Huge 2024 Bike Industry Cutbacks Already Started!
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- Опубліковано 5 лип 2024
- There's been three huge changes in the bike industry in the last month that point to tough times ahead. I'll cover Specialized cutting ambassadors, laying off employees, and Giant hiding their cutbacks.
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Timestamps:
0:00 Intro
0:26 The Problem In The Bike Industry
0:54 Specialized Cuts Ambassadors
4:00 Specialized Lays Off Employees
5:07 Giant Is Hiding Their Cutbacks
7:57 The Conclusion - The Industry Is Tanking
#BikeMarket #BikeIndustry #DailyMTBRider - Спорт
I'm so sorry about the microphone issues - rest assured it'll be fixed from here on out!
that was going to be my comment.
Nice table...
This was my first time watching your videos and great to see it addressed. Just one of those things, looking forward to following you from now on 😊
Table about as stable as the bike market
@@Allocated_Brain Me too.
Great job, love this type of content. It’s bad when a bike cost 8k and a motorcycle is cheaper.
8k ? You're kidding. 15k remember, those bikes are awesome 😄
@@ntphong999 I can't even afford a 2K bike 😢
@@Dan-Thiele A reminder that 2k bikes are "budget entry level" bikes.
Anything less than 2/3k is 'junk'.
@@main_stream_media_is_a_joke LoL, any bicycle costing 3k or more, is vastly overpriced. It's a bicycle, not a motorcycle, or an automobile!
@@ntphong999 it's not like all bikes are $15k and bikes over $12k were available 15yrs ago. That's pretty reasonable inflation.
Karma is visiting! Though I appreciate R&D and producing safe bikes but charging as much as $14,500 dollars is just wrong
You said it brother! I hope it’s a painful slow bleed.
This is the equivalent of somebody being angry at a smartphone company for selling a high end phone at a high end price. In other words, I strongly disagree with you. You get what you pay for. 14,500$ is gonna get you a really nice bike. You can still get a bike for say, 500$, but it's not gonna be as good. No one is stopping you from buying the lower end bike, and no one is saying you should buy the high end bike. No one complains about Dodge selling a half a million dollar car. You don't have to buy it, there are other, cheaper options, even from the same company. Also 15,000$. bikes have existed from multiple companies even before covid.
Yet I ride a 2015 full squish model bike I paid 2764.85 taxes in, Canadian, at a local bike shop spring of 2016. It came with a shinano slx drive train, mid range Fox suspension, and decent deore 2 piston brakes. Only upgrades since, a one up v2 dropper and slx 4 piston brakes. Till I tacoed my front wheel off a bad table top landing last summer,it rode fantastic. Now that my clavical is healed after surgery and rehab. I am upgrading the wheels and tires. I am not planning on purchasing a new bike as long as the frame holds and I can get parts for it. Being 3 standards old now, it is still as capable as these newer overpriced over bullshit tech hyped rockets. Remeber it's the rider, not the bike. I also have a 41 pound non hydro formed aluminium 2005 model year Brodie hallion hardtail with 130mm sprung fork, on 26 inch wheels I use as a dirt jumper. Still a rock sold bike almost 17 years since I got it new.
@@LindonSlaght I agree to an extent. Here’s my issue.. there is no way a $14K mountain bike has the same amount of R&D as a brand new 450 motocross bike. I guarantee the profit margins on the 14K mountain bike are astronomical compared to the 450 dirtbike.
@Lindon Slaght any yet how many people that rock there 2000 doller phones actually pay 2000 upfront? 99% of the population with these phones get them on contract and pay 20 to 30 a month for the phone. Other then financing a mountain bike, you can't just go into your local lbs and walk out with a 14 thousand dollar bike on cheap monthly payments for a two or 3 year term cycle. Very stupid anology.
Secondly, lighter carbon, bullshit wireless drivetrain, super boost and all the other crap they are force feeding you don't make the bike all that much better. Sorry to offend you, but it's Idiots like you that are stupid with their money that has perpetuated this problem. I agree with you that super expensive bikes have been around for decades. Only two types of consumers bought them in the past. The rich hobbiest and the person that actually did competitive racing and had pro support. Now it's Idiots under 40 or rich spoiled kids that are paying for these overpriced over speced usless trinkets of crap. Oh, my bike is 5 pounds lighter and looks cleaner because there are no cables. I am a better rider than you are. Now SRAM is marketing a universal derailuer hanger on there group sets, charging more. Let me tell you a little secret, that was an industry standard in the 80s and 90s, and department store brands had universals for decades All MARKETING BULLSHIT.
End rant.
I was at a Specialized dealer yesterday and the salesman told me I should hold off buying a new bike for a month or month and a half because prices are going to drop substantialy.
Interesting intel as I've been keeping a close eye on Specialized Gravel bikes for the last couple months. Let's see what a couple more months brings in terms of prices.
Yeah they can’t even sell their new Levo SL because they have too much inventory
I am looking at a new gravel rig...MSRP is $4+k. Will hold off until late Feb March timeframe. Let's see if the price drops.
Salesmen say all kinds of things.
@@mikeprice6658 Spring is when bike sales pick up for the season so you might pay more then
It seems like the bike industry isn't "hurting" but more or less returning to how it was before the pandemic happened.
@Alex G prices were creeping up even pre-pandemic.. Companies need a reality check in pricing ..
@@flow2tech .... The bike industry is sort of its own gig. Think about cars, as just one example. The high end luxury and sports cars are out of reach for most people of average means. They don't even consider them. No test drives, no thoughts about what they're giving up when they buy that Kia Telluride versus the highest-end Range Rover. Or....that used Mustang instead of a new Ferrari. It's even true in the motorcycle world, when the factory Supercross and Motocross race bikes are worth as much as $75-100K. That's a far cry from the "stock" bikes people buy at the local Yamaha dealership. People would love to have the ability to afford that level of performance, but they simply can't afford it without giving up virtually everything else.
With Mountain Bikes....the price is such that it's affordable for many, with some sacrifices, to ride a high-end bike that's up closer to that $8-10K mark, so people continue to buy them. MOST riders ride for fun....so performance is nice, but what's the actual goal of riding an XTR or XXX1 drivetrain, versus SLX or GX? Same for people with carbon eBikes with high-end components, vs AL ones with low/middle level components. Unless you're racing, it's really not necessary, YET PEOPLE can afford that luxury.
That's why the bike industry's prices have, and will continue to rise. It's one of those things that people who would LOVE to have the highest performance from everything they own, actually have the ability to OWN something that performs at the highest level.
@Trevor Bohns prices should have been creeping up. Pay for factory workers making the goods we use is more important than us having to pay more for our toys. Also, bike shop employee pay has finally gotten reasonable.
@@willbros1499 I see what you are saying (I'm pretty sure anyhow), but it is missing the point. When there is a recession, luxury spending is always what loses out in budgets first. People who have the money, will still buy their Lamborghinis and Paganis. What suffers the most is "average" consumer spending. So people buying Ford Mustangs, Honda CRF250s, and high-end to entry-level mountain bikes that us mountain bikers buy. They are not insulated from it in any regard, they will be hit hard and they will be hit early on.
@@compasteedee .... I don't profess to be an economist by any stretch. I think we're making the same point, just from a different angle. Many people view mountain biking as their form of exercise, as well as their hobby, and a way to relieve stress. I'm talking the avid bikers that are the core users. They will justify buying the best, when it's not necessarily needed. They can get every bit as good of a workout and as much fun on a lower-end $3K new bike, versus $8K. Bump that to $5K-12K for eBikes.
But....they "buy up," because it's a chance to own the best of something. So to think that people are going to stop spending money on high-end bikes....I don't think that at all. I think we'll see an overall lower volume of bikes being sold now that the COVID bubble has burst, but I don't expect the market dynamic to change much. COVID was an aberration, and most people knew that it wouldn't last at that level. Recreation didn't suddenly replace video games on the whole. People just wanted to get outside.
What I think will happen is people will hold onto their bikes a little longer than they used to, because of the uncertainty. That will cause a lull in bike sales, but I still don't think you'll see people on high-end carbon bikes drop back to a low level AL bike on their next purchase. They'll skimp elsewhere to justify having a high-end bike. Prices may drop a little, but I don't foresee mfr's adjusting them down thousands of dollars or anything on that scale, unless they have huge inventory issues and are willing to take a hit. "New riders" may buy a level down for their first bike, but with the proliferation of eBikes, that first bike average is probably already going up. Finding ways to produce lower cost eBikes will likely be coming soon, which will be the next "volume" opportunity for mfr.'s.
Who knows how it will play out, but I think with Specialized and Giant already showing some signs of pinching pennies, that's not anything positive...for sure.
I live in Taiwan about 10 minutes from Giant's largest factory, and I can confirm that they are panicking and have made quite a few layoffs. I work closely with Trek here in Taiwan and in the past Giant made most of their bikes, but as of recently, Trek has been making them in the States and shipping them out to Taiwan instead. That said, I live 20 minutes from Merida's HQ and factory, the same place where they make Specialized bikes, and I even talked with the next-in-line President who states that Merida has had a steady incline.
Something to point out as well, the main two competitors for city bikes in Asia are Giant and Merida. Recently Merida has started taking over, and the amount of trash Giant city bikes is building up. I'm sure the entire cycling industry will take a fall. Still, I'd say that is mainly due to the more prominent manufacturers such as Giant and the over production of city bikes in most of Asia and even Europe.
Surely there are no Trek factories in the USA except perhaps for very high end carbon fibre bikes for sponsorship teams probably if that. There are a few assembly plants in Europe I think to avoid EU tariffs but I've seen a huge amount of Trek bikes that have made in Cambodia or made in Vietnam (can't remember which one) which are countries that avoid EU tariffs. Made in Taiwan is seen as a badge of quality so what happens is bikes are imported from cheaper countries like mainland China, Thailand, Cambodia, Vietnam etc and then finished in Taiwan to get a fake 'Made in Taiwan' sticker. The chances of mass-market Trek bikes being made in the USA is surely zero. I don't know the tariff situation in the USA but if there are tariffs there could be basic assembly plants producing bikes for the US domestic market.
Merida like Giant are expensive too nowadays so lots of Specialized bikes are coming from factories like fuji-ta which are mainland China based and with factories in Vietnam and Cambodia. I suspect Merida bikes are reserved for high end Specialized bikes. You can blatantly see Specialized bikes being made on fuji-ta videos on youtube. Also going back to Trek many of their carbon fibre bikes are made by Quest Composites same as Canyon and both brands can be seen on the Quest Composites site, I personally think these are much inferior to Giant or Merida CF production. This is because Giant CF production is too expensive nowadays. I think the point is Trek and Specialized aren't really manufacturers they are buying production from Asian factories and just have smaller orders. It is a lot easy for them to deal with a downturn than Giant or Merida who have large factories and 1000s of employees to deal with. Trek and Specialized are basically importers and its a lot easier for them to adapt and cut costs and they can do this quickly. Giant and Merida have a much more difficult task ahead of them.
I don't know about overproduction but i still can't find a single full suspension mtb xl size in india with price around 2000dollars
@@hydraofmalice4097 Trinx?
@@michaelhayward7572 i just checked online and no they are not available. I am looking for full suspension. Any other suggestions
@@hydraofmalice4097 sorry dude, nada.
I feel bad for the bike shops that overpaid last year and are stuck with expensive inventory that they’re taking a loss on.
Just means they've overcharged leading up to this moment, wouldn't you agree ?
No, a container that was $2500 in 2020 was $15000 last year. Wholesale cost on an Alu gravel bike with 105 went from $900 to $1400
@@bobbybrandnew3277 That's a really stupid thing to say, wouldn't you agree?
@@bobbybrandnew3277 Bike shops barely make any money bud, can't accuse them of overcharging so long as they're selling at or below retail. Loads of bike shops will go out of business this year
@@scrumpoxjnr Because why?
I work in a bike shop in Australia, from what we've seen we've been getting excess stock arriving only now that was ordered over 18 months ago at much higher prices. Shipping and manufacturing delays have left us with an extremely large excess of bikes at a time where we really don't need them. To any consumer, hold off for a bit, the bikes will go on sale and you'll get a better deal. This will also help us as it will allow us to clear excess stock quicker and then hopefully after the "panic" stock has gone, the industry will hopefully return to normal.
Your were definitely on the money with this one. Just picked up a 22 giant stance 27.5 for $1,100 new.
The funny part is that the fox 36 is more expensive than my car suspension!
More expensive than a set of coillvers 😂😂😂
I live in Vancouver, Canada, and an LBS was selling at Santa Cruz e-bike for $18k. The industry or parts of it became delusional.
i live in vancouver too and private sellers here are crooks
Im in NZ and bike prices are stupid and emtb prices are forking ridiculos. I brought a new motorcycle instead for half the price of a new emtb. When my 2019 emtb dies i will be out of cycling with no regrets.
You would think I would keep up with this ...but I don't. I hope local bike shops still have a strong business going forward. The last few years of good labor and sales were a deserved boost after what has been decades of squeaking by. Many shops are staffed with good hearted people who sacrifice to make the jobs work for them. Best wishes for all in the New Year and beyond!
That's not been my experience. Most of the bike shop employees I have dealt with are either elitist snobs or pushy salespeople. They don't stock many parts and have to order them, which I can do myself for faster and cheaper. I try to support local businesses, but they make it hard for me to want to.
@@theymademepickaname1248 Being snobby or pushy is bad, but not all shops are like that. Each shop I've been to has its own unique culture: some good, some meh, and some toxic. And parts availability is really a separate issue from attitude problems. A single small LBS cannot remotely afford to stock the number of SKUs that a big online retailer can.
@@theymademepickaname1248 I can't say you are wrong....in fact, I bet many people would agree with you 100%. I've traveled to many bike shops and often was at events where a shop was donating mechanics for the day.
It very well could be that I met a certain breed of mechanic that formed my thoughts.
On a side note. The way there are car dealerships....and hundreds of independent auto mechanics....I see that as the future of bicycles. A very small percentage of factory dealerships so-to-speak, and many more generic repair shops.
Why bother representing a company when they sell customer direct like the EU model.
@@mattgies I'm not expecting them to have every conceivable part, but they don't even stock the basics. It's probably because they don't make any money off of them. They are only interested in selling you a new bike or overpriced labor.
@@theymademepickaname1248 As a bike shop employee, I am truly sorry for your experience. I always try to be as kind as possible.
But our store is quite small, so often we don't have many somewhat-common parts.
Very good points and thanks for putting this together for those of us that aren’t following this as closely!
Josh loving this type of content, not many others on YT discussing this important topic.
As with any overvalued industry, which cycling has definitely benefited from being, I'm happy to see a correction. The price for the same bike over the past three years has skyrocketed.
A new “standard” every year has been used to justify the increase of prices every year. News flash: you’ll be just as fast as the bike from a few years ago as you would be on a brand new 8K ride. It just won’t be as fun to look at.
Exactly, I am still rocking my 2015 full squish and my 2005 hardtail I use as a dirt jumper. Not planning on upgrading to a new bike anytime soon.
Thank you for keeping us all in the loop of what is going on out there.
There's an implication in this that Giant is somehow being "sneaky" or underhanded here, I don't see it. Giant for all intents and purposes IS the bike industry, and since they supply bikes and components for lots of other brands it would make sense that when there's an oversupply issue like now that they would have less demand for making those bikes. Any industry increases and decreases production naturally at different points, it's normal and part of any economic cycle. No company announces they expect lower sales in the upcoming year, it's not like they're excited about it. If the point is that the industry is slowing down, then I agree with it, but there was an extra implication in the message that Giant is hiding something. They're doing what every other industry is doing right now...Most folks who wanted a bike during the pandemic eventually got one or gave up, and now lots of folks have new expensive bikes that should last for a very long time. I expect things will get back to normal, not go away. I don't see doom and gloom here, we were in a boom cycle, now it's back to normal. I think the market for parts and accessories will do very well in the next few years as all those bikes will need them.
It’s been an over charged commodity for a while now. They are cutting supply so they can keep prices jacked up.
Great information! Cannot wait for the next article!
"Let's make bikes cost more than cars! This strategy has no downsides, we'll make record profits forever because bike buyers are all dentists and will pay whatever we want to charge!"
Maybe they wouldn’t have this issue if they weren’t charging $8000 for bike technology that is a decade old. Prices are absolutely ridiculous.
Great update.
We need more of this type of content. 👍🤙
Unrelated, but it's so great to see you getting figter and achieving your goals!!!
Honestly, it's not just looming potential recession. It's also the fact that the bike market is saturated. You had every Joe, Dick & Harry picking up an e-bike (and some regular bikes) due to covid lockdowns, etc. Now everyone's got a bike in their storage with lockdowns basically over, the Joe, Dick & Harry that bought those bikes ain't riding anymore, so no need to buy any new bikes.
Well, we knew that there was going to be a return to lower bike sales and a lot of good lightly used bicycles out there. What needs to happen is treat both your shops and customers well and most everyone will prosper. It really is that simple!
Excellent insight! Very very helpful information while I ponder orders/stock and such for the small bike shops I work with.
So this is the 3rd vid I've seen on this issue. Can't help but think of the frenzy that posts like this will generate. Great way to motivate those on the fence to pull the pin and buy. Almost like it might work.
As someone who made a good chunk of money buying and selling used bikes the last two years I can confirm that used sales are noticeably down already this year.
Not just the dealerships, the bike businesses were charging over what they were valued at, this is exactly what they get, now they can feel what the consumer felt.
As a bike mechanic in a local shop, I too I'm paying a lot of attention to this situation.
I'm glad Specialized and other companies are trying to find efficiencies to avoid a reactive move on down the line. Add to that, a lot of companies across industries added sub-par talent over the past few years during the crazy talent wars. A small layoff can mean a change in strategic direction and/or cutting lower performers. Either one, it makes sense. I continue to appreciate the great work Specialized has done and continues to do to serve the cycling community.
My local Specialized started their 25 percent sale earlier yesterday (official sale starts Jan 20th, according to the sales person).
Thank you for this
Times are tough for many people, and exorbitant bike prices create an even greater expanse as to whats affordable and what is not in the Budget.
Good video. I see things a bit differently. While I do think the industry is no longer in the pandemic bubble, things aren't necessarily so bleak. People are still buying bikes. The sport and the products offered are still awesome and the pandemic exposed piles of new riders to mountain biking - for some of those riders MTB was a pandemic distraction, but for many it helped them truly embrace a new activity.
Regarding the Specialized news, they tend to be a pretty ruthless operator - that has been their way of running business for a while. To hear about how many paid ambassadors they have, they may have been looking at the perceived ROI for those athletes and scrapping the program may have been an easier decision than analyzing each individual ambassador's effectiveness. Specialized did spend $15Million on a new facility this week too (I don't think that seems like an overly worried businesses' action).
As for Giant's actions: during the pandemic suppliers through the entire chain became extremely demanding: like asking their customers to prepay for product rather than having payment terms. I suspect Giant is trying to force those suppliers back to pre-pandemic payment terms (big companies, especially in Asia tend to push very hard for extended payment terms). Giant is a public company, are very smart, and not about to have their financials look bad due to a supplier's payment policy.
The industry is realizing the craziness of the pandemic is over, and it does bring challenges. Those challenges largely relate to an industry that had learned to run extremely lean (minimal excess inventory) over the previous decade and is now being faced with too much inventory for their logistics to keep up with. I really see this as a frustration for the big bike brands, not a catastrophe. Some smaller brands will get flattened because retailers and consumers can go back to being very picky about the brands they want. There will be some discounting (a good thing to help reduce inflation) but don't expect to see 50% off as a common practice - more like 10% to 20% off on select models.
On a positive note, I think the incredible popularity of cycling during the pandemic helped open more eyes to cycling within government & land managers. I think this will help the development of more trails.
Buying a $15m facility might not be as bright of a sign as it seems. A business moves because there is either significant opportunity elsewhere, or the current location is inhibiting them (usually a combination of both) if they sell their current facility for a significant amount more than what they purchased for, it looks good on the books for them; and property in California is a lot more valuable than property in Colorado. And I'm willing to bet, a Colorado municipality is going to be offering a fairly favorable deal through taxation and other benefits for them to set up shop in town.
People are buying bikes at the moment, but when bad news hits, the average consumer will be very quick to batten down the hatches, and what isn't a problem right now, could be a problem tomorrow. Consumer luxury spending is the first casualty in a recession, and mountain bikes/road bikes/gravel bikes are a luxury, not a necessity to the vast majority who possess them.
I hope the mega brands get punished for the greedy and arrogant way they're behaving against the customer base. They've ruthlessly jammed a lot of sketchy stuff at us because they thought they could and now it's time to pay for that.
Spending more on propaganda to convince everyone they need a "new improved" bike, one that's actually worse for the riders, that doesn't create much respect, though it did probably make some short term profits..but what, when these spiffy fragile complex and very expensive "new improved" bikes get a few years old and start to cause lottsa down time I doubt the newbies will buy into another..."this bike is 10% more aero and these wheels roll with 10% less resistance and this new 25sp is 10% better, and this new bike might be available to you, for only $xx,xxx if you pay upfront"
@@dhanso928 I don't see the way the bike brands behaved the same way as you. We all have exposure to different things though. Compared to some other industries (like lumber, grocery & cars) I think, for the most part, bike brands weren't doing more than pricing and spec'ing to reflect costs and availability. Prices on bikes reflected shipping, material and sup-component prices. While the bike companies did post record sales and profits, I think that largely reflected the fact that everything they made sold instantly and for 2 full model years they had no inventory to manage.
@bike Bros Spot on with your comments.
If prices double (as they have for most things in the past decade), then those prices do indeed need to fall something near 50%. Don't forget, a significant portion of the population is fixed income seniors on a pension. I'm one of them, and I want an affordable mid-to-high end bike that matches my income that has been fixed since 15 years ago. Right now, I'm buying nothing, prices went too high.
The size of this senior demographic as a percent of total is the largest it's ever been in this country, so it greatly impacts the sales of a lot of things.
Not a big surprise. Business is always going to have ups and downs just the nature of the beast. When will the public start seeing it impact pricing? I keep hearing about warehouses stocked. Let's get them out there!
Yeah I been waiting for the last year for the cheap stuff!!
Saw this coming a mile away, just thought it was gonna be sooner. I sold three old 1990's bikes I couldn't sell for the life of me like hot cakes. Trails had tons of people, that fell off a cliff Long ago.
very informative 👌
May I add, I feel sorry for bike shops, they didn't have bikes when needed and now they have bikes and no customers. Maybe bike companies should have invested more in their best friends not useless ambassadors mooching off. Best to all of the bike shop owners.
Everyone bought a bike during the pandemic, the industry geared up to meet the temporary demand. They were quick enough to raise prices to scalp the customers, Now the adjustment. Bike prices are silly, components even worse. No one will pay that now with an oversupplied market. Not to mention a possible economic downturn on the way.....
I know Ty. We used to ride and build bmx trails(dirt jumps) around the foothills of Los Angeles.
I do appreciate your efforts to give us this information and keeping us posted of what’s going on. 🤙
Interesting stuff, thanks for making the video and reporting on it. The covid bike boom was fascinating for me to watch as a consumer. I sort of understand why it happened in hindsight but it's not something I would have predicted.
I appreciate this type of content a lot keep it up . See you at SMMTB
Waiting eagerly for the deep discounts!
Very good info! I work at a trek store an the just cut everyone's hours with no overtime
Sorry to hear that, not good :(
Quick, informative, and finishes by saying "go outside"? Subscribed.
I’ve been scratching my head during the whole covid period when manufacturers are paying influencers on IG, FB, and YT and there was no over $1k inventory in shops. Why do that??
Wow interesting times these past few years. I’ve been wondering when this was gonna happen, I being a moto and mtb guy thought this was gonna happen a year ago. Interesting how things play out. Good job!
One other interesting thing I see is that racing moto at a amateur national level has never had more turnout. The national races are filling most classes in days. I guess the die hards are still in it pretty hard, who knows
You know what I'm seeing. A lot of people who thought they were mountain bikers in 2021 now want to sell. Bikes of all prices. New sales are going to be rough with so much excess building with all that inventory hoarding on top of all the used sales. Let's remember in 2019 backcountry used to sell end-of-year frames 30-40% off. In my eyes things look considerably worse for a bike store next year than pre covid
I've been custom-building and servicing high-end MTB my entire career (18 years). 2020 was great, but even '21 and '22 were still tough unless you could actually get bikes. I had '23 pegged from the beginning of covid as the earliest point that we will really know where we stand. Shops that aren't primarily focused on high-performance service work that makes a bike run perfectly will continue to struggle. We've hit market saturation and consumer fatigue. The bikes are more capable than most folks can make use of. The tech is as complex as most people want to deal with. The quality (for the most part) is good enough that most bikes/parts aren't randomly failing any more. A consumer can buy a good bike (GX or higher) and just service it every year, and it will continue to run very well. I regularly perform $1K service jobs, but the bike is flawless and that's WAY cheaper than a new one. The gains in new bikes will continue to shrink, because the geometry and suspension is beginning to plateau. The main thing they can compete on now is details, frame protection, serviceability, refinement, etc. The big jumps are over, we've found the limits of wheel size, reach, wheelbase, travel, etc. There are now bikes that are big/long/slack enough to accommodate nearly any consumer on the planet. The corporate brands will have to go back to competing on value, and the little guys will only make it if they are doing something truly special/unique. Shops that are only focused on sales will get squeezed tighter and tighter as the demand drops. Meanwhile, direct-to-consumer brands and online parts sites continue to duke it out to the lowest possible margin, shrinking the amount available to pay a decent wage (wages come from margins), making it harder in general for the industry to attract capable, long-term employees. '23 will be a massive shake up and I expect to see big changes as everyone tries to figure out how we are all going to coexist.
Same, I knew in 2020 this was gonna be an issue.
Well, prices of bikes like specialized, trek or giant are currently so high I'm not even surprised.
True, I put one of my bikes up for sale with high quality upgrades for a really cheap price, 1,000$ less than what others are selling the same bike with stock component’s and It hasn’t sold in 2 months so I decided to just keep it
Stanton Bikes in the UK (smallish company selling steel and ti bikes) went into administration recently as their investors got cold feet.
I guess this isn’t a coincidence.
They're just down the road from me, it's a real shame as they are a good little company that seemed to be doing well. Great bikes too.
bike sales fell off a cliff, it is dire, shops were expecting the faucet to be turned down, but not off completely... support your local bike shops they are all hurting right now, plenty of good deals to be had!
unfortunately those good deals usually don't help the bike shop much outside of moving product. Rather, the brand makes their profit and the shop barely makes any margin on the bike. It's not the same for all bikes in all price categories, but it's like that for the most part. Hopefully some value comes back to the market. It's been an interesting few years and it's about time for prices to match value.
Figured there had to be a breaking point; prices can’t keep going up forever if incomes aren’t.
My wife and I just had our giant hybrid bikes fully serviced and some accessories added at Martins bike shop in ephrata, pa. We bought our bikes there in 2009. These bikes have been excellent for us. We looked at buying new bikes similar to our old one's-but we are considering getting ebikes as our knees become less able to take the wear and tear of riding.we are 64 and 63 and still in good shape for biking.our bikes are the cypress dx model (2009). Martin's has added a gigantic new building and test ride area that is really impressive and they have every imaginable type of bike and many ebikes to choose from. Their service area and parts inventory is large and well organized. I cannot imagine that there are many bike shops in the country that can offer more than this bike shop !! If you are a bike enthusiast, this store is certainly worth a visit !!! They have always been accommodating to our needs.
From my reading, after Covid struck in 2000 a lot of ppl started cycling to avoid public transport, etc. Plus, many people started riding recreationally. Here in the Bay Area on weekends, I’d see hundreds of newbie riders, sometimes whole families, in the local hills. The bike dealers couldn’t keep anything in stock, and new models were backordered for months. Naturally, the industry concluded it had been presented with a vast new market and geared up accordingly.
This went on in other places too, like the United Kingdom. So many people started riding to work, then-PM Boris Johnson announced a $2B program to facilitate cycling in the largest cities.
But less than a year later, with the reductions in Covid restrictions, it was noticed that ridership was experiencing a huge downturn. And that has continued to this day. (Acting on complains from car commuters, the U.K. has begun dismantling the newly constructed bicycle lanes in London and other major cities.)
I can say for a fact, the number of recreational riders in East Bay hills is no higher than it was before the pandemic.
Why the big drop-off? Some cite the rise in cycling fatalities, and how dangerous new riders found the roads to be. While I think that is partly true, I think the greater cause is how unfamiliar present-day Americans are with exertion, discomfort, getting sweaty, looking up at a long hill and feeling their heart sink. We are not talking about the Peleton crowd here, but having said that, their numbers too are in decline.
Maybe the only winner to come out of all this is the e-bike. And I’m all for it if it can extend the riding career of an individual. But going by what I’ve seen in recent years, the pandemic was a blip that stimulated cycling for a short while, but the addiction our society has acquired to staring at screens for hours on end, before and after work, has resulted in a lifestyle even more sedentary than it was in the 50s and 60s. And that is a sad thing for all of us, not just the industry.
I’m a boomer, an old geezer, but still I ride four times a week. But the riders I’m seeing around me are getting more and more middle aged. Where is the next generation? The only bright spot on the scene now is the rise in young women riding sport bikes at serious velocities on the local back roads, and often solo. Some of them are kind enough to say hi as they pass me.
Specialized did a huge sale in Fall 22. Got my son's bike for 40% off. That tells me they had way too much inventory.
Used bike markets are getting flooded with “getting rid of bike that I got during lockdown…no time to ride now as things are getting back to the previous normal” This is driving depreciation in the new and used market.
The new 2023 Nissan Versa costs $15k, the new 2023 Chevrolet Spark costs $14k. A bike that costs $15k-$16k is laughable. So, now there is more technology, engineering and manufacturing cost on a bike than on a car??? The bike industry has been scamming for so long!
You have to compare production efficiencies. Cars are faster to make on assembly lines than laying up carbon fiber by manual slow labor. There are many ways people can discuss this topic.
saw 2 of my local bike store get bought and now they are GIANT stores
Just got a list of about 25 models that are on sale at the shop now. Things are going to ramp up quick.
So many companies thought the lockdown booms would never end. Such a shame some were so shortsighted. Added to that the fact that influencers just don't make brands any money, these things were bound to happen.
Great content,planning on buying new mountain bikes for my son and I,guess we should wait a little and see what happens,maybe save some money.
Bike companies whine about "decreased demand" when most bikes are always out of stock, and they've jacked the prices up 20 percent over the last couple years. They deserve this.
Great article. Might want to buy a spider for your mic, the shaking of your table is audible because your mic is connected to your arm directly.
My local Trek shop just cut all the fat with staffing. If you're not working 3 days+ a week you got cut. To be fair, we had a bunch that worked a day a month to keep their discounts.
Great video! Really showing what is about to happen to the economy in 2023 from the bike manufacturing perspective. It pretty much shows the economy is preparing for sinking.
I'm wanting to upgrade to a Trek Fuel ex 5 soon. I hope this helps me out in a few months.
i will say, i did not see the bike shops with the Christmas inventory like in the passed. i'm still going to need parts. just trying to find spokes is now a pain in the wheel.
Well I am going to let out something I thought for I while... paying $5-7k (and more!) for a semi-professional bike and know that some of the profit goes to fund a college drop off guy/gal doing the van-life "working" making videos and "testing" equipment that has been given to them so they can advertise it (bit of a conflict of interest there you 🙈?). This while I am stuck at work and barely can ride during the weekend paying off or saving for that holy grail bike. Get real, it wasn't not sustainable, it was a joke and a spit in the face to the majority or regular people that love the sport. Sorry for the rant but it was long due.
People decided to stop buying bikes because of how expensive they got. A bike I paid 2k before pandemic was 5k. I decided to not buy until they return to prepandemic prices.
Well the Specialized thing might explain why suddenly Heather Munive is back on a Giant out of the blue. She was sponsored by Specialized if I recall.
I’m curious about how I should navigate as a consumer. I’m looking to get back into cycling, actually looking to get a mountain bike and a road bike. How do you think this is going to play out? Will there be good deals on bikes and I need to hold off? Or will they keep prices the same and just reduce inventory, making it harder to find bikes? Thanks for any tips on whether I should buy now or wait.
If you enjoy cycling, saving a few hundred dollars is not worth a long wait. A good bike can last over ten years with minor part changes. If you buy a bike without doing research and testing the bike in person, you may not like the bike, and that would not be any savings at all. If the bike you like is not available, there is not much you can do about it.
Well I'll just save up for something nice this summer. Thanks
The price of new bikes and parts have been skyrocketing the last couple of years. If those greedy manufacturers want to clear the inventories, how about consider dropping the price? The party is over.
So after giving up on getting a bike during COVID shortages I started looking again for a gravel bike. I don’t race, I ride for fun, so I don’t need a high end carbon frame. However I would like my bike to have a nicer component set. Seems like most of the big guys (trek, giant, specialized, etc) are trying to push everyone into high priced carbon fiber frames. Salsa doesn’t even offer an aluminum warbird anymore. To be honest it’s a big turnoff to see brands pushing you towards their carbon frames that start at 3500 to 4K And up. I just want a high spec aluminum bike! During COVID they must have been able to get people to pay whatever they asked.
Bike manufacturers want you to believe you can't do jack crap on a bike without spending $5,000.00.
i actually just had a friend become an ambassador for specialized. Nice carbon stumpjumper with axs
Yup, just more companies experiencing production / climate ( no not in the weather) changes. How will each of them adapt. I wonder how many ramped up during Pandemic, and now things have slowed, pandemic / lockups over, are now over staff/over supplied?
When do you think its a good time to buy a new Specialized bike? With how the bike industry is going, and new 2023 models potentially coming out?
He has absolutely no idea when the best time will be to buy a new Specialized bike.
Excellent share.
What e-bike direct consumer should I buy ? On emtb?
Josh in regards to the big S cutting their workforce. If I remember correctly a lot of these brands also brought on a lot of talent and ambassadors during the pandemic. Not to ruin the excitement and drama of the industry but nothing crazy or out of the ordinary is happening, at least nothing like the pandemic. Let’s not forget that these companies or the whole industry ramped up manufacturing as well. The way I see it everything is just settling down.
"Extending invoicing period... endure this off-season together" That about the same as going to the bakery this winter and asking is it is okay to pay in march. We all get that manufacturers have to balance their staff and sales, but these large scale layoff rounds can potentially hurt more, by giving certain companies a bad reputation. I wouldn't be suprised if Specialized even went so far to push their 'old' employees to post 'thank you' stories on for instance Linkedin...
I think you're bang on!
Prices here in the UK are ridiculous! In April of 2022 I purchased a Titus Road Runner endurance bike from Planet X. 9 months later, that bike has had a price increase of £620! My carbon gravel bike has also seen a price increase of £600 in 17 months!
I personally think they're trying to claw as much money in as they can, before everything really goes 'tits up'?
The greed displayed by the bike industry is quite shocking!
The idiocy displayed by someone buying a carbon gravel bike is even more shocking.
@@johntechwriter And the idiocy of someone writing such crap is even more shocking! 😁
I would say something sinister is going on with Giant or Specialized. They're just getting things back to normal after an insane 18-24 months. What's happening shouldn't surprise anybody to be honest.
I have a group focused on used MTB gear on facebook. Things are getting back to normal there too. I had a guy sell a 2018 Yeti SB5.5, last spring, for 5300.00. I sold mine in October and got 3,400- same bike.
What I'm personally having an issue with is parts availability. When i say that, I mean if I want it NOW, its almost impossible for me to go to the 3 major LBS's (Trek, Specialized and one retailer with 4 locations in Denver) near my house and ge tthem. In the last 3 months this is what I looked for and couldn't find locally: 42CM drop bar, 40t chainring, 11x42 cassette , BB30 Bottom Bracket, and various tool parts. 2 or 3 years ago, i had no issue finding these sort of parts at the LBS. Now, I cant.
I've been waiting for 24 months for bike prices to become normal, 2020-2022 they inflated prices twice, and now no one wants to buy it, and so do I.
Thank you for the valuable info. Bike industry obviously does not seem to be a good place to invest in at the moment. You are cutting it as a finance youtuber as well :)
There have been some crazy deals for sub $500 bikes. Some were 50% off! But don’t expect the same thing for more higher priced bikes.
The recession is gonna hit hard this year
Also a part of this phenomenon is the fact that Nuke Proof and Vitus are on their own shipping and selling bikes in the US as opposed through importers.
I worked at Specialized in Morgan Hill. They are famous and consistent with large layoffs. They over-hire when the company is doing great but when sales are bad for an extended period of time everyone working there knows whats going to happen next. I know because it happened to me. They target and fire older and high salary employees first.
Serves them right they got to greedy. Following the mobile phone industry model, incremental changes yearly to make your bike falsely absolete.
The manufacturers need to go back to 4 to 6 year model cycles. STOP solving problems that don't exist. My 2015 Gaint trance 2 is still a hell of a bike and my 2005 Brodie Hellion hard tail with a factory spring 130 travel fork is still used at the bike park as a jumper as it had progressive Geo back then that most manufacturers started to adapt in the early 2010s.
I am not going to shed one tear if some of these manufacturers go bankrupt. They did it to themselves, and they decided to forget about the average rider and average income maker. They started to focus on the upper middle class consumer bracket, and all manufacturers started to price their bikes like Santa Cruz and Yeti. The two most overrated and overhyped brands in the industry.
Before, everyone yells that's free capitalism. It is, but free capitalism regulates itself. The consumers eventually regulate the market by going with a brand that offers the best doller value. I can see brands like Vitus, RDS, and YT eventually taking over as direct to consumer brands that offer the best Bang for the buck. Leaving the big manufacturers to scramble and modify there business model if they want to survive.
I am sorry, no mountain bike should never cost more then a used car, or a top of the line Dirt Bike, or an entry Motorcycle.
Couldn`t agree more , the price of bikes has gone stupid over the last few years , saying that prices don`t seem to be coming down too much here in the UK . Bikes costing more than a quality second hand car
Yep!, nice comment Peter and I agree 100%.
@Anthony Dilworth here in Canada, they haven't gone down at all. Used market is still stupid, and used bikes still trying to be priced as almost new. Shops still not offering any decent discounts. It seems that the price redux is only in the USA as they have close to 400 million if not more now in population. UK and Canadian non department store bike consumer population is but a fraction what it is the the US.
@@PeterCPRail8748 In the US, there are some things on discount, but for the most part everything else is still priced the same. I work for one of my LBS and it's going to be tough. The bigger companies will be fine, as they can take a hit, but a lot of these small shops will struggle or even go under.
I 100% agree with you on longer model cycles. It's exhausting trying to keep up with all the minute changes that are brought on from generation to generation. We can only go so far with geometry and wheel sizes. A good rider can shred on almost any bike, but a novice or poor rider is not going to shred because they hopped on a Santa Cruz out of nowhere.
It'd be nice if the whole industry did a better job at catering to the next generation of riders. Right now, they are kids..and there's lots of them. A kid doesn't buy that bike. Their mom or dad does. There's no reason to isolate this sport to all the rich kids.
@Joseph Tuck it got to the point with this bullshit tech crap that now SRAM is scaming us with a universal derailuer hanger on there new groups sets. Hello that was a standered in the 80s and 90s and department store brands had universals for decades now. F ing joke at this point. Are we going to get a mtb bike soon, that all we have to do is strap on and it will do everything for us, we just sit along for the ride.
Well said by the way. I agree 100%
I hope this causes the price of electric bikes to drop. However, I do think the demand fr electric bikes is still high as they are a fairly new product in high demand. Maybe some smart marketer will pick up some of these surplus inventory bikes and couple them with kits to turn them into electric bikes.
Been riding my Giant 18 years now and would not mind seeing prices come down a little, or a lot.
8% layoffs. I wonder what % of new hires came the last couple years. Is staffing simply back to pre shut down levels?
If the end result is that there will be a price drop . . . I can't say that's really a bad thing for most of us. I had a Specialized Epic that I sold and haven't replaced yet. Since summer is still a. good five months off in the Americas, I'll see if an oversupply ends up working in my favor.
Some of the issues we are seeing is the rebound of the supply chain. It’s truly a weird market. The economy is “trying” really hard to have a recession, but demand is still quite high for hard goods. In late 2021 and in early to mid 2022 Raw materials and electronic parts had long lead times. Toward the end of 2022 you saw a lot of backorders filled. Cars started being delivered again as well. There’s a lot of inventory now, but I think it’s short lived. We’ll see what happens
@Mario Reyes especially how long it’s being drawn out. 2008/2009 was short. It rebounded rather well. It was a clean wound, rather easy to stitch up and heal. The gaping oozing wound that’s going on the last few years will take time to heal