Shimano Is Predicting A 21% Sales Drop in 2023! 

I think a lot of this would be very alarming if this was all "pre-covid" but now these numbers, even if going down a good amount, are going down to more pre-covid levels. That should be expected overall. I find this all interesting but the problem is that the bike industry failed to foresee this, and that is their fault.

I'm waiting on Shimano to decide to quit pushing electronic shifting on everyone, and still provide cable for those of us that are not interested in the new digital age of shifting. Hell, I wish companies would make steel bikes again. Everything is aluminum and carbon. I truly miss the 80's and early 90's of cycling.

Two points 1. Sales going down 20% seems about right to return to pre COVID levels. That should be expected. 2. I wonder if shimano's sales are normally lower in the second half of the year. Bike manufacturers have already made their purchases for the year and distributors are likely the same. Retail sales may be up in the second half due to holiday purchasing, but the components have been purchased from Shimano months ahead of time.

Every industry that experienced a boom during covid, is now contracting to “normal” pre covid levels. As long as they didn’t do stupid things (like assuming that demand will stay high indefinitely) they should contract in 2023 and get back to growth in 2024. This will likely lead to sales and layoffs. But hopefully bounce back in 2024. Hopefully they will stay solvent.

prices have a long way to drop ...$30 for one Sram code break pad is ridiculous.

Things going back to normal

There sales are down as well because a lot of non department store bikes that are priced at 500 to 1200 dollars. Are now coming with boxone and microshift rear drivetrains.

Hey love your content I just need to show you a couple things I walking to the truck dealership today and walked out with a brand new trek Domane + lt for $1500 when I saw it I couldn't believe it didn't even want an E bike, but I had to buy

My local bike shop is predicting in March. They will have a 20% drop in all Cannondale bikes on top of the 10% drop they are doing for a 10 year anniversary as being a bike shop.

Meanwhile, my LBS is still sold out

This is great. But have you checked the pressure on that shock recently?

I’m just waiting til the end of season sales since people really won’t be in the market for a new bike this year. Already, I see many companies with deep discounts on their bikes. Also, inventory on The Pros Closet simply isn’t moving either - even their new builds.

whats a good throttle bike thats around $4k or under that are reliable preferably low price cuse i cant aford a lot t.t

After a massive increase due to COVID after steady growth and a contraction of 21% to create their 3rd best year ever - to sound an alarm is more click bait. The grew their market and they are doing very well past COVID, I would be excited as an investor.

I did listen the GMBN Podcast and they had a whole episode dedicated to the industry’s grim outlook.

I think the long term players are probably comfortable to settling to pre covid levels....that the recent boom was a blip. Other companies that have built their model on the high recent volumes are going to be screwed

FYI, the big 3 (along with a lot of smaller players) is heavily overstocked and slowing/canceling purchasing overseas. Theres been rumors of bike cancelations in the millions, many already assembled. It'll be interesting to see if things pick up again come spring. My assumption is that there is an over correction happening. Likely things will be down from the boom, but higher than pre-covid times.

Given the meteoric rise during Covid, I think this is normal. No one knew what would happen after Covid( it’s impossible to plan for a pandemic) . So I don’t blame bike industry for over producing . If you see a good price , get some of your fav stuff.

Thoughts if Shimano will follow SRAM lead on temporary removing MAP (min advertised price) to move inventory?

I'm just waiting for ebikes to come down another 25%. Ain't no way an electric motor costs $3K.

Do you see the big bike brands like Trek and Specialized discounting their higher tier bikes, like the Roscoe 9 or Fuse Expert? Trek and Specialized already extend their sales an extra month.

How is this alarming? They'll still be 100m yen up from their highest pre-COVID yearly revenue numbers. Sounds to me that production will be more stable and fewer crazy forward orders will be necessary.

oh good, I'll buy up some more XT chains since I rotate 6 hot waxed chains to keep my drivetrain clean and fresh.

Really aggravates me that manufacturer are pretending this isn’t happening. We’ve been seeing it for over a year in the Midwest.

Considering the reliability of the ep8 motor (and shortage to replace failed motors) ... and the serviceability of all their components, I am not surprised if everyone is running out and buy anything but Shimano parts. Why would I get a Shimano brake if I cannot buy a piston or a lever (no, I mean, the lever, not the whole lever assembly). Compare this to e.g. a Hope where you can replace the last bolt and screw and seal and mount and lever parts. Most brands I know and keep an eye on is spec'ing most of their bikes with Sram stuff now. Oh .. that XTR derailleur was the most unreliable POS I had... doesn't like wet, doesn't like dry, doesn't like dust, doesn't like riding :O ... Just my 2c .. ps: I loved my Saint and even XT stuff. If something came with it, I would leave it alone. But when it comes to drive trains I would go Sram in an eye-blink. They are sturdier, easier to maintain and more reliable. As for brakes, I hate Sram with a passion :) ... Hope is un-matched with parts availability and maintenance material. Also, honestly ... who is going to take a Shimano hub over a ... let's say DT swiss, Hope, Chris King, i9 .... Yes, yes ... I know.. there is Road and XC and maybe those guys. .. I just speak for myself and what my parts reliability and requirements are.....

YEAY DISCOUNT!!

It doesn't really matter if things are still higher or on par with pre-covid levels. The business changes, investment and moves that were made to get to these inflated figures and the cost/risk associated with them could result in huge issues. When investments are made based on a continued growth model any back pedaling kills confidence despite numbers still looking ok in the grand scheme of things.

1. It has been expected by virtually everyone that at some point, after the pandemic and the record growth over two pandemic years, there would be a market contraction. 2. The question has always been will that contraction return the market to pre-pandemic metrics or would the market retain some of those gains? If we look at the data from 2007 to 2020 (assuming the huge revenue increase from pandemic buying didn't show up in sales data until 2021), Shimano had an average sales increase of 6.36% per year. So starting with the sales in 2020, you'd expect sales in 2023 to hit 336.9¥ billion. Assuming that Shimano's prediction of a 21% drop in sales from 2022 to 2023 is correct, that would see sales drop to 408.7¥ billion, that's still 21.3% more than what the 6.36% growth model predicts for 2023. 3. Let's go another route. Instead of just averaging growth, let's use a linear best fit for the data from 2007-20 to predict sales in 2023. That linear best fit predicts sales in 2023 to be 352.2¥ billion. Again using Shimano's predicted 21% sales drop for 2023, 408.7¥ billion, Shimano would still see 16% more sales than the linear best fit predicts. Yes, my models are simple and Shimano's accountants/market people no doubt have more complex models. Still, it looks like their sales in 2023, as predicted by them, will still be better than what they might have predicted back in 2020. To say it a slightly different way, it looks like the industry--or at least Shimano--will continue to benefit from the huge influx of cyclists into the market over the course of the first couple of pandemic years. From my point of view, that's a win, a win that's likely shared by a lot of bike industry companies.

IMHO, the problem with bicycle mfrs is that they are marketing to pros/extremes, and nobody is making the bicycle equivalent of ADV motorcycles, which overwhelmingly dominate the motorcycle market. 99% of bicycle riders want to go anywhere, and they don't want to be limited by some over specialized bicycle. I don't want a beach, gravel, road, mountain, touring, or whatever other niche bike. I want a bike that does everything well, whatever I want to do, and nobody is making that kind of bike anymore. So, regardless of supply chains, I expect bicycle mfrs to take a dive until they wake up to the reality of the average non pro Joe that demands a do-it-all bike. A generalized bike, and not a specialized bike.

Still above the average sales pre covid. No alarm needed.

It seems to ME (not a fact but an opinion) like this whole recline concerning cycling is generally being polstered up a little, of course there are many employers who face problems especially those around and about retail but wouldnt it be a little crazy to assume that demand would stay at its peak after inflation + end of covid restrictions? A decline isn't always predictable yet it seems that scaling up a business is much easier than scaling down is.

This isn’t a big deal. Why does the stock market only look at today. If I went up 100% one year and down 20% the next I’m still doing great for those 2 years. Our whole market system is screwed at this point.

I wouldn't buy a new bike for less than 30% off. ....Maybe 25% off

Not sure if you saw what I sent you before. Another bike company did a two for one deal on entry level bikes. I think that's big. You?

Cues is here. Shimano wants cheap to make groupsets to put on cheap bikes quickly so the pandemic shortage or something like that comes again.

BRAIN!

Taking about people seeing you and mistaking you. I had a 1970 Chevrolet CST pickup that had a screaming 327 in it. I sold it to an idiot. Every place he went he was running wide ass open , cutting people off in traffic. I had , had it for a long time, so lots of people knew the truck. I was getting a call about every day from someone he had pissed off.

Hi josh 👋

Prices will still be no less than 5% over pre covid prices...

Yea as already mentioned if this was pre-covid yes would be a big issue but no if you look on sales compared to 2018/19 there isn’t a drop. People like you making these statements aren’t helping the bike industry.

Sales dropped? There are still many some of Shimano popular components are still out of stock hard to get inlocal bike shop not even online could get these popular components. Same for the complete group set that certain parts not available. If sales go down why manufacturing still cannot fullfil these stock? It seems the industry or for unknown reasons these popular components were not distributed creating high demand but low in supplies by monopoly kepting the high price demand.

Shimano pre covid (2019) did 2.1 billion USD in business. Their best year ever was 2022 at 3.7 billion USD. a 21% drop would equal to 2.2 billion USD marking growth from 2019 (which is how most bike companies are basing this years performance off of as the boom of the pandemic was temporary) and would still be their third best year on record. Please stop making it sound like the bike industry as a whole is falling apart and it's all doom and gloom. Most companies in the industry were careful and expected this to happen while others were not (looking at you Wahoo and Saris). We are basically will be going back to the norm and most bike business are still forecasted to see about a 4% growth over their 2019 numbers.

Ray Charles could see this coming, it’s simply going back to pre-Covid prices so it’s not a huge deal in my opinion. If you follow economics this is completely normal.

Good! Lower the price!

My New Years resolution was to not buy any bike stuff in 2023. So somebody in Shimano must be spying.

The MTB economist!

Ebay sram chains below $100 ,used bikes by the thousands and people have probably had enough

From what I see in general people are riding less than what they were doing . Less means less wear and tear on components . Many don't have the disposable income to spend thousands on a bike and parts . I think for Shimano it's more about the businesses that buy their product to sell to customers like bike retailers and bike manufacturers . Those orders are placed before riding season and that's how they are determine sales This lower inventory will not allow a big decline in prices and that's the goal for retailers to figure how much produce to order and not get caught holding the bag .

Its the American Andrew Dodd

How many bike industry Armageddon videos can one guy make? Take your own advice and go ride. You'll be reminded of how amazing modern bikes and trail systems are, how many new riders are out there enjoying trails and that all this BS you're reporting on is a hiccup after the 3 most insane years most industries have ever seen.

Here's some fantastic marketing-speak from the BRAIN article: "It concluded, “In these circumstances, the Company emphasizes 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 endeavor to further enhance management efficiency and strive for sustainable corporate growth by pursuing the creation of new cycling and fishing culture.”" What a bunch of hooey! (And next time, have an ACTUAL native English speaker copy edit your final draft. Embarrassing.) You make bike parts.

Good

Any idea why there seem to be tons of sales on MTBs, but almost none on road bikes?

Sales down, bet they raise their prices! 😄

Awesome you are doing this series. There some big MTB RU-vidrs saying buy up the deals now, because they won’t last. That’s some serious denial.

Hey maybe you should just go ride your bike 🤷🏻‍♂️

You know why? Because they keep increasing the price of parts!!

I emailed you the proof

Honestly a lot of the people that I've talked to are pretty angry and bitter at the crazy price gouging that went on during the BS pandemic. I won't lie I was a tad upset at my favorite bike brand for taking it to an extreme. Yeah yeah I know supply and demand. But many other great brands didn't do this. I'm not here to mention names and i am very sure everyone reading this know who did what and who didn't. Not saying Shimano did this. That's for you guys to decide who did it. We all saw what went on. Many of these brands have very loyal customers and they chose to crap all over us.

certainly wouldn’t buy another shimano powered e bike, you cant repair the motor once thee e010 error code shows up, they need to concentrate on building a motor that’s fixable and reliable

hmmm...30% is nicer

last I check, Shimano still has a shortage on some parts vs others.

No wonder this man stopped making more videos in the subject 2 months ago. Reality contradicts today everything that he predicted.

Marin was selling $500 bikes buy one get one free if that doesn't scream too much stock I don't know what does

Maybe because SRAM is stealing all the sales? They have been slow to the game for the last half decade and numbers show. SRAM's second generation wireless groupo is almost out and they still don't have a competing product. Not to mention GX, NX, SX is the dominating drivetrain on new bikes.

Dude enough of these videos. We know it's slow, but talking about it won't help.

Just like everything else bad happening - it's known as the Biden effect - but at least no more meany tweets