Demand for high-end bikes remains strong, according to manufacturer Giant, which announced a 12.5 percent increase in revenue in 2022.
However, according to a report by Bicycle Retailer, there is also excess inventory of low and mid-priced components – a sector that is said to have cooled significantly – while high-end components remain harder to come by.
“Currently, the balance of supply and demand in the bicycle market has not yet normalized. Demand for mid- and low-end products has cooled, but demand for high-end and e-bikes remains strong,” Giant said.
Demand for cheaper mid-range bikes has soared during the covid lockdown, with people taking advantage of quieter roads as a new pastime. For consumers and retailers, bikes at these price points are nearly impossible to come by. As the industry scrambles to deal with the sudden surge in demand that has started to wane as the pandemic eases, manufacturers and retailers are in many cases facing what the giants describe as excess inventory.
It has employed what it calls a “corrective mechanism” to reduce excess inventory, but has yet to make significant progress. Giant said the short-term financial performance will be affected by the surplus and the economic outlook, adding: “In the medium to long term, however, demand for e-bikes remains solid and bikes remain popular, which will continue to support demand for high-end bikes. ”
The industry situation has led observers to predict that 2023 could be the year of the cheap bike, with prices dropping even on current models. Manufacturer Specialized has even been candid about its brand’s situation with its “We made too many” promotion, which saw massive price cuts on a wide range of bikes.
“Because you’ve [already] bought a lot of stock, you’re going to find out that there’s going to be a lot of discounts later, probably in March, April, May,” said Henry Silvester of Sylvester Brothers Bicycles Henry Silvester told us.
Despite a sharp rise in revenue, Giant’s net income was flat compared to 2021 due to higher material and labor costs, while falling 1.5% in real terms after tax, BR reported.