In a Q4 report published this week, Shimano has reported a second concurrent record year of sales in its bicycle-product division for Financial Year 22 (FY22), totalling 517.4 billion yen (£3.2b / $3.8b).
However, although this number marks a 16.6% year-on-year growth, this is a significant slowing compared to FY21, which grew 44.6% over the prior year FY20. The report also predicts the downturn will continue, forecasting a significant decrease in 2023.
“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,” Shimano reassured the market in its summary of the report.
According to the report, Shimano saw its combined operating income - including both its bicycle and fishing tackle businesses - grow from 148.3 billion yen (£920m / $1.1b) to 169.2 billion yen (£1.05b / $1.25b), a rise of 14.1%. Despite this, the forecasted figure for FY23 shows the same figure being at 105 billion yen (£652m / $778m), a 37.9% decrease year over year.
Focusing on its FY22 performance, Shimano states that in Europe, "consumer sentiment was sluggish against a backdrop of concerns about resource and energy supply, rising prices, the prolonged high inflation and other factors, which increased fears of an economic slowdown." Despite this, it says "sales of bicycles and bicycle-related products remained firm, partly backed by strong interest in bicycles. Despite shortages in inventories of completed bicycles, especially ebikes and high-end class road bikes, market inventories remained somewhat high."
In North America, the brand says that "while rises in policy rates to tame high inflation put downward pressure on economy, personal consumption remained firm backed by a solid employment environment," and that "although demand for bicycles was firm, market inventories remained higher than appropriate levels due to the supply adjustment of completed bicycles."
A similar picture is painted elsewhere too, with Shimano saying that interest in bicycles in Asia, and South and Central American markets waned due to high inflation, although it is seeing signs of growing interest in road cycling.
In the brand's home nation of Japan, Shimano says the market remains strong, but that inventories of completed bicycles within the market remained at an elevated level.
Shimano also called out the strong performance of a couple of items, mentioning the 'brisk' order-taking of the new 105 Di2 groupset and the STEPS e-bike drive unit.
Shimano's report might, on the face of it, appear positive with two concurrent record years, but considering the forecasted downturn, it paints a similar picture to the struggles being felt by the rest of the industry over the past 12 months. There have been numerous rounds of staff layoffs from market-leading brands, with Zwift forced to lay off 150 staff in spring of 2022, Wahoo followed suit, before cutting more - reportedly 15% of its workforce - later in the year.
Strava cut numbers at the same time, while Pearl Izumi closed an office and removed staff after it was bought out by United Sports Brands. Elsewhere, Rad Power Bikes saw its third round of layoffs, and publishing house Outside Online cut senior staff from news websites CyclingTips and Velonews for the second time in a year.
