World News Briefs – September 2024
Mixed Financial Results for Global Bike Companies
Everyone in the Australian bicycle industry knows that times have been tough for over two years now since the end of the covid boom. But exactly how tough has it been on a global scale?
We don’t often report upon the financial results of global bicycle companies, but thought it would be interesting to post this summary which mainly compares results from 2022 to 2023. Being based in different countries, these companies’ start and finish on different dates, so they’re not directly comparable.
As you can read below, only one of the seven companies highlighted in this article has seen an increase in sales. And that’s the smallest one, niche high end road brand Colnago.
But of the six that fell, several only fell by single digits, compared to the hardest hit, Chinese e-bike drive system manufacturer Bafang that dropped 42% in sales and 75% in net profit.
The information below was summarised from a longer series of articles first published in Bike Europe.
Pon
Pon.Bike is a division of Pon Holdings, a diversified multinational company. If you’d like some more insights into the company, the CEO of Pon Holdings, Janus Smalbraak is a cycling enthusiast who has attended the Tour Down Under where we were given the opportunity to record this exclusive interview last year.
Pon.Bike saw a 5% drop in sales from 2022 to 2023. Pon’s bike brands include Cannondale, GT, Mongoose, Cervélo, Santa Cruz, Focus, Kalkhoff and others. Their P&A brands include Reserve and BBB. Their total bike division sales for 2023 were €2.3 billion (A$3.7 billion) down by €100 million (A$161 million) from 2022.
Pon has been investing heavily in creating new factories in Germany, Lithuania, the Netherlands, USA and Brazil.
“The major bicycle markets in Europe and the United States remain long term growth markets, especially as governments and companies increasingly promote cycling for its climate, mobility and health benefits,” explained CEO Janus Smalbraak.
Giant
Giant’s sales revenue was down by 20.2% to TWD 16.06 billion (A$774 million) for the first quarter of 2024 compared to the corresponding quarter in 2023.
Despite the drop, Giant was still profitable for the quarter at TWD 520 million (A$23.9 million) net profit after tax, but this was down by 37.8% from the corresponding quarter in 2023.
Giant said that demand from China was up, but not by enough to offset weak markets in Europe and North America.
Shimano
Shimano’s sales were also down in the first quarter of 2024 to JPY 76,090 million (A$771 million), a year on year fall of 22.6%.
Net profit for the quarter was down by 52.7% to JPY 10,471 million (A$106 million). Shimano noted the road bike boom in China, that we previously reported here, as one bright spot.
Shimano anticipates full financial year sales to be JPY 325,000 million (A$3.3 billion) which would be a 10.8% drop from the JPY 364,700 million (A3.7 billion) achieved in 2023.
Orbea
Spanish bicycle manufacturer Orbea employs 80% of its global workforce in the Basque region of Spain. The company, that dates back over a century now has over 1,000 staff, a total which had doubled in the three years to 2022.
Sales in 2023 were down slightly compared to 2022 at €374.4 million (A$602 million) in 2023 compared to €400 million (A$644 million) the previous year, a drop of 6.5%.
Fox Factory
The USA-based manufacturer of Fox bicycle suspension forks and shocks is part of a larger group that also makes suspension for a wide range of other vehicles.
Their Specialty Sports Group (SSG) houses their various bike brands in Fox Suspension, Easton Cycling, Marzocchi, Race Face, Lizzard Skins and others. SSG sales for the first quarter of 2024 were US$113.51 million (A$167 million) a drop of 4.5% compared to Q1 2023.
Fox’s main competitor, RockShox, is part of the SRAM group which as a private company, is not required to publish financial statements.
Bafang
The number three e-bike drive system manufacturer after Bosch and Shimano did very poorly in 2023.
Sales were down 42% from RMB 2.8 billion (A$583 million) to RMB 1.6 billion (A$333 million). Net profit dropped by over 75% from RMB 512 million (A$107 million) to RMB 128 million (A$26.7 million).
Bafang blamed overstocks of bicycles for the slump. In 2023 they manufactured 767,243 hub motors, 247,830 mid drive motors and 3,055,962 integrated wheel motors. 66% of Bafang’s 2023 sales revenue came from its home country of China where the e-bike market is approximately 50 million units per year – about 200 times larger than Australia’s market, when measured by volume.
Colnago
This heritage Italian brand was bought by Abu Dhabi based Chimera Investments in 2020. This is why Colnago is the bicycle of the powerful, big budget UAE Team Emirates professional road racing team of Tadej Pogacar.
Sales increased by 33% to €55.7 million (A$89.7 million) in 2023. Gross profit increased by 103% to €14 million (A$22.5 million).
Colnago also cited the Chinese high end road bike boom as one of their growth drivers, but said that each of their other markets was also growing as they stayed focused on high end road bikes.