Shimano sales fall by 21% in first half of 2024 – but components giant says key European market remains “firm” despite serious delivery problems

Weeks after admitting that it is experiencing ongoing distribution problems, including “serious logistical challenges” and a “lower service quality of deliveries” with longer lead times as a result, Shimano has reported yet another significant drop in sales figures for the first half of 2024, as the component giant’s net sales between January and June fell by 20.7 per cent compared to the same period in 2023, which itself was almost 18 per cent down on the previous year.

However, despite blaming high global inventory levels and unfavourable weather conditions for this latest drop in sales, Shimano noted that retail sales were “firm” in the key market of Germany, Belgium, and the Netherlands, and strong in China, where the popularity of road bikes is currently growing.

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According to the somewhat mixed report, Shimano’s net bike component sales between January and June 2024 decreased year-on-year by 20.7 per cent to 162,594 million yen (£843 million), and its operating incomes decreased by 42.2. per cent to 24,328 million yen (£126m).

Nevertheless, these figures appear to represent a slight easing of the problems continuing to plague the bike industry, after Shimano reported in April a drop of 22.6 per cent in sales for the first quarter of 2024. Meanwhile, second-quarter bike division sales were down 18.9 per cent on the same period in 2023, a slight deceleration owing to the company’s more upbeat forecast.

“While the strong interest in bicycles continued as a long-term trend, supply and demand adjustments of completed bicycles continued, and global market inventories generally remained high,” Shimano said in statement.

“Overseas, in the European market, retail sales were firm in our major market, namely Germany and the Benelux countries. On the other hand, in other countries, sales were weak on account of delayed recovery in demand for completed bicycles, and market inventories remained high.”

Focusing on Europe specifically, Shimano expects bike component sales to increase by 6.6 per cent from 66,000 million yen (£342m) to 80,000 million yen (£415m) in the first half of 2024 – a boost for the company after European sales dropped by 46 per cent in the same period last year.

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This positive news comes despite Shimano’s European warehousing and distribution operations suffering ongoing problems since it was outsourced to logistics giant Kuehne + Nagel last year.

Earlier this month, Shimano said it was experiencing “serious logistical challenges” and a “lower service quality of deliveries” with longer lead times as a result due to the issues, with delivery problems reported in its Benelux region (Belgium, the Netherlands and Luxembourg).

The company have also started to deliver from another warehouse in France in response to the problems, which have had a knock-on effect for Shimano IBDs (independent bike dealers) across Europe.

Shimano’s communications manager Kim Edwards pulled no punches when explaining the less-than-ideal start to their relationship with Kuehne + Nagel, suggesting that the logistics provider’s performance in Belgium “is only slowly improving”.

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Meanwhile, along with the mixed outlook in Europe, Shimano has noted that retail sales in North America have softened, with inventory levels remaining high, while sales of completed bikes were weak in Oceania and Central and South America. However, retail sales of completed bikes and inventories are currently strong in China, where road bikes continue to grow in popularity.

“Under these market conditions, demand for Shimano 105 and other components for road bikes was firm,” Shimano said in its report.

“In addition, the Shimano Group received a favourable reception for its products, including a gravel-specific component Shimano GRX.”

However, though the sales figures for the first half of 2024 exceeded its previous forecast, Shimano concluded that “the outlook will remain uncertain mainly due to market inventories remaining at a high level and delays expected in resolving the remaining market inventories partly due to unfavourable weather conditions during the spring selling season in the European market”.

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Shimano’s rather varied outlook for 2024 comes after several years of challenges for the components giant.

Along with its current logistical and delivery problems in Europe, last summer the company set its much-reported crankset recall in motion, recalling Hollowtech II models, including two generations of the popular Ultegra and Dura-Ace cranksets totalling 760,000 cranksets, and affecting over 2.8 million worldwide.

Shortly after, the company was allegedly hit by a massive ransomware attack threatening to release confidential data, before an investigation suggested that workers at its Malaysian supplier were subjected to “slavery-like” exploitation.