Prague, Czech Republic – October 23, 2023 – Bike Fun International, the largest domestic bicycle manufacturer based in Kopřivnice, has announced a workforce reduction as the cycling industry grapples with a rapid decline in bicycle demand. With a third of its employees set to lose their jobs, the company is responding to these challenging market conditions.

The decline in bicycle production is attributed to the overall state of the cycling industry, according to Stanislav Matušů, the director of Bike Fun International. “During the COVID-19 pandemic, there was an inflated demand as bicycle manufacturers ordered significantly more when everyone wanted to ride a bike. Then everything returned to normal, and the usual seasonality and bicycle manufacturers had full inventories,” Matušů explained.

In this complex market environment, delayed models from the previous year have collided with new releases, and unfavorable weather conditions have further compounded the industry’s problems.

The most significant decline in demand has been observed in the segment of ordinary lower and middle-class mountain bikes, which Bike Fun International manufactures under brands such as Superior and Rock Machine.

As a response to the shrinking order volume, Bike Fun International has had to adapt its production to the current situation, including a reduction in the number of employees. While the company employed around 550 people at the start of the year, this number is expected to drop to less than 400 by year-end. This reduction particularly affected production mechanics for bicycles, and the company also canceled the two-shift operation in the painting department due to decreased demand.

Despite the current challenges, Bike Fun International remains optimistic about the future. The company aims to retain its employees and expects a revival in the cycling industry by 2025.

Bike Fun International, which is part of the Czech Consillium group owned by billionaire Tomáš Němec, produced over 189,000 bicycles last year. However, this year’s production is expected to reach only 155,000 units. Matušů anticipates a turnover of 2.7 billion CZK this year, compared to 2.9 billion CZK the previous year.

In the current market scenario, there is an oversupply of bicycles, leading to a significant drop in demand. According to Martin Kudrna, director of the bike dealer Bikero, parts manufacturers have caught up with delays, resulting in the continuous production of more bikes that are flooding the already crowded warehouses. To attract customers, several bike manufacturers have reduced prices for current bike models, making cycling more affordable and increasing the options available to consumers.

Despite the decrease in demand for new bicycles, there has been a surge in bicycle servicing, reflecting the fact that many bicycles were sold in previous years. The Czech Statistical Office reports that the average price of bicycles decreased by 7.5% year-on-year in September. This price decline benefits customers, with the average cost of a mountain bike dropping from over 18,000 CZK a year ago to slightly below 17,000 CZK in September this year.

Article by Prague Forum