Global bicycle production is affected by supply chain delays

Some of the world’s largest bicycle manufacturers are considering a shake-up of their supply chains due to delays in parts delivery, described by several manufacturers as the longest in recent decades.

The global shortage of bicycles, which dates back to last year, has been exacerbated by supply problems that have highlighted the dependence on the components of a group, the Japanese Shimano, which controls 65% of the market. of high-end gears and brakes.

“It has pushed us to look a little more around us and step out of our comfort zone to explore different vendors,” said Eric Bjorling, Trek brand director for the United States, one of the world’s largest bicycle manufacturers.

European and American producers said delivery times from order to delivery have reached 400 days for a range of high-end components manufactured by Shimano, highlighting tensions for an industry trying to meet a increased demand for bicycles caused by the pandemic.

Some suppliers reported even longer delivery times for certain parts, such as hydraulic brakes or wheels.

Supply chain pressure has also affected other leading bicycle manufacturers, such as Taiwan Giant and Merida.

Osaka-based Shimano, which produces fishing components and rowing equipment, as well as bicycle parts, has struggled to keep up with the pandemic that is pushing millions of people around the world to engage in cycling. .

Scarcity is expected to persist, even with Shimano plants operating at full capacity.

The problems are more acute for smaller bike manufacturers, while extremely long delivery times add to the challenges for any new entrant to the market.

The launch of start-up LeMond, founded by Tour de France winner triplet Greg LeMond, was delayed four months due to delays in supply, including cutting Shimano deliveries by 80% in the first half of the year. year.

“We were told during the summer that it would be December and then January. In March, we have everything but these two components. Unfortunately, if I don’t have them all, I can’t build a bike, “said Dean Hendrickson, chief executive. “This caused a cash flow problem as a startup.”

Antonio Dus, CEO of Cicli Pinarello, an Italian manufacturer specializing in high-end bicycles, said the big question for companies like his was whether demand would continue in the long run.

Some component manufacturers worry that a drop in orders once stocks run out of stock again could cause problems.

Davide Campagnolo, whose eponymous company has increased production capacity in Europe to meet the needs of gear assemblies that Shimano is struggling to supply, warned: “This high demand cannot last forever.”

It predicts that it will stop working in the summer of 2023, as covered sports return completely and the market absorbs the huge volume of bicycles.

For Shimano, despite the increase in revenue from bicycle components, the strains are clearly on display, said Morten Paulsen, an analyst who covered Japanese industrialists at CLSA in Tokyo.

The company delayed the launch of several products to commemorate this year’s centenary. Paulsen said this probably occurred because engineers had to be diverted to the challenge of increasing capacity.

Dus de Cicli Pinarello warned that Shimano needs to increase its game, although he believes the company’s leadership in the supply chain is secure due to the quality of its parts and the high barriers to entry.

“The key to the future is for Shimano to connect with brands in a faster and smoother way, to be aware of what the trends are in advance to plan the necessary adjustments,” he said.