Global bicycle production hit by supply chain delays

Some of the world’s biggest bicycle makers are considering a shake-up of their supply chains because of delays to deliveries of parts, described by several manufacturers as the longest in decades.

The global bicycle shortage, dating back to last year, has been exacerbated by supply problems that have highlighted reliance on one group for components, Japan’s Shimano, which controls an estimated 65 per cent of the market for high-end gears and brakes.

“It has pushed us to look around a little bit more and get out of our comfort zone to explore different suppliers,” said Eric Bjorling, brand director at Trek of the US, one of the world’s largest bicycle manufacturers.

European and US producers said lead times from order to delivery have hit 400 days for a range of high-end components made by Shimano, underlining the strains for an industry trying to meet a surge in demand for bicycles caused by the pandemic. 

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

The supply chain squeeze has also hit other leading bicycle makers such as Taiwan’s Giant and Merida.

Osaka-based Shimano, which produces fishing components and rowing equipment as well as bicycle parts, has struggled to keep up with demand with the pandemic pushing millions around the world to take up cycling.

Shortages are expected to persist, even with Shimano plants operating at full capacity.

The problems are more acute for smaller bicycle manufacturers, while the extremely long lead times have added to the challenges for any new market entrants.

The launch of start-up LeMond, founded by the three-time Tour de France winner Greg LeMond, was delayed by four months because of supply delays, including Shimano cutting deliveries by 80 per cent in the first half of the year.

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

Antonio Dus, chief executive of Cicli Pinarello, an Italian maker specialising in high-end bicycles, said the big question for companies like his was whether demand would continue in the long term.

Some component makers worry that a dip in orders once depleted warehouses are again full of stock could cause problems.

Davide Campagnolo, whose namesake company has ramped up production capacity in Europe to meet the needs for gear sets that Shimano is struggling to deliver, warned: “This big demand cannot last for ever.”

He forecasts it will drop off in the summer of 2023 as indoor sports make a full comeback and the market soaks up the huge volume of bikes.

For Shimano, despite rising income from bicycle components, strains are clearly showing, said Morten Paulsen, an analyst covering Japanese industrials at CLSA in Tokyo.

The company delayed the launch of several products to mark its 100th birthday this year. Paulsen said this probably occurred because engineers had to be diverted to the challenge of raising capacity.

Dus at Cicli Pinarello warned that Shimano needs to raise its game, although he thinks the company’s leadership in the supply chain is secure because of the quality of its parts and the high barriers to entry.

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