Five Predictions for Industry Direction in 2022

Little Rock, USA

US bike industry commentator Rick Vosper has published his predictions for a number of possible developments in the American bike industry for 2022.

At least some of his projections in ‘Five things that might happen in 2022. Or Not’, published online this week in Bicycle Retailer and Industry News, could just as easily occur in Australia. So, in the interest of generating some healthy discussion, we thought we’d share his thoughts.

His list is topped by a decidedly sombre projection – a channel-wide oversupply that, at its worst, could be disastrous. After sky-high sales levels over the past two years in the US and much of the world, industry members are pondering when the likely fall will come.

The bike industry is accustomed to dealing with peaks and troughs in demand. However, Vosper is predicting a sudden drop in 2022 could be particularly disastrous because of the considerable time-frames for product bookings and the high levels of stock held by many companies to buffer themselves against ongoing supply disruptions.

Vosper, a former marketing director with Specialized and Cervélo Cycles, even goes so far as to give a figure on the likelihood of each scenario actually happening. Glass-half-full types might be comforted by his estimation that a widespread oversupply has a 50% likelihood of occurring.

Vosper thinks the most likely development is an escalation of manufacturer-owned stores. He gives that an 85% chance of becoming reality.

Why so confident? It’s a predication driven largely by expectations Trek will continue buying key dealers in major markets. His uncertainty is not knowing how this trend will play out as Specialized and Pon join in the fun.

Vosper is tipping an “all-out bidding war for the best available dealers in the hottest markets”.

Another of his 50-50 propositions is – probably not surprisingly given his oversupply estimation – the possibility that demand does not plummet and, conversely, the current demand “blip” transforms into an all-out bike boom.

He quotes National Bicycle Dealers Association statistics that half of the US’s cyclists in 2021 either entered the sport in the past two years or returned to it after a lay-off.

That injection of newcomers and recreational riders hints towards a surge in demand for lower- to mid-priced models. Under this scenario, the biggest rewards in sales will go to savvy companies who gear production to capture new and returning riders.

Scenario number four is a shortage of e-bikes.

Guided by experiences in Europe and Asia, Vosper suspects US demand for e-bikes could suddenly skyrocket after years of steady growth, far outstripping the supply chain’s ability to meet demand.

Vosper’s predicted likelihood of it happening … just 35%.

His final prediction is a mixture of dread and optimism.

The dread … the potential for growing demand to exacerbate an existing labour shortage in the US bike industry.

The silver lining … ongoing high demand could enable an increase in retail prices, supporting improved employee wages and boosting staff retention.

The full version of his article can be found on Bicycle Retailer and Industry News.