Shimano, the Japanese manufacturer of cycling components and other equipment, reported net sales of bike parts jumped 16.6% from the previous year to 517 billion yen (US$3.83 billion).
However, the company also expressed concern for the future, and said estimated 2023 net sales will decrease by 20.5%.
“There is concern that global supply chains will be disrupted by supply constraints and heightened political tension caused by geopolitical risks that have emerged, such as the prolonged situation in Ukraine, and that high inflation dragging on and tight monetary policies adopted globally may put downward pressure on economy,” the company stated in its earnings report.
The company mainly operates in Europe, China, Japan and the U.S.
High inflation and interest rate increases are two factors in the U.S. that Shimano identified as causing the projected downturn in net sales.
Sales of bike components are expected to reach 200 billion yen (US$1.48 billion) in 2023 across all markets in the first half of 2023, and 196 billion yen (US$1.45 billion) in the second half, a total of 386.6 billion yen (US$2.86 billion) for the year, compared to 517 billion yen (US$3.83 billion) for 2022.
Regarding sales in 2022, the company said the strong interest in bicycles during the COVID-19 pandemic showed signs of cooling down, but demand remained above pre-pandemic levels across Shimano’s international markets.
In terms of market inventory, the supply of high-end bicycles remained tight. Meanwhile, inventory levels of mid-priced and starter bicycles rose.
In the North American market, although demand for bicycles was steady, inventory levels remained elevated due to the increased supply of assembled bicycles, the company said.