A lengthy article recently published in the USA trade magazine Bicycle Retailer and Industry News (BRAIN) is a sobering reality check for bicycle dealers around the world.
Factories across China and Taiwan are not suffering from shut-downs due to Covid-19. They’re open and running at full capacity. But the problem is that even maximum factory production, capacity cannot keep up with demand.
Bicycle retailers and wholesalers across the developed world have virtually all sold out of every popular price point and model. That means that no-one has any backup stocks and every new bike that lands is going straight through the supply chain to consumers.
Several suppliers told BRAIN that the bottleneck is not frame making or bike assembly which is commonly done in Taiwan, China, Cambodia or Vietnam. Instead it’s the availability of key components including Shimano parts made in Singapore and Malaysia.
Factories in both countries shut down in late spring (April – May) but returned to full capacity in June and July, according to government statistics.
Bike brands looking to place new component orders have been told not to expect delivery until as late as the second quarter of 2021 for some parts.
Even if factories were to invest millions to expand their capacity, it could take a year to build and commission new factories, machinery and production lines.
Meanwhile, in Australia, importers of several bike brands that have reported that even 2022 model year production scheduled for May 2021 is being pushed back to July by some manufacturers due to lack of parts availability.
Part of this story was first published in Bicycle Retailer and Industry News (USA).