Shimano has invested $179 million (20 billion yen) in a new plant in Singapore and $118 million (13 billion yen) in its existing Japanese facilities that will help it meet the increased demand for cycling parts brought on by the pandemic,
Bicycle Retailer reports, citing
asia.nikkei.
During the pandemic, cycling allowed people to avoid public transport and undertake socially distanced exercise which, in combination with government infrastructure policy, meant that demand for cycling parts skyrocketed. This has been a fruitful time for the industry and Shimano itself ended the year with a
2.7% net sales increase in its bicycle department despite a 15% sales slump in Q1.
However, the pandemic has been a double-edged sword as bike brands have struggled to keep up with the increased demand due to
factory shutdowns, a shortage of shipping containers and even
the grounding of the Evergiven in the Suez Canal. Brands are now reporting lead times of more than a year for some products and it seems unlikely that this will change through the rest of 2021.
We've
previously reported that manufacturers have been reluctant to increase their capacity as they were wary of the sustainability of the current boom. If the bubble were to burst, a manufacturer could be left with excess capacity and not enough orders to fill its slots however, Shimano's investment may be a sign of confidence that the growth from the pandemic is more sustainable than previously believed.
Shimano already has a facility in Singapore however that plant was built in 1973, whereas this new plant is said to be the "factory of the future" with an emphasis on digitization. The new plant is expected to come online by the end of 2022 and will manufacture high-end transmission parts. Shimano is also investing another $118 million (13 billion yen) in its two Japanese factories in Osaka and Yamaguchi. These investments will go towards new machinery and software that will reportedly allow it to increase capacity by 1.5 times by the end of the year compared to 2019.
Shimano isn't alone in betting on the continued success of the cycling industry. This
Reuters piece cites "industry insiders" who believe that, "the increase in ridership will endure after the outbreak eases, citing governments’ interest in improving health and easing city congestion, as well as expectations that people will stick with leisure and exercise habits formed during lockdowns, especially if they continue working from home".
Having free access to all trails spreads erosion more evenly and reduces conflict. England just needs to catch up.
Our access into the hills and forests is more complicated than a simple "aye nae problem! " or "naw, get tae f@#k"
we have a small population with large empty spaces which definitely has an impact in whether authorities feel the need to "regulate" mtb or just leave us be.
However we have the "right to roam" access laws which for the end user basically gives us carte blanche to go where we want. For the landowner however, they then need to ascertain whether the user is causing damage or not .
Trail building awkwardly spans that criminal damage/fair use of the land issue . ..... which is nicely convenient for mtb'ers
In scotland our right to ride a trail is pretty much a given and set in law. Building said trail however.... not so much !
Have you considered that Shimano really hasn't been able to meet demand since they came out with 12 speed, before the pandemic? That even before climbing demand, they were behind the ball. And now they have an additional e-bike component lines to manufacture on top of their regular entry level/commuter/road/gravel/mountain lines?
I think this is less about ramping up for a bubble, and more about catching up to where they need to be to manufacture for a baseline that doesn't see them spread too thin losing market share.
And as others have mentioned, Shimano hasn't been able to keep up with demand since before the covid bike boom started.
A slowdown is probably coming for MTB once the backlog clears, but Shimano will be doing just fine.
Pinkbike comments section: “We don’t need no stinking degrees!” … proceeds to spout uneducated nonsense.
And you're right, no one has a crystal ball. But with enough insight you can probably construct a few probable scenarios that are quite likely to happen. The million dollar question really is when will things level off or decline.
Every time a bike manufacturer in Taiwan, Cambodia, Malaysia, etc, builds "high-end" equipped bikes, they have to import from Japan. The new Singapore factory will circumvent some of the supply chain, as Shimano's existing Malaysia and Singapore factories only produce lower end components. I suspect the flagship groups may stay in Japan, but the 105/Deore, and possibly even Ultegra/XT, level stuff may finally be kicked out the door.
It’s ridiculous.
This parts shortage will put on hold the craziness of new (unsless) standard!
They are raising prices everywhere.
And - what do you mean inflation -aren't you happy about the 16c you saved on your 4th of July BBQ?
- show up (not stoned) at 6am everyday ON TIME for a 10hr shift.
- work a swing or graves shift.
- not complain when they get in trouble for f*cking up an entire lot of derailleurs.
- work in this job for over 1.5yrs to prove your worth.
good luck!