furiousferret

I was talking to one of the guys at the lbs about the industry. He was telling me that there is a recession right now in the cycling industry and that Cannondale (better buy stock patentcad) is about to go belly up and Trek is not too far behind. According to him, the market is bleak with all the manufacturers, and alot of it has to do with overseas costs.

I know the industry may be in a small stagger post-Lance, but I find a hard time believing it's that bad out there. At least in California it seems like cycling is thriving, so what the real story here?

Talewinds

I haven't pursued finding the numbers, but what I see with my eyes seems quite the opposite. I think cycling is seeing a HUGE boom, 40% last I heard. I call BS on the LBS.

laterider

one would figure with the cost of gas, bikes purchases for commuting would be on the rise...

anyway isn't this industry normally cyclical?

Ih8lucky13

Every where I turn in my area cycling is more popular than ever, and I keep reading stories how cycling is becoming the new golf.

desmo13

Every report I have seen has been about the upsurge in cycling.

Talewinds

Wasn't golf the new tennis?

I see the same thing lucky, everywhere in my community, there are more and more bikes all the time. And when I go to my LBS on a Saturday afternoon, it's hard to get in the door while holding the door open for folks wheeling their brand new bikes out one after another after another. I LOVE IT! I hope it continues.

shakeNbake

I don't know if your friend has Martha Stewart-esque insider info, but my lbs is selling bikes (especially hybrids) like pancakes.

Chocolate chip pancakes.

With whipped cream.

And fresh strawberries on top.

shawnj73

There was article just yesterday in the Wall Street Journal? If I remember it correctly, it said the market was growing, and materials are getting hard to come bye! That bike frames costs are on the rise because of materials shortages. I think there is a thread on this article in this forum.

Cleave

Hi,

I'm not sure if your LBS guy reads the industry news:

https://nbda.com/page.cfm?PageID=34

I also think that you're giving Lance a bit too much credit for bicycle sales in general. He has certainly had an effect on the market but I don't think that you could show whole percentage points in sales due to Lance. Maybe for Trek but not the the entire industry.

blandin

Article with today's date From Bike Biz - a British publication

Road bikes heading for a dive in the US?

12:45, Aug 2nd by Carlton Reid

Bike Biz has obtained May and June bike sales stats which appear to show that US suppliers had overly optimistic forecasts for road bike sales in the run up to the Tour de France.

The stats come from monthly member-only market breakdown reports from the US Bicycle Product Suppliers’ Association (BPSA).

Inventory for May and June 2006 was massively ahead of actual sales in those two months. Year on year sales for May and June were up slightly but it appears from the BPSA figures that suppliers ordered in far too many road bikes.

Hopes of a market rescuing sales upsurge will have risen with the Tour de France victory of American Floyd Landis but would have then been cruelly dashed when, a few days after the end of the Tour, Landis was embroiled in a doping scandal.

Compared to just a few short years ago, road bike sales have made an almost miraculous return to favour and even some mainstream multiples now stock low and mid range road bikes but pessimists fear the market could be about to implode because of the over-loading of inventory. Road bike sales did not increase as far or as fast as suppliers hoped. Much of the inventory glut is due to Johnny-come-lately suppliers piling in road product when the market was already close to saturation.

Some suppliers are afraid of a BMX-style sales collapse with a glut of road bikes on the market at cut-throat prices to shift units.

In May 2005, the US saw sales of 27 137 road bikes worth $22.6m at retail. This year there was a 11 per cent uplift in unit sales to 30 844, worth $24.5m. This would be good news if it wasn’t for the unsold inventory waiting in the wings.

In May 2005, there was an inventory level of 55, 068. By May this year this inventory level had risen 98 per cent to 109,495. As road bike sales account for roughly 30 per cent of the US market, any dumping of product into the retail scene could severely impact on suppliers.

But it’s not all doom and gloom. US sales of hybrids are doing extremely well, perhaps indicating there’s an urban utility cycling boom on the way?

28,128 hybrids were sold in May 2005, rising by 70 per cent in May 2006 to 47,870, worth $10.4m, about 17 per cent of the US bike market.

And because when America sneezes, the UK catches a cold, the road bike glut in the US will likely impact over here in the next few months.

roadwarrior

Wow...not your fault, but I rarely see a post that is so incorrect. If Cannondale was "going belly up" why are they introducing several new bikes? Where are all the Trek bikes we keep getting in delivery coming from?

Just from my perspective in my neck of the woods, we cannot build bikes fast enough. And through the end of July, big year with everyone getting monthly bonuses.

In another industry, I know of a person who made similar comments about the financial condition of a competitor that were disparaging. He got sued. Lost everything. Because he was dead wrong.

One must watch what one says.

alanbikehouston

Trek's Wisconsin factory has been working extra shifts to keep up with demand. Cannondale is selling as many bikes as it can make. As much as the importers of "Chino-crap" wish that the last two large American bike makers would go away, they are continuing to dominate the US market for high quality bikes (bikes in the $1,000 to $8,000 price range).

DrPete 

So there's a lot of talk about the upsurge in the sales of "bikes," yet the one article about road bikes mentions a decline in the skinny-tire market. Both Trek and Cannondale make mountain bikes that also fall well into the $1000 to $8000 range.

Does anyone know the specific breakdown? Perhaps road bike sales are dropping off and mountain bike sales are skyrocketing or something.

EventServices

To give some indication of how bleak cycling's future has become, let me tell this quick story:

I'm promoting a race and a family fun ride next month in an automotive town: car is king. We got a late start, so we haven't begun promoting it.
Already, without publishing it anywhere, we're getting a steady stream of phone calls from families wanting to know where/when/how much/etc.
Our team website gets 300 hits each year, MAYBE. We got 600 hits last weekend.

Today, instead of being worried that we won't get any riders, I'm worried that we're not ready for the onslaught.

jimbud

With the baby boomer's retiring recreational hybrid bike sales have doubled in the USA. Road bike and Mountain bike numbers are up also. I have a hard time believing Trek is having money problems due to sales numbers.

merlinextraligh

Even the Bike Biz article above says Road bike sales are up year over year. The point of that article is just that's ther'es excess inventory, because they're not up as much as was predicted.

Long term, though, I worry. There was a surge in road bike interest with Lemond, that dropped off fairly quickly whne he retired. With Armstrong gone, and now the Landis fiasco, there's the potential for things to drop again.

-VELOCITY-

Wow I've seen the exact opposite. The place where I ride I've seen quite a few jogges picking up road bikes and hybrids. I don't see any decline at all.

robot

like stated above, cycling has become the new yuppie sport. The NYTimes had an article about this a couple of months ago. Cycling gives the yups a bit of an image booster, especially when they ride down to their local starbucks on their $8k purchase and show biff and buffy

Grasschopper

I will relate another story of seeing more bikes than every before on the roads and every time I am in my LBS they are nearly overwhelmed with buisness. They are selling bikes like hotcakes (as mentioned above).

I just got a Cannondale Rush 800 and I had to wait 2 weeks for delivery as both my LBS and Cannondale were out of stock in my size.

slowandsteady

oh please don't insult cycling by comparing it with golf. Golf is basically a long walk interupted by frustration.

Grasschopper

Not for most people...they ride. I hate carts.

R900

I think your LBS is full of it, and either an unhappy Cannondale/Trek dealer, or not a Cannondale/Trek dealer. Treks inventory looks low on most road models and friends are getting 6+ weeks lead time on new bikes. Cannondale was in trouble several years ago, but has bounced back with a get line up and strong sales, that I see.

Sales of cheap bikes (Wal-Mart, K-Mart) might be down, but quality bike sales still seem very strong around here.

John

joeprim

[QUOTE=
anyway isn't this industry normally cyclical?[/QUOTE]

Isn't bicycling normally cyclical

Good one!

Joe

godspiral

High hybrid sales is a good indicator of future road bike sales. As people who actually use them are likely to be interested in trading off comfort for speed.

As to huge inventories right now, that is good news for consumers.

chipcom 

The industry link from post #9 https://nbda.com/page.cfm?PageID=34 sheds some light on your questions.