After the special boom in the pandemic, rougher times have returned to the bicycle industry. Around the Eurobike trade fair, the manufacturers are relying on an old beacon of hope.
Full warehouses instead of an almost endless rush of customers, discounts instead of price increases: After the Corona boom, the bicycle industry is back on earth. When dealers and manufacturers meet at the Eurobike trade fair (June 21 to 25) in Frankfurt, many have a nice cash cushion behind them, but the situation is mixed. Advantage for customers: The time to buy a bike is cheaper than it has been for a long time.
“The Corona boom, in which people buy what they can get, is over,” says Burkhard Stork, Managing Director of the Zweirad-Industrie-Verband (ZIV). High inflation is also weighing on consumers. The segment of simple classic bikes up to around 700 euros is having a hard time, says Stork. “The warehouses are full, and the first manufacturers are feeling this in terms of sales and orders.”
Even during the pandemic, the bicycle industry had experienced golden times. At that time, they could hardly save themselves from customers who had discovered the solo sport of cycling and avoided buses or trains. But production couldn’t keep up – many customers had to wait a long time due to delivery problems. Some only got their model when the summer cycling season was almost over – at significantly higher prices. In the Corona year 2020, the industry achieved a sales record, according to the Federal Statistical Office, sales jumped by around a third.
Warehouse filled far beyond demand
So dealers ordered more goods. According to the ZIV, production rose to a peak of 2.6 million wheels in 2022. But from the fall, the market turned. Manufacturers were suddenly supplying large quantities of wheels. “Some deliveries for 2022 and 2023 came at the same time,” says Stork. The result is inventories and pre-orders at retailers well in excess of this year’s needs. With discounts, the wheels should now be out of stock. Bad luck for the industry: The wet spring meant that business got off to a sluggish start.
“A 10 to 15 percent discount is possible,” said ZIV Managing Director Stork. Production costs have skyrocketed during the pandemic. Now they are normalizing, supply chain problems have leveled off at “95 percent”. But bikes are not sold at a sale, he says.
The latest figures from the comparison portal Idealo for the “Spiegel” show significant discounts. According to this, the average prices for mountain bikes in online retail fell by 16 percent in May compared to the same month last year. Road bikes became cheaper by 7 percent, while e-bikes bucked the trend by 15 percent more expensive. While the rebates help retailers with sales, they weigh on margins. Not all industry companies come through the new times well. The mail order company Bike24, for example, was recently in the red.
“Ruiny” discounts
“We are facing a strong consolidation and professionalization in the bicycle market,” believes Robert Peschke, Managing Director of Little John Bikes based in Dresden. In order to get money, many dealers would “panically” lower their prices, he recently told the “Wirtschaftswoche”. “Even for current bike models, there are some ruinous 20 percent discounts and more,” says Peschke. “In the end, this price war will cost many bicycle dealers their existence.”
Alexander Giebler from the press service bicycle in Göttingen believes that some dealers are having problems because their capital base is melting. But he does not expect a mass extinction. “Anyone who has done their homework will get through the crisis well.”
Once again, the industry’s hopes rest on e-bikes, which are likely to overtake traditional bikes in terms of sales figures for the first time this year, as the ZIV estimates. A sales record of 2.2 million e-bikes was already achieved in 2022, while sales of conventional bikes fell by 300,000 to 2.4 million. The bicycle industry has long since adapted to the production of lucrative e-bikes. Thanks to the high proportion of e-bikes, sales in the industry have almost quadrupled within ten years to 7.4 billion euros.
The e-bike trend continues
“The boom in high-quality e-bikes continues, we don’t see any market saturation,” says Stork. The trend towards e-bikes goes “across all categories”. Sporty bikes such as gravel and mountain bikes with motors are in demand, as are cargo bikes anyway. In the case of mountain bikes, for example, 90 percent of the bikes sold are already electrified. The trend towards technically high-quality and therefore more expensive bikes is being driven by service bikes. “With the monthly payments, you hardly notice whether a bike costs 3,000 or 4,000 euros,” says Stork.
He does not see the danger of an imminent industry crisis with job cuts. Although some manufacturers currently have more staff than necessary, they want to keep it because of the shortage of skilled workers. “We can see that retail sales are picking up again and we assume that the situation will soon improve for producers as well.”
The ZIV would like more support from politicians: “For 75 years we have made politics for the car, now we have to at least put cycling on an equal footing.” It is important to try things that have long been standard in countries like the Netherlands, such as large parking garages for bicycles and a network of wide, well-developed cycle paths: “We need the courage to rethink cities.”
Source: Stern
