Shimano crank 'recall' cost £70m in 2024, as bicycle components giant's sales drop again amid "weak" cycling market

Shimano's latest financial accounts suggest its ongoing crank recall and inspection programme would cost the business £70 million in 2024. Elsewhere, the Japanese brand's bicycle component sales fell for the second year in a row, dropping by five per cent as operating income for its cycling division was down 17 per cent. 

The figures were today published in Shimano's consolidated financial results for 2024, the company stating that the year saw "moderate growth" to the global economy, but that economic "uncertainty" and "weak demand" in cycling had seen its net sales fall 4.9 per cent to ¥451billion (£2.36bn). However, overall the company reported its net income is up a quarter on 2023.

In the liabilities section of its accounts, Shimano notes the impact of the North America Hollowtech II crank recall and inspection programme elsewhere in the world. The document highlights "provision for product warranties", a later note explaining that this relates to expenditures "associated with free inspection and replacement of bonded 11-speed HOLLOWTECH II road cranksets". 

> Shimano Hollowtech crank failures, one year on — how the component giant's handling of this dangerous debacle is continuing to damage its reputation

There is a long-term figure for liabilities and also a current liabilities figure for "an amount expected to accrue within a year after the fiscal year-end". In total, for 2024, Shimano's provision for product warranties is listed as ¥13.3bn (£69.3m). Elsewhere, the accounts suggest other expenses around the voluntary recall dropped from ¥341m (£1.8m) in 2023 to ¥248m (£1.3m) in 2024, putting the total estimated cost at around £70m.

It is also worth noting that for 2023 Shimano published an "extraordinary losses" figure in its accounts which does not appear for 2024, further suggesting that the cost of the inspection programme and North America recall is reducing over time.

road.cc contacted Shimano for comment but was told the company would not be offering any statement beyond what is already included in the document.

Elsewhere in the accounts, Shimano reported its overall operating income decreased 22.2 per cent, but "net income attributable to owners of parent increased 24.8 per cent to 76,329 million yen".

In the company's bicycle components division, net sales decreased 5.2 per cent to ¥345billion (£1.8bn), and operating income decreased 17 per cent. However, it's worth noting that Shimano's bicycle component sales remain significantly higher than any of the pre-Covid years and have only fallen in comparison to the years through 2021-2023.

"While the strong interest in bicycles continued as a long-term trend, retail sales of completed bicycles were weak and market inventories remained high," the brand suggested. 

"Overseas, in the European market, retail sales of completed bicycles softened due to unfavourable weather conditions in early spring, and market inventories remained at a high level. In the North American market, although interest in bicycles was firm, retail sales of completed bicycles remained weak and market inventories were somewhat high.

"In the Asian, Oceanian and Central and South American markets, the level of market inventories started to show signs of improvement. On the other hand, personal consumption continued to be sluggish and retail sales of completed bicycles remained weak. In the Chinese market, while the popularity of cycling as a sport continued to be high, the shipping volume of completed bicycles to the market increased in the end of the season, and market inventories remained high. In the Japanese market, retail sales were sluggish as affected by the soaring price of completed bicycles, and market inventories remained somewhat high."

Shimano said it had received "a favourable reception" for its products, including 12-speed mechanical 105 R7100 groupset and GRX gravel groupset.

The slump in sales does not come as a surprise. In October, we reported that the company's sales were down 12 per cent through the first nine months of 2024, suggesting the brand enjoyed a stronger finish to the year considering the figure was five per cent for the full 12-month period.

Looking ahead, Shimano is optimistic things will pick up in 2025 and forecasts cycling sales rebounding to ¥360billion, that despite continued "downward pressure on the economy".