Shimano announced in its fourth-quarter report released this week that sales in its bicycle products division for fiscal year 22 (FY22) totaled 517.4 billion yen, marking a record high for the second consecutive year.

However, while this figure represents a 16.6% increase over the previous year, it is a significant slowdown compared to FY21, which saw a 44.6% increase over the previous FY20. The report also predicts continued stagnation, with a significant decline projected for 2023.

"Although strong interest in bicycles during the COVID-19 pandemic showed signs of cooling, demand for bicycles is above pre-COVID-19 levels," Shimano reassured the market in the report's summary.

According to the report, Shimano's combined operating income from its bicycle and fishing tackle businesses increased 14.1% from ¥148.3 billion (£920 million/$1.1 billion) to ¥169.2 billion (£1.05 billion/$1.25 billion). Despite this, the forecast figures for FY23 show that the same figure is down 37.9% YoY to 105 billion yen (£652 million / $778 million).

Shimano states that in FY2010, "concerns over resource and energy supply, rising prices, and prolonged high inflation have led to weak consumer confidence and increased fears of an economic slowdown" in Europe. Despite this, "sales of bicycles and bicycle-related products remained strong, partly due to strong interest in bicycles. Market inventories remained somewhat high, although inventories of complete bicycles, especially e-bikes and high-end class road bikes, were in short supply."

The company stated. [In North America, "higher policy interest rates to curb high inflation put downward pressure on the economy, but personal consumption remained firm on the back of a solid employment environment," and "market inventories remained higher than appropriate levels due to supply adjustments of finished bicycles, although demand for bicycles remained firm."

Shimano said that while there are signs of growing interest in road bikes, high inflation in Asian and Latin American markets has dampened interest in bicycles.

In Japan, the brand's home country, Shimano said the market remains strong, but inventories of complete bicycles in the market remain high.

Shimano also noted "brisk" orders for the new 105 Di2 groupset and STEPS e-bike drive units, calling several items strong.

On the surface, Shimano's report may seem positive for having two record years at the same time, but given the projected economic downturn, it paints a similar picture to the woes felt by the rest of the industry over the past 12 months. Zwift will have 150 people in the spring of 2022. layoffs, and Wahoo followed suit.

Strava also cut jobs around the same time, and Pearl Izumi closed its offices and laid off staff after being acquired by United Sports Brands. Elsewhere, Rad Power Bikes (open in new tab) made its third round of layoffs, and publisher Outside Online cut senior staff at news sites CyclingTips and Velonews for the second time in a year.