Supply chain delays hit global bicycle production

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Due to delays in parts delivery, some of the world’s largest bicycle manufacturers are considering restructuring their supply chains, which several manufacturers say is the longest in decades.

The global bicycle shortage that dates back to last year has been exacerbated by supply problems that have highlighted reliance on parts and components, with Japan’s Shimano controlling an estimated 65% of the high-end gear and brake market.

“This prompted us to look around more and step out of our comfort zone to explore different suppliers,” said Eric Bjorling, brand director of Trek, one of the world’s largest bicycle manufacturers.

European and American manufacturers say that the lead time from order to delivery for a series of high-end components manufactured by Shimano has reached 400 days, which highlights the industry’s efforts to meet the pressure of the surge in bicycle demand caused by the pandemic.

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

The supply chain tightening has also hit other leading bicycle manufacturers, such as Taiwan Giant and Merida.

Osaka-based Shimano produces fishing parts and boating equipment, as well as bicycle parts, but has been struggling to meet demand due to the pandemic prompting millions of people around the world to start riding bicycles.

Even if the Shimano plant is operating at full capacity, the shortage is expected to continue.

For smaller bicycle manufacturers, the problem is even more serious, and the extremely long delivery time also adds challenges to any new market entrants.

Trek says it’s time to leave our comfort zone © Sandy Huffaker/Bloomberg

The launch of LeMond, a startup founded by three-time Tour de France champion Greg LeMond, was delayed by four months due to supply delays, including Shimano’s cut of 80% of deliveries in the first half of this year.

“We were told in the summer that it was December and then January. In March, we had everything except these two components. Unfortunately, if I didn’t have all of these, then I couldn’t make a bicycle,” the chief Executive Officer Dean Hendrickson (Dean Hendrickson) said. “This leads to cash flow problems for start-ups.”

Antonio Dus, chief executive of Italian high-end bicycle manufacturer Cicli Pinarello, said that a big question for companies like him is whether demand will continue in the long term.

Some component manufacturers worry that once the depleted warehouse becomes full again, the reduction in orders may cause problems.

Davide Campagnolo’s eponymous company has increased European production capacity to meet Shimano’s difficult-to-deliver gear set demand. He warned: “This huge demand will not last forever.”

He predicts that this situation will decline in the summer of 2023 as indoor sports make a full comeback and the market absorbs a large number of bicycles.

According to Morten Paulsen, an analyst in charge of Japan’s industry at CLSA in Tokyo, for Shimano, despite increasing revenue from bicycle parts, pressure is evident.

The company postponed the launch of several products to celebrate this year’s 100th birthday. Paulson said this may be because engineers had to turn to the challenge of increasing production capacity.

Dus of Cicli Pinarello warned that Shimano needs to improve its competitiveness, although he believes that the company’s leadership in the supply chain is safe because of 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 more streamlined way, to understand trends in advance to plan the required adjustments,” he said.

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