Where Have All The New Bikes Gone To?

(Answer: not to your local bike shop!)

By Chris Kostman

Originally published in California Bicyclist, August, 1990

There's a bike backlog problem in the industry today that's making it all but impossible to buy many of the latest popular models. This may not even be news to you. Perhaps you finally decided which brand and model was right for you, then was told by your local dealer that you'd have to leave a hefty deposit and add your name to a waiting list. Then maybe two or three months later you'd get the call that your bike of choice was ready.

Sound ridiculous? It may be, but it it's entirely common nowadays. In fact, dealers nationwide are often receiving only half of the bikes which they had ordered, and it's not uncommon for the bikes to arrive two to six months late as well. A case in point: Mike Jacoubowsky of Chain Reaction Bicycles in Redwood City, CA states "I could sell 50 Trek 2300's this year, but I'll be lucky to get twenty of them. Plus I have fourteen other bikes on order for customers with no known arrival dates." The carbon fiber, Ultegra equipped, 2300 is only one popular example of the crisis, as fully half of Trek's 25 models are in short supply. Trek is no exception to the rule, however, for essentially every major manufacturer from Diamond Back to Schwinn is in the same predicament.

So why the bike shortage? Simply put, the component manufacturers can't keep up with the demand for their hardware. Shimano claims 60% of the world bicycle component market, with an astronomical 20 million derailleur sets in the works for 1990, and they are unable to keep up with component orders from bicycle manufacturers. "We're producing at 100% capacity, but demand is still definitely outstripping supply," says Shimano Technical Representative Karl Jackson. Shimano has even slashed employee vacation time and is opening new production facilities in an effort to keep production abreast with demand. All the major manufacturers are experiencing some difficulty in aquiring Shimano hardware, but some companies are in an even tougher plight. Companies that order complete Shimano component groups receive priority, but those who order incomplete groups, perhaps so they can spec Gripshifters, a Specialized crank, or a Ritchey headset, receive low priority and a 10% surcharge on their entire parts order.

1987 was a banner year for bike sales in the States, with 12.6 million new bikes hitting the streets and trails. Unfortunately, this was followed by a slump year with only 9.9 million bikes sold in 1988. In '89 sales were once again on the upswing, with 10.7 million bikes sold, but component and frame manufacturers, as well as dealers, are still being cautious after the major drop in '88. Dealers used to attend their trade shows in January, but now the shows are in the early Fall each year and the dealers must place their orders for the next year six to eight months in advance. Manufacturers then base much of their production runs on the figures generated by these dealers' orders. Noone in the industry can afford to tie up a lot of cash in overhead which might end up sitting on the showroom floor or in warehouses for an indeterminate amount of time. Thus, with the whole industry reeling after '88 and the dealers now being forced to forecast their sales a year in advance, everyone is being cautious. The end result is that their are not enough bikes to go around.

So if Shimano is manufacturing 20 million derailleur sets in 1990, where are the bikes going to which these components will be mounted? In a word: overseas. The market for bicycles, especially for American brand mountain bikes, is exploding in Europe and Japan. If the industry was cautious on their sales forecasts stateside, then it was downright clueless on their forecasts for overseas. Here in the States, the growing popularity of mountain bikes has been an easy market trend to follow: in '86, 6.1 million road bikes and 1.5 million mountain bikes were sold, but by '89 this had flip-flopped to 3.4 million road bikes and 3.5 million mountain bikes. In fact, in pro shops from coast to coast mountain bikes are accounting for 65 to 80% of total bicycle sales. It took Europe longer to catch onto this trend, but now thanks in part to the hype and media associated with the very succesful Grundig World Cup ATB race series and an official UCI sanctioned World Championship event, the off-road market is skyrocketing faster in Europe than here in the States. No one forecasted this rate of sales overseas and so manufacturers are being forced to dip into their reserves normally allocated to the States and ship them to Europe.

In Japan another product availability war is being waged. Japanese bicycle manufacturers have been slow to jump on the ATB band wagon and thus are not in the high priority category with Shimano. So in order to fill the demand for ATBs the industry has taken to importing greater numbers of foreign ATBs to fill the demand. As in Europe, the most popular models are the American brand names and so the Japanese industry is going to great lengths in trying to secure quantities of the mountain bikes. Various manufacturers, assemblers, parts wholesalers, and others are engaged in stiff competition for the importing rights to the American bicycles. So, in an unlikely and quite ironic turn of events, the Japanese are importing American bicycles (manufactured in the US and Taiwan), eqipped largely with Japanese made Shimano components, because their own manufacturers are not able to secure the necessary componentry for their own bikes. Hence imports are up considerably in Japan and exports are down by 20%. Meanwhile, back in the States, quality bikes become even harder for the consumer to aquire.

Unfortunately no immediate solution to this bike availability problem is in sight. Once Shimano and other companies complete implementation of various methods of increasing output and efficiency, bike availability should increase. In the meantime, the consumers will have to wait and get their deposits on file sooner or buy an alternative to the most popular models. Believe it or not, there are still excellent value quality bikes available which come equipped with something other than the standard "choice" of components and perhaps their sales figures will soon be on the increase. By buying one such bicycle, the consumer could avoid the wait and have a more unusual bike than the average mono-grouppo look-alike bikes which have achieved such heights of popularity and unavailability in the marketplace today. At any rate, it's a great sign that the bicycle industry is experiencing such a boom; it can only help our collective fitness level, economic strength, and environmental well-being.