After a record year in 2022, Shimano, like the rest of the bicycle industry, appears to have faced severe headwinds in 2023, with double-digit declines in both sales and profits.

Shimano revealed that sales of bicycle components in the first half of 2023 fell 17.7% from the first half of last year. The brand's bicycle division's sales fell to 205 billion yen (approx. 1.1 billion pounds), while operating income also fell 39.5% to 42 billion yen (approx. 230 million pounds).

The brand's fishing components fared somewhat better, but Shimano shares on the Tokyo stock market fell 3.8% on Wednesday, rebounding after falling as much as 5.8% when the figures were first released.

The bicycle retailer reported that the brand remained optimistic about its long-term future.

"While strong interest in bicycling has cooled as the recovery to the pre-COVID-19 routine progresses, interest in bicycling continues to be a long-term trend," Shimano said in a statement.

While the baseline for the cycling industry as a whole may be higher than it was pre-pandemic, the sector's short-term bloat, seemingly ever-present supply issues, and subsequent shrinking demand have meant a marked overall downturn.

Shimano stated that demand for finished vehicles in Europe is "somewhat subdued" and that industry inventories are "high." They suggested a drop in demand, which they said was "partly due to the unfavorable weather conditions in early spring."

"In the North American market, sales remained weak and market inventories were consistently high," Shimano said.

Shimano also said that production cuts at its plants have made it "difficult" to absorb higher manufacturing costs.

This combination of high inventory levels and now low demand, thanks to delayed fulfillment, is being seen around the world, with obvious consequences such as the liquidation of long-standing distributors like Moore Large in the UK.

This negative situation is being seen in more or less every part of the cycling sector, from manufacturing to distribution.

Peloton has struggled mightily since COVID-19, Wahoo has come back from the brink of collapse, Zwift has experienced layoffs along with Wahoo, and even giants like Specialized have had to reduce headcounts. USA Cycling has been hit by declining revenues and job cuts.

Looking ahead, Shimano projects year-end sales of 450 million yen.