This is reflected in its financial results for the first half of 2023. The Japanese manufacturer reports a 17,7% drop in net sales of bicycle components to 204.986 million yen (1,3 billion euros) year on year and the operating profit decreased by 39,5% to 42.093 million yen (270 million euros).
Source: https://www.bike-eu.com/45810/shimano-sees-big-opportunities-to-enhance-market-potential
Shimano attributes the sales slowdown primarily to the prolonged turmoil in Ukraine, interest rate hikes by various countries' central banks to tame inflation, financial uncertainty in the US and other factors exerting downward pressure on the global economy. In Europe, consumer confidence has only started to rise to a low level, Shimano reports.
Golden opportunities
“Many consumers started cycling during the pandemic for various reasons,” Marc van Rooij told Eurobike. “People felt that the e-bike was a good alternative for mobility over shorter distances. Considering all the environmental decisions to come, the CO2-reducing, carbon-free society we should have in Europe by 2050 means that we will have great opportunities to improve our market potential in the years to come”.
“Over the next 5-10 years, more and more cities will be closed to car traffic and this will provide us with golden opportunities to develop our business more sustainably than we already do.”
Perspective 2023
For the short term Shimano is less positive. “While market inventories remain at a high level, retail sales got off to a slow start due to unfavorable weather conditions in the European market in the early spring. This should cause a delay in the recovery of demand for our products in the second half of the year. Furthermore, the production cuts in the factories make it difficult for us to absorb the increase in the ratio between the production costs”.
Also for the North American market, Shimano reports weak retail sales of completed bicycles and market inventories remain at a consistently high level. Meanwhile Shimano is also dealing with the depreciation of Asian currencies caused by the continued appreciation of the US dollar.
