As Americans bid farewell to 2020, 2021 welcomes yet another wave of the coronavirus. It’s getting uglier, but no industry has had it worse than the mountain bike sector.
Scores of people rushing in to buy new bikes, only to meet with empty shelves and a declining economy.
Some companies have come around to producing bikes in large numbers. And many of the US-based manufacturers are at an advantage. But the general consensus is the biking industry has suffered insurmountable losses in the last year.
So what’s causing this mountain bike shortage? And how are, or can, businesses work their way around the problem?
Let’s take a closer look at how the shortage has impacted corporates and retailers alike, and how the issue can be solved.
What’s Causing The Global Mountain Bike Shortage?
People are buying more bikes now than ever. Public transport has become much obsolete at this point. So why is there a mountain bike shortage?
COVID-19; the pandemic has affected the biking industry in more ways than you may think. As the year comes to an end, it only gets worse. And international trade and commerce are becoming more and more unfavorable as the month’s pass.
Now, this wouldn’t be an issue if all the US mountain bike companies and bike shops made their products. But the reality is, a majority of US bike parts are manufactured overseas, mostly in China and Taiwan.
China in particular is the US’s largest supplier of bikes and bike parts. It is estimated that, before the industry was overtaken by China, the US alone was producing over 5.6 million bicycles of its own. Had our resources been more elaborated, this could’ve been on our way to industrial independence.
Mountain Bike Production
In 2015, America’s production of bikes dropped down to just 200,000 each year. And the number kept getting worse.
And that wouldn’t have been an issue had the pandemic not struck. China, as we all know, is the epicenter of the outbreak, and as such, all mountain bike manufacturing has come to a halt. Shipments are being delayed at ports for days and weeks, and some don’t make it to the US at all.
And it’s not just China. Taiwan, Japan, and most other East Asian countries are all crucial to America’s biking industry. And without their production and supply, US companies just won’t be able to meet the everyday MTB requirements.
But what could only make this supply and demand problem worse is increasing demand. And lo and behold, that’s exactly what’s happening. Due to safety concerns, Americans are ditching public transit in favor of safer options, such as bikes and scooters.
And now that people have more time to focus on their physical well-being, many are indulging in the hobbies of mountain biking and biking. Gyms are closing down, and bikes are the only way people can stay fit. In fact, between April and July of 2020, bike sales soared 81% higher as compared to the same time in 2019.
As a result, bike companies are left with increasing demand and a dilapidating supply. This means bikes are disappearing off the shelves, even from local bike shops.
To make matters even worse, bike theft has peaked at an all-time high, at 18% higher than last year. And more expensive bikes are being stolen at incredible rates. As such, the demand for a new bike increases as the supply only decreases.
Taking all that into account, a mountain bike shortage in 2020 seems almost inevitable. And while measures are in place to curb it, it’ll be a while before we’ll see another bike on the shelf.
Why Don’t They Just Make More Bikes?
A simple solution, isn’t it? Why can’t the manufacturers just make more bikes in order to curb the supply-demand disproportionality? Well, a couple of factors prevent them from doing so.
First of all, it is important to note that most companies, while based in the US, actually have their products manufactured in Asian countries. Even if they wanted, they couldn’t produce more bikes. All the bike manufacturers in China and Taiwan still wouldn’t be able to ship overseas, due to strict shipment policies.
Even with the pandemic dying down (and China having virtually eliminated the virus), shipment protocols are strict. And Chinese ports are prioritizing more essential exports over mountain bikes.
The second issue is those manufacturers who are based in the US or other countries are not working with much spare capacity. They have limitations. Each factory is working with limited resources, which doesn’t help to avert the issue.
Now, corporates could double the capacity if they squeezed in a few more machines. Or if they could just expand their factories to a larger scale. But this is neither beneficial economically nor financially. Expansion takes a hefty sum to accomplish. And not to mention the fact that machinery can cost thousands, if not millions, of dollars to acquire.
And even if the double capacity, what would these companies do once the demand has been met? Millions of dollars that went into rapid and global-scale production would be lost. Machinery would go idle once everyone had a mountain bike. This is why corporates always aim to meet the demand, but not to eradicate it.
Impact of The Bike Shortage in The USA
With the pandemic leaving its mark on almost every industrial sector, the biking sector too has had its fair share of losses.
We don’t know exactly how much of a loss this pandemic has had, or how much it will in the future. As the biking industry was met with a landslide in early March this year, many companies were quick to note their best and worst-case scenarios.
Trek Bicycle Corp., for instance, estimates that sales would tumble down to 50% in April. By late May, we could expect an additional fall of about 20%. But after that, the road would be mostly smooth.
Sales could fall down by up to 80% in April, followed by an additional 40% decrease in early May. And as this devastating year would go on, a drop of 10 to 20% was inevitable.
With that being said, the ones who have to suffer the most are the ones that don’t even make the bikes. Bike shops all over the country are shutting down due to low stock and no supply. Owners are having to shyly direct customers out of their shops. Racks sit empty and barren where they once used to be flush with mountain bikes.
But when will this mountain bike shortage end? Bike shop owners are now fearing it will likely follow them into the next year until ports in China and Taiwan are open. Right now, their main source of income is bike repair and spare hardware parts. Many are resorting to other jobs that require no skill and won’t make back the money that they lost.
But Wait, There’s Still Hope
Many companies have created and implemented solutions into their business plan. And a ray of hope seems to shine from an otherwise grey sky.
As the demand is high, bike retailers and corporates have the best opportunity to sell out. The only thing that’s stopping them is they have nothing new to provide them. There are two ways they can handle the issue.
The first solution is to have a “safety” supply of 30 to 60 days. Bike retailers can start by overstocking on bikes that they can acquire. They’re not perishables, so they can stay in the warehouses for up to 60 days.
Trek Bicycle Corp., for instance, is one such corporation that has implemented that tactic right from the beginning. They keep a safe supply of 60 days in case their overseas supply cuts off.
Individual bike retailers that aren’t associated with anyone corporation can benefit the most from this strategy. They can acquire the little stock that multiple bike companies have, then save them up for when the business starts booming.
Of course, this isn’t an immediate solution. It’s something that retailers should’ve done from the very beginning. Which is bringing us to the second solution: bike repair.
Bike Repair Shops
Since the pandemic has impacted all sorts of industries and markets, customers are likely suffering in their way too. And as such, they want a more budget option, one that they can do along with for everyday commuting. And what could be better than bringing in older bikes to repair?
This is a business that both massive bike manufacturers and small-scale retailers can benefit from. And bike repair, while it doesn’t cost as much as buying a whole bike, can be a last resort to make ends meet. A good tool kit like the Park Tool kit will go a long way.
You also have to consider, people will still bring new bikes for repairs, epically since now they’re using it more often.
The only hurdle in this path is the availability of bike parts. Repairing requires spare parts, and many times, the bike simply cannot be repaired. However, retailers can still charge for a full inspection, even if the outcome is not fruitful.
The pandemic has impacted the economy in unfathomable ways. It’s affecting how we work, commute, interact, and socialize. And the more we try to distance ourselves from it, the more it creeps up into our lives and homes.
And no sector has suffered more than the biking sector. International suppliers continue to cut off shipments to the US. And Americans are becoming more and more intrigued by the activity. So when escalating demand is met with declining supply, disaster is sure to strike.
But it’s not all over yet…
Bike manufacturers and independent retailers can work their way around the COVID-19 curve. And soon, bike shops will see a boom in business.
It won’t be all spontaneous though. Every major bike company will have to battle the mountain bike shortage on its own. And new strategies must be devised to dampen the problem at hand.