By Mathias Heller

The mood in the European bicycle industry is poor. After the boom years of 2021/2022 with exorbitant growth rates, manufacturers are now in crisis due to high inventory levels, increased costs, and discount wars. In 2023, the sales of non-motorized bicycles and e-bikes in Germany dropped by 13 percent compared to the previous year. Although the demand for e-bikes remains relatively stable, the market recovery is taking longer than expected, and banks are no longer willing to provide further loans. The ongoing pressure could lead to more bankruptcies if manufacturers do not respond promptly. In a recent study by Roland Berger in collaboration with the pressedienst-fahrrad, 34 executives from bicycle manufacturers in the DACH region were surveyed about the current and future developments, and six managing directors and industry insiders were interviewed from mid-July to mid-August 2024.

E-bikes remain trendy

In 2023, a total of 2.1 million e-bikes were sold in Germany. Bicycle sales in Europe are expected to stagnate at just over 15 million units per year in the medium term, but the market remains intact.

In addition to the sustained demand for e-bikes, driven by leasing models and tax incentives, technological advancements such as lighter batteries with greater range and improved motor technology will further enhance the attractiveness of e-bikes. Furthermore, political efforts are underway to promote the use of bicycles as part of sustainable mobility and the transition of transport.

King is: Cash and Professionalization

The respondents agree: This year and in 2025, it will remain difficult for bicycle manufacturers. Consumer sentiment is still clouded by uncertainties such as high inflation, weak economic conditions, and political upheaval. Quick action is therefore necessary to prevent revenues and profits from declining further. Ensuring liquidity is the top priority, such as through reducing inventory and fixed costs as well as optimizing working capital. Equally important is the establishment of professional processes and planning systems to respond more quickly and flexibly to market changes.

In addition to the current operational challenges requiring swift and consistent action, the industry as a whole must align itself more sustainably to be successful in the long term.

Success factors for resilient business models

1. Optimization of the product portfolio
   Streamlining the product portfolio reduces complexity in demand planning, purchasing, and product management, thereby improving working capital.
2. Reduction of novelties and customer centricity
   A limited number of new products eases the burden on both the organization and financial resources. Overall, manufacturers must work more customer-centric and align product management clearly with customer needs.
3. Reduction of dependencies
   Diversifying the supplier base helps reduce dependencies on component manufacturers with significant market power and makes supply chains more flexible.
4. Strengthening the brand
   In the high-priced segment of e-bikes, a strong brand is essential to differentiate from the competition.
5. Review of the strategy
   The changed market environment also requires a review and possibly adjustment of the strategy, whether regarding distribution channels (B2B vs. D2C) or brand positioning (full-range provider vs. niche provider) and market coverage (local, regional, global).

The crisis can also be an opportunity

The new reality forces the industry to act. If manufacturers want to be successful in the future, they must become overall more flexible and respond more quickly to new conditions. Nonetheless, internal optimizations remain essential to survive in these volatile times.

But in any case, it holds true: With the right strategy, the current crisis can be an opportunity!