Stand at any road junction in the City of London at peak traffic time on a weekday and you'd conclude that cycling in the UK capital is booming.
And you wouldn't be wrong – there are now more cyclists than motorists in London's central Square Mile financial district. A report commissioned by the Corporation of London last year claimed that cycling was the “single largest vehicular mode counted during peak times on City streets,” accounting for 40 per cent of traffic volume at peak times and 27 per cent at other times during the day.
London's population of cyclists has been growing strongly for 20 years. According to figures from Transport for London (TfL), there were 300,000 bicycle journeys every day in 2000. By 2012, that number had doubled and by 2023, daily bike journeys in London were about 1.2 million.
But while the roads are full of cyclists, the growth in cycle sales and manufacturing has slowed radically over the past year or so, as the pandemic boom hit the brakes.
Slowing global economic growth, interest-rate increases in the world's major economies and a cost-of-living crisis hit demand hard across many sectors, with cycling no exception.
"2020 was the strongest year in terms of sales for a long time, not just in the UK but around the world," Simon Irons, associate director at the Bicycle Association, told The National.
"The lockdowns drove people into a very limited set of activities, one of which was cycling.
"When you look back 3-4 years on, what's clear is that was a pull-forward of sales – people bought a bike earlier than they perhaps ordinarily would have done."
During the pandemic lockdowns in Europe and elsewhere, demand for bikes surged, simply because cycling was one of the few activities permissible during that time. That, some analysts argue, caused many manufacturers and retailers to overestimate future demand which, all else being equal, led to a drop in sales and the stock overhangs currently being experienced.
For example, revenues at Shimano, the world's largest maker of bicycle transmission systems, fell 13 per cent in the first half of its financial year. Likewise, the cycle-chain maker Guimeng recorded a 34 per cent fall in its first half revenues last year.
In November, the world's biggest bike maker, Giant, reported a third quarter profit of £38.1 million ($47.8 million), a 49 per cent drop on the same period the year before. At the time, Giant said that weak demand and "high inventories within the distribution network" were to blame.
At the end of November last year, weak demand was also behind the lowering of profit forecasts by the UK retailer Halfords, whose shares subsequently fell 19 per cent.
In Germany, discounting of stock that has been piling higher as demand shrinks has led to a serious squeeze on margins.
Manufacturers such as Van Moof and Prophete filed for bankruptcy and several independent retailers went bust last year. Some expect the shake-up of the industry in Germany to continue.
“It’s not over yet,” Burkhard Stork, managing director of the Two-Wheeler Industry Association (ZIV), told the Handelsblatt newspaper.
“We will see another market shakeout in the spring.”
Lag times
A major problem for industry was the time it takes for bikes to be ordered, built, shipped and eventually sold, a process that can take two years.
Based in the Birmingham in the UK, Reynolds Technology is the first link in the chain of the bicycle industry – it makes the tubes that manufacturers use to create bike frames, shipping them to bike-building companies around the world.
"During the pandemic, because demand was so high, everyone was putting up their minimum order quantities and their lead times, so people were in a bit of panic, saying 'well, I've got to order something – say 500 bikes for two years' time'," Reynolds Technology general manager Martin Shepherd told The National.
"Now suddenly they've got a supplier saying 'I've got your 500 bikes ready and I want my money', and they're saying 'I'm not sure I can sell 500 bikes'.
"Everybody panicked a bit, rather than taking a longer-term view."
Make do and mend
But while sales of new bikes have fallen dramatically over the past two years, there's been a bright spot in the service and repair sector, as cyclists tend to keep their old bikes for longer.
"It's the only area which over the past 12 months has seen volume growth," Mr Irons told The National.
"If you look at the overall volumes for servicing and repair, they're up 6 per cent over the last 12 months. Whereas, in 2022 bike [sales] volumes reached a 20-year low and deteriorated again in 2023.
"But servicing and repair by no means compensates for the drop-off in demand across all of the bike and accessory categories."
Infrastructure
Part of what attracts people out of their cars and on to bikes is a well-developed cycle network, making two-wheeled travel easier, quicker and safer.
The campaign group Cycling UK claims that government investment in the broader British cycle network has been patchy and while some cities, particular London, have enjoyed much support for bicycle infrastructure, others have experienced funding squeezes.
"Cutting the funding needed to make walking and cycling a viable option for more people isn’t just undermining the progress we’ve seen in recent years, but is also at odds with other progressive nations like France and Germany, which used the upshot in cycling during the pandemic to double down on provision to get more people cycling," Duncan Dollimore, head of campaigns at Cycling UK told The National.
"The pandemic showed the huge unrealised potential for cycling, but frustratingly, rather than capitalising on this to realise the wider societal benefits from more people cycling, we’ve seen the UK government squander that opportunity.”
Mr Irons agrees the opportunity to keep the investment and support levels for cycling, which tallied with the surge in demand during the pandemic years, has now been missed.
"In 2020 there were a number of measures that were published by government which were seen to be very supportive of cycling and active travel more generally, and something like £2 billion of investment over the life of the parliament at that time," he told The National.
"And what we've seen since is promises of support have gradually been rolled back. So, we would say that although there was a lot of positivity three or four years ago, actually by comparison now a lot of that's been taken off the table."
Riding into discounts
Analysts say stock levels among bike retailers are unlikely to return to normal until the later half of 2024, meaning consumers should be able to take advantage of deep discounting.
"Where there are overstocks, you're seeing fairly significant discounting going on, Mr Irons told The National.
"Our expectation is that prices will flatten out, but that will vary according to retailer and brand. We are seeing far higher levels of discounting in certain sectors right now and we expect that to continue this year."
Which definitely puts the customer in the driving seat, according to Mr Shepherd.
"It's a brilliant time to buy a bike, because there's 20, 30, 40 per cent off models," he told The National.
"This is not just retailers looking to clear out stock that's two or three years old, this is 2023 stock."
