Japanese component giant Shimano has reported a 16% increase in sales in 2022, despite the global headwinds in the bike trade.
In its summary of financial results for 2022, published on 14th February, Shimano said the Covid cycling boom began to show signs of a slowdown, but that demand for bikes remained above pre-Covid levels.
On the stock issues facing the global bike trade, Shimano said inventories of high-end bikes remained low in Q4, while middle and low-end bike inventories rose.
Sales in the European bike market remained firm thanks to a strong interest in bikes following the Covid boom, but overstocking issues were evident, according to Shimano.
Despite the uncertain economic climate, fuelled in part by war in Ukraine, Shimano increased its bike segment net sales by 16.6% on the previous year, to 517 billion yen (around £3 billion), making 2022 a record-breaking year for the brand.
In the financial report, Shimano said: “Although the strong interest in bicycles during the Covid-19 pandemic showed signs of cooling down, demand for bicycles remained above the pre-Covid-19 levels. In terms of market inventories of completed bicycles, those of high-end class bicycles remained at a low level. Meanwhile, inventory levels of middleclass bicycles rose, following those of entry-class bicycles.
“Overseas, in the European market, sales of bicycles and bicycle-related products remained firm, partly backed by strong interest in bicycles. Despite shortages in inventories of completed bicycles, especially e-bikes and high-end class road bikes, market inventories remained somewhat high. In the North American market, although demand for bicycles was firm, market inventories remained higher than appropriate levels due to the supply adjustment of completed bicycles.”
In Asia and South American markets, consumer spending dropped due to high inflation and a tail off in cycling interest, according to Shimano, while in China market inventories remained low.
Shimano added: “Under these market conditions, order-taking was brisk for a wide range of products, including the new product Shimano 105 that is a high-end model for road bikes, and sport e-bike components, Shimano Steps series.”
Looking to the future, Shimano said there is concern that global supply chains will be further disrupted by the war in Ukraine, and that high inflation may continue to put pressure on the economy.
In Europe, there is concern that soaring resource and energy prices and supply constraints that may restrain economic activities, as well as prolonged high inflation that may slow down economic recovery, the brand said.
The report added: “In these circumstances, the company emphasises not only striving to develop and manufacture ‘captivating products’ that bring sensations to many people as a ‘development-oriented digital manufacturing company’ of Japan origin, while closely monitoring trends in demand for bicycles and fishing tackle, but also moving forward step by step as a ‘value creating company’ that continues to create a shared value between corporations and society.
“We will endeavour to further enhance management efficiency and strive for sustainable corporate growth by pursuing the creation of a new cycling and fishing culture.”