At a bicycle trade show in Stuttgart, steep discounts on brand new models hinted at the turmoil roiling the industry now that the pandemic-fueled cycling frenzy has faded.
Price cuts of 20 to 30 percent were not unheard of at this month’s event in the southwestern German city, where sellers tried to offload excess inventory in the face of falling demand.
Gone are the days when Covid shutdowns inspired a surge in bike sales in 2020-2022 as people sought more outdoor recreation or tried to avoid using public transport.
At Electrolyte, a company that makes custom electric bikes in southern Germany, orders have increased by 50 percent during the pandemic and customers have faced months of waiting due to disruptions in global supply chains.
But the mood today is very different.
“The war between Russia and Ukraine played a role, with high inflation making people think twice before spending their money,” said Oliver Arlt, sales director at Electrolyte.
Asian markets mostly up, Hong Kong boosted by Alibaba rally
Sales at the company fell 15% last year.
“The market is changing a lot at the moment,” said Burkhard Stork, president of the German bicycle industry association ZIV.
In Germany, Europe’s largest economy, sales of conventional bicycles fell by 20% in the first five months of 2023 compared to the same period last year, according to the ZIV.
E-bike sales fell 12%.
Stork expects 2024 to be a “difficult” year for the industry. Fewer new releases are also expected as manufacturers try to extend the life of unsold models.
Discounts, bankruptcies
Buoyed by the rapid growth of cycling during the pandemic and wanting to pre-empt any future supply chain grunts, many industry players increased their orders during the boom.
US home sales fall to lowest level since 1995
Declining demand inevitably led to excess inventory, leaving manufacturers and retailers with little choice but to resort to discounting.
Andreas Gutacker, who runs a bike shop and online sales site, said the site uses a repricing algorithm that scans competitors’ offers and “automatically lowers our price,” he said.
Price cuts of up to 20 percent for e-bikes and even 30 percent for conventional bikes were possible, he told AFP at the Stuttgart industry event.
Swiss e-bike maker Flyer, which also attended the show, has cut prices by 10 to 15 percent over the past six months.
The industry downturn has already taken its toll, including last year’s high-profile bankruptcy of popular Dutch e-bike maker VanMoof.
The young company, sometimes called the “Tesla of e-bikes,” has never been profitable, Stork said. “Then, when the crisis hit, the banks refused to continue,” he told AFP.
Germany’s Internetstores group, behind major online retailers such as Fahrrad.de and France’s top bike retailer Probikeshop, has filed for insolvency following parent company Signa Sports United’s financial woes.
Asian markets track Wall St higher after tech rally
German brand Ghost Bikes, owned by the Dutch Accell Group, meanwhile, announced late last year that it would close its Bavarian factory and relocate production to facilities in Turkey and Hungary.
However, industry experts expressed a note of optimism for the future.
“This is a transitional period and it will take about a year to clear the stocks,” said Manuel Marsilio of the Confederation of the European Bicycle Industry (CONEBI).
Sales “should increase very strongly in late 2024, early 2025,” he told AFP, noting that “the market is still bigger than in 2019, before the pandemic.”
Source: AFP