Bike sales now and in the future?

[steve_sordy]

We all know that bike sales took off this year as people on lockdown and/or furlough decided to take advantage of the time off and buy a bike. This drove the prices of used bikes up as people who were thwarted from a new bike lowered their sights.

On another site, someone posted a clip from a magazine interview with Trek at the start of the Covid-19 problem. Their top guys had all got in a room and forecast the best and worst cases for their company. The best case was 50% fewer sales in 2020. Unfortunately, the clip posted did not go onto reveal what Trek actually did as a result. Did they reduce orders at the factories, reduce stock? What? Did the other bike makers do the same? Is this why everywhere is sold out? Yes, I know more bikes were sold overall. But normally there is a load of odd sizes left over and brands that don't normally sell well. But they all sold. So what is happening now? Are the same guys meeting to say it won't last, or are they cranking up production to ride the crest of the wave? In a year's time will there be a glut of bikes and with used values on the floor. Or will it still be like now, madness with long lead times and for example, the entire stock of DeVinci emtbs for 2021 already sold (according to a post on here). The bike manufacturers cannot afford to get this wrong.

Edit: 2012 corrected to 2021

 

[Slowroller]

You can always poke around in industry news if you find it interesting.

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[The Hodge]

Steve ..If DeVinci have only sold their 2012 stock now they must have been having a terrible time of it...?

 

[Mikerb]

None of the brands can determine their production volume without first knowing how their supply chain will cope with the pandemic. Rockshox and Shimano may have a bigger bearing on assembly volumes than anything else. That in turn may help the smaller brands who would have smaller contractual demands on those component suppliers............and it does seem that there is growth in the number of bike brands.
I think a bike brand doing a market analysis will see quite a complex market with Covid providing both opportunity and risk. The fact that the only real differentiators for mtbs now are price, availability and service ( geo is fairly established and everyone selects from the same 3rd party components) the smarter brands will focus on those 3. Brands with large marketing and promotion departments and sponsored riders etc are unlikely to be able to differentiate with price but may be able to leverage better supply chain deals to help resolve the availability issues. I think it is time however one brand came up with an innovative sales strategy. Possibly something like distributed assembly/sales and service through a franchise model.

 

[Rosemount]

Owner of Bicycle chain store here locally , told me he expects high demand for at least 18 months .

 

[GrandPaBrogan]

We all know that bike sales took off this year as people on lockdown and/or furlough decided to take advantage of the time off and buy a bike. This drove the prices of used bikes up as people who were thwarted from a new bike lowered their sights.

On another site, someone posted a clip from a magazine interview with Trek at the start of the Covid-19 problem. Their top guys had all got in a room and forecast the best and worst cases for their company. The best case was 50% fewer sales in 2020. Unfortunately, the clip posted did not go onto reveal what Trek actually did as a result. Did they reduce orders at the factories, reduce stock? What? Did the other bike makers do the same? Is this why everywhere is sold out? Yes, I know more bikes were sold overall. But normally there is a load of odd sizes left over and brands that don't normally sell well. But they all sold. So what is happening now? Are the same guys meeting to say it won't last, or are they cranking up production to ride the crest of the wave? In a year's time will there be a glut of bikes and with used values on the floor. Or will it still be like now, madness with long lead times and for example, the entire stock of DeVinci emtbs for 2021 already sold (according to a post on here). The bike manufacturers cannot afford to get this wrong.

You sir, have just described the Taiwanese Bike Industry's mother of all nightmares (where most of the bikes and related componentry are currently made). All this in the midst of international travel restrictions and possible threats of shipping/exporting embargoes. Do they invest heavily to increase production capacity only to be shut down by a sudden drop in market demand [for every action there is an equal and opposite reaction]?... or b) to NOT invest and leave production capacity as it is - BUT risk a resurgence of bike factories re-opening in the EU or other countries to avoid delays and supply risk, IF there is no vaccine breakthrough and international borders remain closed for much longer.

In the meantime, I've heard that present lead times for wholesale component suppliers (Shimano, SRAM, SR Suntour, Tektro, Velo, etc) destined for manufacturer assembly plants is now - one year. Can you imagine how insane the planning for conducting a production-run for just one bike model would be under those realities?

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[steve_sordy]

For the last 25 years of my working life I was in the Supply Chain business, so I fully appreciate how an unforeseen event like a pandemic can make things really tricky. But what has driven up the difficulty is finely tuned supply chains that are driven by minimum cost. Not just minimum cost, but minimum stock and work-in-progress (both same as min cost). As long as future demand is predictable, this is a model that will work. Long leadtimes may be lowest cost for some, but they lead to reduced flexibility, reduced agility if you like (latest buzzword). With reduced ability to react to the market, you either lose sales or are left with a load of old stock. Both have a cost associated with them. This should lead to changes in how supply chains are constructed and managed. I'll stop there as I was about to plunge into a load of free consultancy....zzzzzzzzzzzzzzzz