Decline in Bicycle Demand Leads to Layoffs at Largest Czech Manufacturer

In response to a rapid decrease in bicycle demand, the largest domestic bicycle manufacturer, Bike Fun International from Kopřivnice, will have to lay off a third of its employees. Bikes are being sold at discounted prices this year, and the average price has also decreased.

“The decline in production is due to the overall state of the cycling industry,” confirmed Stanislav Matušů, the company’s director.

“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,” he added.

According to Matušů, delayed models from last year collided with this year’s new releases. “The weather didn’t help the season either, so the problems in our industry deepened,” Matušů noted.

The most significant decline, he said, occurred in the segment of ordinary lower and middle-class mountain bikes. The company manufactures bikes under brands such as Superior and Rock Machine.

Due to the decline in orders, Bike Fun had to adjust its production to the current situation, including reducing the number of employees. While the company had around 550 employees at the beginning of the year, it is expected to have less than 400 by the end of the year.

Mainly, production mechanics for bicycles received terminations. Additionally, the company canceled the two-shift operation in the painting department due to decreased demand.

The company aims to retain its employees and expects a revival in the cycling industry by 2025.

While Bike Fun, which belongs to the Czech Consillium group of billionaire Tomáš Němec, produced over 189,000 bicycles last year, this year’s production is expected to reach 155,000. Matušů expects a turnover of 2.7 billion CZK this year, compared to 2.9 billion CZK the previous year.

Decreased Prices and a Wide Range of Options

“There is an extreme surplus of bikes on the market. This year, there was a significant drop in demand with a record number of manufactured and imported bicycles,” confirmed Martin Kudrna, the director of the bike dealer Bikero.

According to him, parts manufacturers caught up with the delays and are supplying all pre-ordered sets from previous years to bicycle manufacturers, resulting in continuous production of more and more bikes for the already overcrowded warehouses.

Consequently, several bike manufacturers have repeatedly lowered prices for current bike models during the season, which benefits customers. Prices are lower, and the options are wide.

“We are also working hard to purchase bikes from our suppliers at significantly reduced prices and offer customers truly advantageous prices in autumn sales or the upcoming Black Friday promotion,” added Kudrna.

As confirmed by Martin Štorek, the bicycle shop owner in Řevnice, the demand for new bicycles may be weaker. Still, there is an increase in bicycle servicing, as there were significantly more sales of bikes in previous years.

According to the Czech Statistical Office, the average price of bicycles decreased by 7.5% year-on-year in September. While the average mountain bike cost was over 18,000 CZK a year ago, it was slightly below 17,000 CZK in September this year.