The woes facing some of the biggest companies in the bike industry are showing signs of continuing, as Giant reported a drop in sales of 20% in the first quarter of 2024.
According to the brand, inventory issues that have arisen in the post-Covid era are largely to blame for the drop off.
Comparing its figures to the same period in 2023, the Taiwan-based company also announced that its net profit after tax was NT$520 million (£12.8m, $16.1m) which represented a drop of 37.8% compared to last year.
Nevertheless, Giant’s assessment of the situation was a largely positive one. The brand insisted that its sales in China continued to be strong but demand in the US and Europe remains low.
“With the launch of new models, Giant expects to see continued sales growth in China,” the brand said.
News of the latest drop in sales comes not long after Giant released its financial report for the last year, which showed a decline in sales of 16.4% year on year. However, the brand said e-bikes were a key market for growth in order to turn the tide.
The brand’s financial report said: “E-bikes not only align with the current green energy trend but through product diversification, new innovative products developments and offerings would cater more towards consumers’ lifestyle and broaden the global cycling population.”
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Giant’s sales were down approximately 18% in January and the drop off reached 27% the following month.
Giant is not the only brand to place blame for financial issues on inventory problems. In the wake of the Covid pandemic, many other brands experienced similar inventory related difficulties.
Some found that they experienced unprecedented high demand during the periods of lockdown around the world, but this tailed off once Covid restrictions were removed.
In January, it was revealed that Scott Sports had received a loan of CHF 150million (£137m, $174m) to help “improve its financial structure” and balance its high stock inventory.
Bike component giants like Shimano have also suffered. The Japanese company’s report for the 2023 financial year revealed a year-on-year decline of 24.6% in revenue and a 52.3% drop in net profit.
The Bicycle Association, a national trade association for the UK cycle industry, has said that it will likely take at least until 2025 for the British bike industry to correct itself.
In late March, Giant launched the latest incarnation of its TCR road bike. According to the brand, the bike was well received at the Taipei bike show in Taiwan and had subsequently received “positive feedback” from Chinese consumers at the China bicycle show earlier in May when it was held in Shanghai.