More bike parts supply chain problems loom as Shimano factory shut down temporarily

Shimano’s factory in Malaysia will remain closed for the next fortnight due to a government imposed lockdown following a surge in COVID-19 cases, raising the prospect in further disruption to the supply chain for bike parts.

The factory had been operating at 60 per cent capacity since 1 June due to government measures aimed at containing a fresh wave of coronavirus cases, but had to shut completely from last Thursday 10 June as restrictions were further tightened.

The government has now extended the measures, which had initially been in force until 14 June, up to 28 June when they will be reviewed again.

In a statement, Japan-based Shimano Inc said: “The Malaysian government announced a total lockdown from June 01 to June 14 considering the situation of COVID-19.

“However it was extended until June 28. Consequently, we also have to extend our Malaysian factory shut down until June 28.”

The factory in Malaysia, together with another plant in Singapore, were both closed for a period last year during the first wave of COVID-19, hitting production, and at the time, CEO Yozo Shimano said that “Like all the other manufacturing companies, we want to take this opportunity to revisit our supply chain.”

Shimano dominates the global market for bicycle components, with the Malaysia factory, in operation since 1990, manufacturing products including entry level to mid-range groupsets, wheels and pedals.

Higher-end products, such as those in its Dura Ace groupset, are made in Japan so will largely be unaffected.

The plant being idle until for at least the next two weeks will exacerbate an ongoing global shortage of bike parts that is explained by the unprecedented coming together of several factors.

Those include widespread national lockdowns across the world in the early months of the pandemic which not only resulted in manufacturing being suspended, but also had a huge knock-on effect on the global shipping industry, which has also seen container prices soar.

At the same time, with governments encouraging people to switch to active travel, there has been huge demand for bikes, with many retailers selling out of popular models especially at the sub-£1,000 price point.

That has coincided with incentive schemes in a number of countries such as the UK and France aimed at getting older bicycles back on the road by providing a discount on repairs – which in turn has created spikes in demand for some parts.

In April, we took a detailed look at the impact of those factors on the UK bicycle market, including the role of components, where lead times are said to have increased from 30 days to 11 or 12 months.

> Britain’s bike shortage, part 1: what’s going on, when will supplies return, and how can you improve your chances of bagging the bike you want?

In that article, Peter Lazarus, cycling market leader for Decathlon UK, told us: “Making the bike frames isn’t a problem. Decathlon certainly has no problems producing its own bike frames. It’s the componentry that’s causing the issue, particularly the headline componentry: groupset, wheels, saddles, handlebars …

“It’s a global issue based on unprecedented demand and unstable and unreliable supply chains – raw materials going into factories, the finished products from factories to assembly as OEM [components fitted on complete bikes], and spare parts to retail.

“There is huge demand for purchasing the goods and there’s also huge demand from producers who are potentially over-ordering,” he added.

We also spoke to members of the cycle trade about ways in which people in the UK looking to buy a new bike can try and minimise the impact of disruption.

> Britain’s bike shortage, part 2: tips for buying the bike you want in 2021