Shimano suffers huge fall in sales, down a quarter in first months of 2024 amid continued bike industry troubles

Shimano has reported another significant fall in sales figures, with net sales down 22.6 per cent in the first quarter of 2024 amid predictions its annual sales in Europe could contract by more than £170 million this year.

The Q1 figures for the Japanese bicycle components giant show a challenging start to 2024, with net sales falling by almost a quarter compared with the same period last year, sliding to JP¥76,090 million (£397 million), while operating income dropped by more than half (52.7 per cent) to £55 million.

Consequently, Shimano's outlook for the entire year expects sales to fall to JP¥325,000 million (£1.7 billion) from JP¥364,700 million (£1.9 billion), Bike Europe reports, with the European market likely to be hit hardest, sales expected to drop from JP¥186,600 million (£969 million) to JP¥153,000 million (£797 million), a decrease of more than £170 million.

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The communication around the figures remains consistent as Shimano repeated its message of previous financial reports by stating that "overall interest in bicycles remained high as a long-term trend".

Recognising the ongoing challenges in the cycling industry, the components manufacturer said: "On the other hand, supply and demand adjustments continued, and market inventories remained high globally."

It is not just cycling that has been hit, Shimano reporting that its other markets such as its fishing equipment sales, were also down, the company as a whole posting a decrease in net sales of 20.2 per cent compared with the same period in 2023, down to £524 million with an overall operating income of £70 million.

The German, Dutch and Belgian bike market was seen as strong, whereas other European countries are still said to be battling high inventories due to a cooling in customer confidence because of inflation and a challenging economic picture. Likewise, the North American market experienced a softening in demand coupled with high inventories.

A similar picture was painted for the Asian and Oceanian markets, as well as those of Central and South America, inflation and economic uncertainty blamed for impacting sales.

China is listed as the major exception to the global picture, a boom in interest resulting in more desirable inventory levels and higher sales.

Adding further concerning context, Shimano's low first quarter sales are in comparison to those of the same time period last year that were themselves down 17 per cent on 2022.

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A similar 17.7 per cent decrease in sales was, in July, reported for the first half of 2023. Come the autumn and the headline-grabbing crankset recall was in full swing, Shimano 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.

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The seemingly never-ending cycle of negative news rolled on, Shimano saying the cycling market remains "weak" as it again reported bicycle component sales dropped by a quarter during the opening nine months of 2023.

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.

The new year began with the news that Shimano's financial report for 2023 showed it had lost £93 million in sales from its crank inspection programme and total sales were down 30 per cent on previous year. However, it is worth pointing out that despite the financial blow, labelled in the accounts as "extraordinary losses", and further reduction in bicycle-related sales, Shimano still posted a £322 million profit in 2023.