The world's largest bike manufacturer Giant has seen a slump in trade in recent months, citing "high inventories" and “weak demand” from the US and Europe markets.
The Taiwanese company reported a pre-tax profit of NT$1.51billion (£38.1million, $47.8million) in the third quarter of 2023, a fall of 49% compared to the same period in 2022.
Giant also revealed that sales in the first nine months of 2023 were down 12.4% year on year.
A press release summarising the company’s activity, and shared by the Taiwan Stock Exchange, read: “The weak demand from the US and Europe markets on the entry to mid-level products and the high inventories within the distribution network resulted in the decline in sales.
“This year inventory reductions in both the US and Europe markets were slower than expected which affected sales performance for Giant’s OB sales in both the US and Europe markets for the first 3 quarters.”
The statement, however, noted “strong growth” in the Chinese market, where sales were up by almost 70% and “compensated” the slump in the West.
So far this year, Giant’s e-bike sector has made up almost a third of all sales. The company witnessed a “slowdown in consumer demand” for e-bike products, as it did with entry to mid-level road products, but predicts long-term growth in the market.
“Short term market outlook, the bicycle industry would continue to face challenges with inventory reduction as well as the business risks arise from the global economy,” the press release read.
“However, demand for performance level products in the US and Europe remain strong and the cycling trend in China will continue to support sales growth.”
Last month, Giant’s woes worsened, as it posted its lowest monthly revenue of the year.
Taiwan's second-largest bike manufacturer, Merida, has felt a similar squeeze, with sales falling 14.6% in the first nine months of 2023.
The companies' drop in trade mirrors the woes of the cycling industry as a whole, which suffered a downturn following the Covid-19 lockdowns.
UK bike sales fell to their lowest level in 20 years in 2022, according to a report published by the Bicycle Association, with overstocking now widespread across brands.
In 2023, three major distributors collapsed in Moore Large, 2Pure and FLi. Online retailer Wiggle Chain Reaction Cycles then entered administration at the end of October.
