The recent decline in bike purchases contrasts sharply with the previous two years when the epidemic caused customers to swarm bike shops to avoid public transportation, amuse their children, and spend more time outside.
Back then, purchasers were frequently required to wait more than a year for the delivery of their new vehicle or pay exorbitant amounts for whatever was offered.
Now, retailers may need to give discounts to move unsold motorcycles, and small dealers and manufacturers may experience cash flow issues as a result of keeping unsold inventory.
The sections below provide more details on this issue.
The State of Bikes Today
Although sales of conventional motorcycles have suffered recently, the industry's long-term outlook is still positive. E-bikes are incredibly popular, and cities are now providing room for cyclists.
Why spend more money on a car or van when two wheels can achieve the same thing for far less money?
Thule Group AB, a Swedish manufacturer of bike accessories, issued a warning that third-quarter store inventories of bikes and biking gear had increased.
It stated that "bike shops around the world have lowered their purchasing significantly" when combined with inflation-related customer concerns. A day later, the manufacturer of helmets, MIPS AB, issued a warning about "excessive high inventory levels" of bicycles and bicycle accessories at dealers.
Demand has to level off eventually. The so-called bullwhip effect, in which prolonged lead times and erroneous demand forecasts result in excess of inventory, affects a number of industries. Similar problems have plagued manufacturers of backyard grills and exercise bikes.
A further barrier for this company, which typically has low margins, is the cost-of-living crisis. Although converting from a car to a bike can reduce fuel use, prospective buyers might be hesitant to spend four or five figures on a two-wheeler.
Recently, consumers have shifted more of their disposable income away from material purchases and toward experiences like travel.
The oversupply of goods at the moment primarily affects the lower end of the market. The mid- to high-end market-serving German direct-to-consumer company Canyon Bicycle Gmbh achieved $329.6 million in revenues in the first half of 2022, a 25 percent increase.
The Advantage of E-Bikes
E-bikes, which include an electronic motor to give the user extra power as they pedal, are still a plus. E-bikes sold out within days after becoming available on Signa Sports United NV's websites.
The growth can be attributed partly to the acceptance of employer-sponsored leasing programs and applications like Lime, which allow users to borrow bikes for a few euros to try them out.
It makes sense that e-bikes are becoming a more common option for commuting, picking up children from school, and last-mile delivery of goods. Bicycle manufacturing still has a relatively low-profit margin, and many dealers and niche manufacturers are driven more by passion than by financial gain.
However, the introduction of e-bikes is what has caused the price of a new bike to virtually triple over the previous ten years. This additional potential profit is encouraging consolidation and drawing in new capital.
E-bikes have the potential to save the bicycle boom. E-bikes can provide an easier cycling experience and increase the range and speed of cyclists. Additionally, they can be an excellent way to get commuters to their destinations without having to rely on public transportation.
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