started to cycle commute 35 years ago, using a basic 15 speed mountain bike; I upgraded to 21 speed in the 90’s, buying a couple of quality cromoly framed bikes and have stuck with those 7 speed bikes ever since, although I’ve swapped out the 3 speed cranks for 1 x cranks; Shimano stopped making the high end 7 speed stuff, no demand, but keep churning out their lower end shifters, cassettes, etc., from their Malaysian and Indonesian factories; quality is very acceptable.
I think the idea that
I think the idea that companies change things to be incompatible for the sake of profit is a little jaded.
In product development, backward compatability is a millstone which stops you being able to innovate. If 2023 Shimano stuff was backward compatible with 2013 shimano stuff it wouldnt be fundamentally, step change, better than the 2013 product, just gradual improvement. As things stand, the current systems are much better than the older systems partly because they aren’t cross compatible.
They should continue to support the older products in my opinion but to keep the top of the line compatible with the older product just serves to make the top of the line worse than it could be.
I haven’t bought either a
I haven’t bought either a Dyson hoover or an Apple phone for this very reason of designed and wantonly deliberate obsolescence of accessories.
Maybe things have changed since my personal boycot of those brands, but the lesson is that a pissed off customer who resents being so blatantly gouged holds a grudge for a long time.
In some instances this is
In some instances this is correct but in others there would be little or no detriment in ensuring backwards capability.
Take SRAM AXS and the original eTap. Would it have been that difficult to have the AXS stuff also support the eTap standard?
When AXS makes the jump to 13 speed that could easily be offered as a firmware upgrade for the existing 12 speed stuff leaving existing users just needing to upgrade chain, cogs etc.
That would be an incredible thing for SRAM to do from a sustainability perspective. Will they? I won’t hold my breath.
Rich_cb wrote:
On the basis that their Wireless Blips have non-replaceable cells and are essentially a consumable, I’m going to stick my neck out and say no.
How would that be incredible
How would that be incredible for sustainability compared to just continuing to make 12 speed chains and cassettes? You make the choice to replace your perfectly functional drivetrain with the New Shiny Thing. Its not on them not to produce a better product so you can feel like you still have the best thing.
What you are describing is exactly the type of backwards compatibility millstone that stifles development.
How does it stifle
How does it stifle development?
It’s better for sustainability as people will be able to upgrade without needing to buy new equipment.
You may sneer at those who choose to upgrade but plenty of people do, isn’t it better for them to be able to do so in a more sustainable way?
Of course they change the
I don’t agree with you. Of course they change the groupset design to be incompatible with previous ones for profit reasons. It isn’t backward to ensure that next generation groupsets are fully compatible with all groupsets in the range, which they used to be. The reason for this is simple. Companies such as Shimano are run by accountants, if they can change a part in a lever which is plastic instead of alloy, they don’t care if they don’t last as long, because they have worked out how much more annual profit thay can make by saving 16p on every lever produced. And if they outlast warranty period, but not much longer, they will sell more levers.
Patrick9-32 wrote:
I can see that for some changes and am not upset that my rim brake cables won’t work on hydraulic discs – they’re clearly different, and the latter do have clear benefits in many situations.
But is the same true for chainsets/rings, freehubs, BBs and rear derailleurs – are they “much better” with each compatibility-breaking change?
I wonder how much of it is exploiting the increase in wealthy but credulous customers – the presence of whom has also attracted new suppliers, leading to an increasing plethora of standards for the likes of BBs at any one time, as well as compatibility issues over the years.
Unfortunately like most big
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?
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
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.
peasantpigfarmer[/quote wrote
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
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.
Sriracha wrote:
As a mechanic by trade and
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
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.
Who would have thought that
Who would have thought that if you make your products increasing unaffordable, your customers will be unable to afford them.
If sales are low, but
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
I had DA 9000 on the ‘posh
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
Agreed. The ever higher-frequency compatibility changes are annoying.
There could be another
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
Yeah indeed. Comparison to a moving, weighted average that damped out the pandemic effect would be more interesting.
This point was clearly made
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.
shimano went stupid-expensive
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.
Cycling has always been the
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.