News Article

Sharp Contrast at Biggest in Bikes: Dorel and Giant ‘Bleed’, Accell Booms

Home 4164

TAICHUNG, Taiwan – In the first half of 2016 Giant Manufacturing Co., Ltd. reached total sales of TWD 29,08 billion (€ 833mn). This is down 3.7% compared to a year earlier. The Giant financial results as well as these of Dorel Sports (Cannondale, Mongoose, GT and others) are in sharp contrast to the performance Accell showed over the first half of 2016.

Sharp Contrast at Biggest in Bikes: Dorel and Giant ‘Bleed’, Accell Booms
Giant sales dropped by close to 4%; Accell saw a double-digit sales rise. – Photo Jo Beckendorff

Giant’s net profit (after tax) dropped by 5% to TWD 1.69 billion (€ 48.5mn). In the first half of 2016 Giant produced globally a total of 2.56 million bicycles and e-bikes.

Sharp contrast to Accell

Like Dorel Industries (‘mother’ of Cannondale, Mongoose, GT and other brands) Giant is another big player showing disappointing results over the first half of 2016. This is in sharp contrast to what Accell Group reported on its financials during the first half of this year. Europe’s biggest bike maker recorded a 10% increase in turnover to € 629.7 million. This rise was entirely organic. Accell’s net profit rose by 7% to € 34.0 million.

Striking differences

In the first half of 2016 Accell Group sold a total of 908,000 bikes. The average sales price stood at a big € 541; 23% higher on that of the first half of 2015. Comparing this to the average price per produced bike by Giant, the difference is striking. The average for Giant stands at € 325.

Causing contrasting figures

E-bikes and e-MTB’s are causing the contrasting figures at the world’s biggest in bicycle companies. In the first half of 2016 Accell benefitted from its early entrance in the e-MTB market. The turnover in e-bikes increased by 39%. E-bikes are now taking as much as 43% of the total revenue of Europe’s biggest in bikes.

Giant Europe

Giant performed better in Europe in the first half of the year compared to other regions. The Taiwan based bike maker forecasts the European bicycle market to remain flat for the whole of 2016, “but e-bikes shall continue to see growth,” says its financial report.

Suffering in US

Giant also saw satisfactory sales in Australia, Canada and Japan, but suffered in the US, “due to a high inventory level in the market.” These high inventory levels are caused by the bankruptcies of two major multi-sports retail chains. Without naming specific numbers Giant states on its US operation, “sales have been slightly down”. And that, “Giant’s inventory level is healthy.” Other major brands operating in the US are taking discounting measures to improve their inventory situation which will undoubtedly impact the market.

Also suffering in China

In China Giant suffered a 20% drop in sales. The country’s economy remains weak which softens demand. However, on the long run Giant remains positive on this huge market.

Outlook

On its outlook for the rest of 2016 Giant says in its financial report, “The market remains challenging.” But the company’s July product launches of the new 2017 range received very positive dealer feedback. “Giant will continue to devote to offering consumers innovative products with high added value, strengthen own brand components and improving retail service quality and experience.”

Comment on this article