Japanese componentry giant Shimano has reported that its sales of bicycle components fell 17.7% in the first half of 2023, compared to the first half of 2022.
The company said sales from its bicycle division fell to ¥205bn (£1.1bn / $1.5bn) as it experienced “weak” and “sluggish” demand for its goods.
Its operating profit for the period also fell 39.5% to ¥42bn (£230m / $300m).
The dip comes despite the firm having recently launched its new version of it mid-range 105 road groupset. Shimano said that despite difficult market conditions it “received a favourable reception for high-end models for road bikes as a whole”.
It said in Europe demand for complete bikes was “somewhat low” and industry inventories “remained high”. Explaining the fall in demand it said it was “partly due to the impacts from unfavourable weather conditions in early spring”.
Addressing the North American market it said: “Retail sales of completed bicycles remained weak and market inventories were at a consistently high level.”
Looking to the rest of the world it said: “In the Asian, Oceanian and Central and South American markets, although interest in bicycles was firm, sales remained somewhat sluggish due to cooling consumer confidence on account of rising inflation.
“However, in the Chinese market, sales remained strong, especially for road bikes, owing to the continued popularity of outdoor sports cycling.”
Its home Japanese market was hit by depreciation of the yen, which caused the cost of bikes to rise.
In light of the market conditions the firm cut its overall revenue and profit forecasts. It also warned: “Production cutbacks at factories are making it difficult for us to absorb the rise in manufacturing cost ratio.”
The firm, which also makes fishing tackle, saw its share price take a knock on Wednesday falling 3% in early trading.
The results show that even a giant of the industry like Shimano is not immune to difficulty in a cycling market that is struggling to recover from the boom and bust of the pandemic.
Earlier this month UK company Fli Distribution became the latest business to shutter after the pandemic and the complications of Brexit proved too much for it to absorb.
Fli followed fellow distributors Moore Large and 2Pure, as well as online retailer Probikekit and clothing brands Presca and Miltag in folding during what has proved to be a brutal year for the British cycling industry.
