Domestic Bike Shipments for 2015 Look Set To Total 7.9 Million Bikes
In 2015, all the industry talked about was the fact that light cycles were not selling. Despite pronouncements by the government that the economy had shifted to a positive growth cycle, the industry continues to be mired in stagnation. In actuality, shipments of bicycles to the domestic market through November 2015 were down 8.5% compared to the same period a year earlier, at 7.39 million bikes, increasing the likelihood that the total figure for the year would come out at 7.9 million. Building on that negative image, 2016 started off with tumbling share prices, a high yen and a succession of other anxiety-provoking factors. Given that last year’s cooling down is expected to continue this year, it will be crucial for manufacturers to come up with epoch-making products, clear concepts and other means for getting the economy turned around and headed in a positive direction.
According to statistics for bicycle production, imports and exports provided by the Japan Bicycle Promotion Institute, shipments of bikes to the domestic market (domestic production and imports combined) in 2015 fell 8.5% during January through November compared to the same period a year earlier, totaling 7,390,829 bikes. If the trend continues at the current pace, the final figure for the year will likely come out at around 7.9 million bikes. The numbers for the last five years were as follows: in 2011, 10,552,258 bikes; in 2012, 9,511,758 bikes; in 2013, 8,898,349 bikes; and in 2014, 8,685,912 bikes (see table). Thus, 2015, with a predicted outcome of less than 8 million bikes, will be the lowest figure in the sequence. In terms of domestic production, 1,101,666 bikes were produced domestically in 2011, followed by 1,012,314 bikes in 2012, 965,954 bikes in 2013, and 951,548 bikes in 2014. Since 2013, domestic production has consistently failed to reach the level of 1 million bikes, and for 2015 as well, with production at 823,000 bikes as of November, that trend will only intensify, with a final figure of less than 900,000 bikes for the year.
Breaking down domestic production by type, electric power-assist bikes ranked right up there with sports bikes as commodities holding out high hopes for stores. In 2011, production of these bikes amounted to 403,208 bikes, followed by 383,196 bikes in 2012, 443,782 in 2013, and 479,404 in 2014. Thus, reduction had been hovering just short of 500,000 bikes. In 2015, however, production stood at 426,795 bikes for January through November, meaning that the total for the year will probably fall below that of the previous year.
One factor driving this pattern of falling numbers in successive years is an increase in prices caused by depreciation of the yen. That has caused a plunge in sales of light cycles as customers hold back from spending money. More and more stores are saying that even when there are successive holidays, which are usually moneymaking opportunities for sellers, they are finding it impossible to sustain sales. In addition, the prices of light cycles have been falling sharply. In responses to a questionnaire distributed by Cycle Press to leading stores (see page P36-37), many stores that focus heavily on light cycles said that fewer and fewer children want high-priced bikes for riding to school, and instead buy run-of-the-mill bicycles, resulting in lower unit selling prices and reduced profits. Others said that there are a number of factors behind the downturn in sales, but that there has been an obvious change in the direction of low unit prices. These and other responses highlighted the new emergence of light cycles.
Other responses included, “Demand for bikes for riding to school has been shifting to light cycles, but only a limited number of types have moved in to fill that demand, one of which has been sports bikes, including entry-level sports bikes” and “Sales of road bikes are the highest they’ve ever been, with an obvious increase in the number of people buying high-grade models such as models with carbon frames.” High-priced commodities such as sports bikes are selling very well; Shimano Sales, for example, expects 2015 sales of sports bikes to reach 630,000 bikes, a year-on-year increase of 105%. A store in a more regional market, however, said, “Definitely, sports bikes sales grew in central areas, but in regional markets, we don’t have sales strength grounded in volume and quality; conversely, we sell more bikes of dubious quality, meaning cheaply-priced models such as entry-level models, and sales are hardly worth the time that we put into servicing and adjusting these bikes. Lately, the commercial scene is being disrupted by stores that are being opened with capital from outside the prefecture.”
Asahi Accelerates Expansion of Stores Dedicated to Sports Bikes
Amidst this situation, Asahi, a frontrunner among retailers, currently has a total of 419 stores nationwide in its Cycle Base Asahi chain, but has been transforming stores into dedicated bicycle stores almost on a monthly basis, and is beefing up its sales of sports bikes. The company is also working to boost sales of bikes for toddlers, and last November launched the “Innovation Factory”, a line of bikes for children and junior riders that can be customized based on the user’s preference. Asahi has begun selling the bikes nationwide, both through Cycle Base Asahi stores and on the Internet.
In another move, Asahi is giving a year’s worth of its original “Cycle Partner” bicycle insurance free to people who purchase a bicycle at one of its own stores between January 9 and April 10 of this year. The firm is not the only bicycle company active on the bicycle insurance front; Bridgestone Cycle is offering six months’ worth of accident insurance free to those who purchase the “Albelt”, while Miyata Cycle began a new program on December 1 of last year under which the company will provide compensation of up to 100 million yen to people injured in an accident involving a Miyata bike. The move is aimed at reassuring purchasers of its products, so that they can relax and enjoy riding.
Another spotlight is on Internet sales. Stores that responded to our questionnaire said that even customers from their own stores are buying bicycles, parts and accessories on the Internet. Ateam Inc., located in Nagoya City, Aichi Prefecture, handles a broad variety of bikes ranging from toddlers’ bikes to sports bikes and electric power-assist bicycles, and promotes its products through television commercials. The company manages a website called “cyma”, through which it sells bicycles, and is discounting its normal cyma prices by up to 5,300 yen for customers who purchase during an event called the Bridgestone Fair, held from January 20 to February 20 this year. As illustrated by these promotions, Internet sales are likely to impact retail stores even harder in the future. Incidentally, the industry is beginning to see cases in which overseas Internet sites such as Wiggle of the UK are importing commodities from Japan, spurred perhaps by the high level of the yen.