Shimano Invests $300m in Japan & Singapore Facilities to Increase Capacity

Jul 12, 2021 at 11:13
by James Smurthwaite  
Finishing and gluing line
We had the chance to visit the Shimano Osaka facility in 2018, you can read more about that visit, here.


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 Deore on Vancouver s North Shore 2020
The new plant will come online by the end of 2022 and will manufacture high end transmission parts.

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".


126 Comments

  • 75 3
 I hope the trend toward more cycling continues, but even if it levels off some this is still great news.
  • 56 19
 I do get the impression that some places here in the UK really could do without yet *more* riders, carparks are already overflowing, trails are eroding quicker than ever, some areas are being closed due to conflict, and litter can be found waaaay more than it used to be.
  • 27 0
 @bigtim: Are UK mountain bike groups successful in getting community support for building and maintaining new trails as ridership increases? Hopefully with popularity comes increased trail support and respect for the outdoors. (But as is often the case it only takes a careless few to trash trails for everyone else)
  • 20 1
 @bigtim: More riders, and in general more outdoor users, is not a bad thing-new rider education, sustainable trail building in ways that can accommodate more users (directional trails and in some cases more of them), and greater advocacy need to all be part of the picture. Us more experienced mountain bikers need to demonstrate leadership by participating within our bike advocacy groups, and the industry of course bears a responsibility to support those groups.
  • 12 0
 @bigtim: In Oregon trail use by all users (hiker, bikers) is way up and I personally can't wait until people return to concerts and bars instead of randomly clogging up the trails and parking areas. I don't even try to ride any shared trail during peak weekend times any more. For the first time ever last fall I came across a hiker coming up a bike only downhill trail. In the same area for the first time I came across hikers taking a trail from the same area to a mixed motorcycle/bike/hike area. You never saw hikers there before because it smells of 2 stroke oil and sounds like a freeway due to all the motorized traffic. There are no scenic views. The hikers have just run out of good trails to hike and every indoor activity was locked down.
  • 7 14
flag Jamminator (Jul 13, 2021 at 15:18) (Below Threshold)
 The biggest threat to cycling's future is global infrastructure. With respect to road biking, the most popular segment within cycling, the only reason bikes have yet to banned from surface streets is because consumers have essentially self-regulated themselves: People are scared to get on a road bike and go ride on the public roadways. Could you imagine if everyone who ever wanted to ride for whatever reason (health, leisure, commute, etc) all of a sudden decided to? And we instantly had tens of millions new cyclists on the streets across America? Our politicians across the country would be holding emergency summits to try and ban road cycling when people driving cars just tripled their commute time and trucks were having delayed freight delivery.
  • 17 17
 We need less people getting into bikes not more. There’s already way too many.
  • 21 4
 Bicycles don’t clog roadways, single occupancy cars clog roadways @Jamminator:
  • 12 1
 @jwestenhoff: All very well if you have the space and the funding for more trails. We have neither here in most of the UK riding spots. Also most places where people ride are multi use, you have lots more riders and dog walkers all using the same space, leading to more conflict. Most land owners and managers aren't open to more trail building, if anything they want to remove some of the trails that are already there, trails I've ridden for over 20 years are being purposely blocked. I've yet to see anything positive come from the explosion in rider numbers local to me.
  • 5 2
 @commental: Somewhat selfish to imply that only those who were riding in the long long ago should be allowed to ride now. The problem in the UK isn't too many riders, it's a lack of space to ride. Everyone just ends up in the small amount of woods remaining. Ideally we need more open access type land (re-natured farmland maybe) but I can't see it happening.
  • 3 4
 @HPdeskjet3630: that’s never going to happen and if it does they won’t be building any trails. Nobody’s saying those that came first should be the only ones riding but we should be actively encouraging people to not get into mountain biking and talking those on the fence into scuttling their bikes and taking up golf.
  • 6 0
 @HPdeskjet3630: Correction - the problem in ENGLAND is a lack of places to ride. And that's almost entirely down to archaic access laws. Up here in Scotland we've not had much of a problem with conflict - if one area gets to busy like the trail centres in the Tweed Valley, riders can go elsewhere and because we have decent access laws we can ride any trail we want.

Having free access to all trails spreads erosion more evenly and reduces conflict. England just needs to catch up.
  • 2 0
 @bigtim: The largest increase come from people using their bikes to commute. The wave of "weekend warriors" will subside and you can have your parking spot back...
  • 3 0
 @pacobolo: @Jamminator: OK math time.. If tens of millions of people decided to ride their bikes, they wouldn't be driving their cars and there would be less congestion. Motorists who don't take their bikes will need to change their habits and drive accordingly.
  • 1 0
 @enduroelite: I hope your right!
  • 1 0
 @lukeb: Scotland has the population of a small city. I was in Scotland at the weekend and there’s literally nobody there and half the country is owned by the forestry commission. They just don’t have the resources to clamp down on mountain biking like they do in England or they would be doing.
  • 2 0
 @commental: fair enough, I know we have the luxury lots of room in the US, where I live in the western states the land is actually majority undeveloped public land. I am still very positive about expanding ridership-more riders is more voters who ride and pay taxes, and hopefully will get politicians to pay attention to these access issues.
  • 4 0
 @thenotoriousmic: umm yes and no.

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 !
  • 1 0
 @forkbrayker: Exactly, they don’t really want you building and riding on their land it’s just they can’t really do an about it and there’s not enough people for it to be an issue. Someone builds a new trail around here and there’s a que of riders waiting to have a go the following weekend. There’s definitely too many mountain bikers and just people in general in England.
  • 1 0
 @HPdeskjet3630: So you acknowledge there is an issue with space as I stated, come up with an unworkable solution which as you say will never happen and accuse me of things I haven't said. Cool, have a good day dude.
  • 1 0
 @SmilinBill: The quality of bike that I see on our downtown bike paths has increased quite a bit and for the better as many bikes in the passed were clapped out city bikes that were left outside all winter to rot. I see high end hybrids and road bikes and even dual suspension bikes now. Its very refreshing. But the quality of bikes on the trails has dropped. Many big box brands, and other bikes in varying states of disrepair. When the travel bans are lifted, those folks will go back to flying to Cuba for vacation. The same thing happened when Nortel tanked.
  • 2 1
 Yikes! This went sideways fast. I still feel in many/most areas with some smart planning and education (of both the new riders and the entities that govern) that more cyclists is a good thing.
  • 28 6
 Classic boom / bust cycle...they will ramp up supply, demand will flatline, then all these parts will be sold at discounts. Hold on to the stuff you got - late 2022 should provide great buying opportunities.
  • 5 2
 Totally agree with boom/bust and that this boom will bust fairly soon. Having lived through several other, "Growth is here forever!" cycles in the bicycle industry, I will be very surprised (pleasantly) if this one defies the seemingly-inevitable trend. Shimano will be OK with their increased capacity, but downstream things will almost certainly contract again.
  • 3 1
 @Marquis: 100%. I'm not implying this is a bad move for them - I have no clue. They have plenty of smart people on their team that made this decision. That said, the demand will not continue to climb like it has the past 18 months...there is just no way. I predict it will be a while, but there will be plenty of bikes and parts available, and likely so many that we'll be seeing heavy discounts on 22/23 model year stuff.
  • 1 0
 Discounts in 2022? No, definitely not, some stuff is already sold out for next season. But shortages and price hikes might not be quite as massive as this year, if Shimano can get mor capacity online fast enough.
  • 33 4
 I have to ask - for those who forecast boom/bust cycles with so much confidence. What is your educational background? How do you have so much confidence? Genuinely curious when people can post these things with such confidence, what insights and assumptions you are working with.

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.
  • 10 1
 I'd normally agree with you, but e-bikes aren't just a fad and are bringing a lot of new riders into the sport. Just tons and tons of urban e-bikes being sold. As batteries and e-drivetrains mature and get better/cheaper, the sales will increase.

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.
  • 11 0
 @privateer-wheels: MBA, 35 years in the bike biz , from shop mechanic to GM at a global manufacturer. All you say is true and as I said above, Shimano will be fine. Downstream, i.e.shops, will probably take the hit as they have in every other cycle. "Bust" in this context doesn't mean sales are halved. It means growth stalls and drops off, which is most detrimental for those companies aggressively planning for growth. Shimano is and always has been very conservative, so as others have noted here, this expansion was probably in the works well before the pandemic and the boom that it generated. See this link: www.statista.com/statistics/236152/us-unit-sales-of-bicycles
  • 1 0
 @privateer-wheels: Sorry, that link is behind a paywall. I have an account, so I forgot that they want to get paid for their data. Smile
  • 4 0
 @MikeyMT: Shimano is an extremely conservative company. If they are expanding infrastructure, it was already needed years ago - and independent of Covid. In fact, I can say we in the USA had issues with Shimano's supply chain even before 2020. The move to Singapore also makes a lot of sense as more bike manufacturers are relocating to various nations across SE Asia to escape newer Chinese tariffs. This was a long time coming and much needed.
  • 2 1
 @Jamminator: Like I said...I have no clue what the behind the scene decisions looked like, nor was I stating this was a bad move - clearly Shimano needed more capacity as several already stated. My comment was a broad brush commentary on the industry as a whole. We're in a boom cycle...all boom cycles end. Mania and supply shortages always end the same way...manufacturing ramps up to meet it, demand flatlines (as already noted - bust here is not some great depression...simply a flattening of the hockey stick), and there is too much product...so what happens when there is more supply than demand...prices fall as manufacturers look to recoup the investment...overtime things normalize (again), and then some form of the cycle repeats. In terms of my credentials...I've been commenting on the internet since 1997-ish so you should put a lot of faith in my comments. Wink
  • 1 1
 @privateer-wheels: I post economic opinion with the same confidence I post wheel size opinion Smile Its just bike man, anyone that pretends they know shit about the future is lying. Look back at my language, certain words were used to hedge against me being wrong (which theres a 50/50 chance I am!) Smile
  • 3 0
 @privateer-wheels:

Pinkbike comments section: “We don’t need no stinking degrees!” … proceeds to spout uneducated nonsense.
  • 3 0
 In Jan 2022 there will be excess bikes, and sadly a huge number of pandemic dogs dropped off at shelters.
  • 1 0
 @Marquis: Just a devils advocate opinion. It seems like there may be a lot of people who got into cycling during the pandemic and realized how amazing it is. Obviously there are some people who will go back to their regular lives but I'd guess that we permanently have a larger portion of the population who will continue to ride bikes.
  • 3 0
 @MikeyMT: I am just curious, you never know who you are talking to. @Marquis sounds like he probably has a fairly educated and well informed opinion. You may as well, I'm not here to say you don't. But when it comes to economics, I always find peoples opinions interesting and like to kick the tires a bit. I'm not trying to throw you under the buss here by any means.

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.
  • 1 0
 @privateer-wheels: exactly. and where is my bloody fishing reel, i'm tired of wating Shimano!!
  • 2 0
 Shimano is a Japanese ran company. They do their homework and are typically pretty conservative on (sustainable) growth projections, I think this is likely due to e bike market growth worldwide. It’s a good thing.
  • 16 1
 "High end transmission parts"... I got $20 on the fact we will see 3 on the tree this decade...
  • 10 1
 I'll hold out for four on the floor.
  • 32 39
flag JefWachowchow (Jul 13, 2021 at 9:10) (Below Threshold)
 @kcy4130: Both better than one up the bum
  • 22 53
flag kylethehobo (Jul 13, 2021 at 9:14) (Below Threshold)
 @JefWachowchow: why the homophobia? Many people like it up the bum and your comment is just shitty.
  • 9 2
 @JefWachowchow: I'm just here for the fifth under the seat
  • 6 13
flag camcoz69 (Jul 13, 2021 at 10:36) (Below Threshold)
 hmmm six on the tit?
  • 2 0
 And go double on the bubble, with a low range transfer case?..
  • 4 5
 @kylethehobo: you are both right, his comment is shitty, so is up the bum
  • 1 5
flag camcoz69 (Jul 13, 2021 at 13:31) (Below Threshold)
 ok ok seven on the Kevin
  • 9 0
 Man if this goes as planned, you can get an M8100 shifter in 2024 instead of 2026!
  • 1 0
 @Beaconbike: Take a closer look to see which derailleur that shifter is for.
  • 1 0
 I keep hearing the XT shifters are harder to push with the 12spd stuff. Is that not right?
  • 7 1
 What does "high-end transmission parts" actually mean? Is that high end as we think of it (xtr), or is that high end compared to walmart bikes, i.e. deore and above?
  • 23 0
 I'd guess the latter. Shimano manufactures an absurd number of low end, sub Acera stuff for walmart bikes and the $500 hardtails/hybrids/road bikes that are the bread and butter of most LBSs
  • 13 0
 Most of my 12 speed deore parts say made in Japan on them, which seems to be where the higher quality stuff is made. I'd imagine high end includes deore and up.
  • 7 0
 @VtVolk: 100% correct you are. High end stuff is such a small percentage of their biz.
  • 4 3
 I suspect it’s for e-bike drivetrains, which will cannibalize the non-pedal assist category somewhat.
  • 1 0
 High-end refers to the Japanese produced parts... I.E. Dura-Ace/Ultegra/105, XTR/XT/Deore, GRX, and some eBike componentry.

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.
  • 6 0
 This is the best news out of the industry in a while and the biggest story of the month. Thanks, James.
  • 4 0
 its a win win for shimano - they get to keep production in Asia whilst avoiding the controversial countries.
  • 5 0
 Sounds like production if about to shift gears. Aaaaaaaaaaahhhhhhhhhhhhh!!!!!!
  • 2 0
 How about shimano spend some of that money into better products. i have 1 set of zee's, 1 set of saints (older m810) and a brand new set of deore 4pistons all leaking brake fluid. The deores leaked at caliper brand new out of box but since i gave them the benefit of the doubt i wiped them clean and went for a ride. they still leaked and when asked about warranty the shop said no warranty due to me installing them. Unbelievable! love the power of the brakes but next set wont be shimano.
  • 5 0
 I just want a new right side XT lever.
  • 1 0
 Sending in my second warranty m8100 today. Quality beats supply every time, if they failed less there would be more for more people.
  • 1 0
 In Chicago, I feel like the ridership peak is past. Trails are drastically less busy, feel almost back to normal. Shops lead times are reasonable again, kids bikes are back in stock if not plentiful. Used market is busy.
  • 3 0
 Just want to be able to pick up a 12 spd xtr chain…
  • 1 0
 Or slx, xt…

It’s ridiculous.
  • 5 0
 Lol this isn’t Shimano investing in covid demands. This is Shimano maybe catching up with 2018. Here in Aus we haven’t had an spare parts since then, let alone seen any new tech. We have seen the press releases. Just not the bits…
  • 1 0
 @Ro0ne: maybe they forgot about Australia?
  • 1 0
 @5chmaus: They're probably afraid of the spiders
  • 1 0
 Managed to get hold of a new xt 12 speed cassette last week from my lbs They had just had a delivery and then said they may not get ant more until 2023!
  • 4 0
 I think they were probably joking. Looking at the dealer portal right now, the M8100 10-45t has an ETA of May, 2022, and the M8100 10-51t has an ETA of February, 2022.
  • 1 0
 @barp: you're lucky, ours refuses to put any eta dates on anything
  • 1 0
 Maybe they are hedging such that, if there is a drop in demand, then they jettison the factory in politically volatile Malaysia?
  • 1 0
 This is good news, and much needed to meet demand. Economies of scale should drive down prices, and demand will be up from pre-covid (even if only a small amount).
  • 2 0
 Are they sure they don’t want to do a stock buyback? That is what an American company would do.
  • 2 3
 End of 2022 well it’s better than nothing but guys home on your derrailleur and avoid sketchy sh!t that might break it!

This parts shortage will put on hold the craziness of new (unsless) standard!
  • 2 2
 Mean useless standard
  • 2 0
 I like the Microspline design, seems like it would resist damage better than XD
  • 1 0
 @DizzyNinja: Does XD actually get damaged? I’ve seen a few chewed up MS freehub bodies now.
  • 1 0
 @MaplePanda: I dunno, I’ve yet to use XD but I have used MS (steel) no digging cause the cassette cogs sit on a central cylinder that slides onto FHB. Tho I gotta say I do like the XD name cause it’s like a giant smiley emoji every time I type it XD
  • 1 0
 @MaplePanda: yep my MS free hubs were both chewed after less than a year when I took them off in order to go with MicroSpline 10 speed. (which is the best component decision I’ve made in a long time)
  • 3 5
 Prepare for higher prices too. They’re going to try and recoup their investment cost as fast as they can. I’m sure this won’t surprise most of us, as we’ve seen bikes and their parts continue to grow in price. I guess you call this business. Supply and demand going on here. But I’m certainly no expert on the subject either.
  • 3 0
 Hmm, well.. if they’re investing to increase supply then prices would be able to be held back? I’m also no expert but my guess is there won’t be a price spike
  • 1 0
 My first thought as well
  • 1 0
 @DizzyNinja: Good point. As I run a small business of my own (construction) I do know when I buy new equipment or tools my operating costs go up. So I tack on a small charge for the equipment because I was the one that took the risk and they were willing to hire me. I guess I assumed that’s how everyone did it as their business grows.
  • 1 0
 Plus, the high end parts will be made outside Japan. That has to mean prices will go down, right?
  • 1 0
 Not sure a new factory or expansion means increased prices to cover a CAR as this comes from a different budget. Maybe it means better operating environment, better procedures, rationalising of the line process, more automation etc.
  • 2 0
 Isn't shipment/transport still the biggest hang up?
  • 3 0
 For now, but at the end of 2022 when plants are operational (fingers crossed) we’re back to normal
  • 1 0
 VP for Specialized was in the Wall Street Journal yesterday. Getting a container from Taiwan to California went from $4000 in 2020 to 15-$20,000 for 2021.
They are raising prices everywhere.
  • 1 0
 I live in Singapore and I guess this is good news? Funny thing how Shimano products can’t be shipped directly here though.
  • 2 0
 Hurry up with the new Saint!!
  • 1 0
 Amazing! At this rate I might even be able to buy a 12 speed chain in 2024!
  • 1 0
 Why is there a comma, here...digitalization?
  • 2 0
 Thank you Shimano!
  • 1 0
 Just gimme that juicy deore or slx
  • 1 0
 Even if cycling demand plateau, Di2 Hyperglide+ fishing reels?
  • 1 0
 My goal is to never give Shimano another $. F that company.
  • 1 0
 Wow... that is a huge jump forward logistically!
  • 1 0
 meanwhile here in the US...
  • 1 0
 Finally
  • 1 2
 More than doubling their capacity, wow
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