Price trends in the bike industry: Is the bike boom coming to an end?
After the Chinese government had to abandon its zero Covid policy, a new wave of coronavirus is sweeping across China. Sick leave could now once again bring factories and logistics to a standstill, and coronavirus could spread beyond China after the Chinese New Year (21 January to 7 February) and also slow down production in other Asian countries. The next crisis is already looming for the bike industry - even though it has not yet recovered from the protracted supply chain problems from the early days of coronavirus. "This recovery will take a particularly long time for the large and internationally active manufacturers," predicts Steffen Barkhau from Giant Bicycles. The processes are particularly complex and the demand for raw materials is particularly high. What's more, the buying mood in Germany has been declining sharply since last autumn. People are particularly reluctant to buy expensive goods that are not part of their daily needs. Does this also threaten the e-MTB market with a slump in sales?
High-quality fullys are still in high demand. Components are still in short supply and some 2022 models have not yet been delivered. It is therefore unlikely that an oversupply will depress prices for the time being. - Jo Beckendorff, industry expert
Industry expert Jo Beckendorff differentiates: First and foremost, high-quality branded components are in short supply, which has an impact on the availability of high-quality bikes. At the same time, however, demand for precisely these bikes is still high. Sales of more affordable e-mountainbikes, which ironically were also much less affected by the parts shortage, have fallen more sharply. An oversupply of affordable bikes therefore seems likely in 2023. The bikes lying in stock at the manufacturers after order cancellations are also to be brought onto the market, which will probably only work with price reductions, according to Beckendorff. So it seems that manufacturers are now increasingly trying to tickle demand with discounts and offers.
Further articles on the topic of price trends:
Discounts and offers from major bike manufacturers
On Instagram, for example, there have recently been many posts from Canyon that advertised their "Trail Sale". On the manufacturer's website, the "outlet" offers many popular models in a few sizes but at reduced prices.
Price example:
Canyon Neuron CF 9 (size L only) - reduced from 3999 euros to 3349 euros - 16 % discount
Another example is Specialised. The manufacturer announces its price reductions in a press release and "SALE" signs light up on the website. This applies to the entire portfolio of high-end bikes, with no restrictions on sizes.
Price examples:
Specialised S-Works Turbo Levo - reduced from 15,000 euros to 12,000 euros - 20 % discount
Specialised Kenevo SL Comp - reduced from 7900 euros to 6500 euros - almost 18 % discount
The third example is a smaller provider: Propain. But he also offers his Tyee model with a discount of up to 500 euros or 20 per cent on the frame kit.
A good time for savers, you might think, but Sebastian Tegtmeier from Bike Components is sceptical about the medium-term development: "If manufacturers undercut each other on prices now in order to empty their stocks, manufacturers and dealers will end up with less, while costs rise at the same time." In the long term, service in particular could suffer as a result. "Generous warranties - such as lifetime warranties on frames - could then be cashed in on by manufacturers," says Tegtmeier. Or production could become cheaper again and bikes could have inferior specs for the same price.
Retailers who were particularly optimistic when ordering goods last year also run the risk of being left holding the bag and getting into financial difficulties. Nevertheless, economic experts see inflation easing slightly towards spring. This will also be accompanied by a brightening of the buying mood. Nevertheless, the gold-rush mood seen at the beginning of the pandemic is likely to be over in the bike industry for the time being.
The price trend from a customer's perspective
It is clear that the changing prices will initially please customers. However, a letter from a reader shows that this can have bizarre consequences.
Last October, Basti - let's call him that - took the Canyon Spectral 125 CF7 ordered for 3499 euros. Delivery should take until the beginning of January. On Black Friday (25 November), he was surprised to discover that the same bike was being sold for 3199. Basti reacted quickly, ordered this offer and cancelled the previous order. His new bike is now due to arrive at the beginning of February. In fact, the parcel carrier is already at the door at the turn of the year, which makes Basti very happy.
Then the disillusionment when he receives the Canyon newsletter and is informed about the "Trail Sale". Now the standard price for his Spectral has dropped to EUR 2999 and it is being offered in the Trail Sale for EUR 2499 - 1000 less than when he first ordered it in autumn.
Basti contacts Canyon and asks for a subsequent discount - also in the form of a voucher. But the support team refers to the "price development" and "can't do anything".
Facts and figures about the bike world 2023
Bike companies were already laying off employees on a large scale last year. But there are also rays of hope.
20 % of the workforce was made redundant by the online accessories shop Bike Components in the summer of 2022, and at the end of 2022 the managing director also changed.
October: Rising inflation and fears of high energy prices put the brakes on consumer behaviour. In October 2022, consumer researchers reported a historic low. Since then, however, there has been a slight but steady upward trend.
Propensity to buy: Experts use this term to describe how likely it is that a consumer will buy expensive goods that are not part of their everyday needs. For example, e-mountain bikes. This figure is still stagnating at a low level, as many people postpone expensive purchases for the time being. At least until the next electricity and gas bill arrives.
Specialised is also making a whole swathe of employees redundant. Eight per cent of employees worldwide will have to leave. However, locations in Germany, such as the development centre in Freiburg, which has only just been established, are not affected.
10 % price increases are still a trend, now also among manufacturers whose prices have remained stable so far. However, brands such as Scott and Haibike are now also increasing their prices by 500 to 1000 euros for 2023.
Chinese New Year? The date depends on the lunar calendar and falls on 22 January in 2023. The six days after that are public holidays in China and Peak travelling season. The fear: Corona could then spread significantly and paralyse factories and logistics again.
Bike industry experts give their opinion on the future of the bike market
Statement from Steffen Barkhau, Giant Bicycles:
Demand in the market declined significantly in some areas in the last quarter of 2022. This mainly affects the entry-level segment of 'simple' e-hardtails. However, more sophisticated full-suspension e-bikes continue to enjoy brisk demand. As far as we can see, this trend will continue in 2023. The topic of light e-MTBs will further fuel demand.
Statement from Colin Pfister, Focus Bikes:
Although the situation is easing a little, we are still a long way from the pre-corona status quo. Some components in particular still have long delivery times, which is also affecting the delivery of bikes ready for sale. Our dealers have already told us of their concerns about declining sales figures. Together with our dealers, we will monitor the market and then find the best solution together.
Statement by Jo Beckendorff, business and industry expert:
It is not yet clear what effect the Chinese New Year and the associated desire to travel will have on the Covid wave there. What is clear, however, is that if the factories come to a standstill again, the bike market here in Europe won't feel the effects until 2024/25 anyway. The 2023 bikes have long since been produced and are currently on their way to local dealers, provided that deliveries are not slowed down by new Covid cases.
Statement from Sebastian Tegtmeier, Bike Components:
After last autumn's restraint due to inflation and high energy prices, we are now seeing a slight improvement in consumer behaviour. However, there are signs of an oversupply of complete bikes, which could lead to a real price war, especially for affordable bikes. And cheap bikes are also depressing prices here in the aftermarket. The whole industry will then certainly face a turbulent time.
