Merida begins to feel pinch on supply constraints, Giant revenues rise

Bicycle manufacturing giant Merida last week told investors within its regular updates that a shortage of components and shipping containers were beating back revenue, which last month dropped 24% when comparing year-on-year data.

The statement outlined that shipments had dropped by just over a quarter with production lines struggling to keep key components on hand.

From the start of the year to September, Merida said that it had shipped 930,436 bicycles, which is thus far up 12.49% over the same period in 2020, a year when sales spiked on the back changed habits during the peak of the pandemic’s first wave. Those sales translated into a nine-month revenue of NT$22.76 billion, 12.87% up year-to-year.

“The supply of components is still very unstable,” said the business, adding “shipping space is limited and the container shortage remains. Thus far, we still have about 15,000 bikes waiting to be shipped.”

With container prices remaining elevated and the supply hangover remaining Merida has run fewer working days in recent times. The installation of a new enterprise resource planning (ERP) system has likewise reduced the overall output as the company adjusts. The switch from the old system disrupted sales, but Merida expects that post transition it will run a smoother operation.

An investor’s note issued last week said that some shipments from the last quarter would be delayed and instead go this quarter, leading revenue figures to appear ahead of where they otherwise may be. A rise from NT$7.46 billion in the last quarter to NT$8.43 billion this quarter is forecast.

Meanwhile, the Giant Group also issued data on its recent performance, putting its annual revenue 17.83% ahead on a like-for-like basis and reaching NT$61.9 billion in the first nine months. Demand remains very strong in the USA and Europe, according to Giant,

Back in August, Peter Nisbet, Managing Director at UK importer Windwave gave some context on the per bike price increases attributed to the shipping container crisis affecting all bike brands shipping goods overseas. He told CI.N that, where approximately 120 bikes can be loaded into a 20’ container, the cost previously per bike sat at £8.33. At £4,000.00 per container, rather than £1,000, the price rises to £33.33 per bike shipped. Container prices have generally continued to rise since.