Broken Shimano Ultegra and Dura-Ace crankarms

Shimano’s crankarm recall has cost it $18 million so far

The massive recall has proceeded largely according to Shimano's financial projections.

Joe Lindsey
by Joe Lindsey 13.02.2024 Photography by
Dave Rome
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Could be worse, could be better.

Shimano’s massive recall of several series of its 11-speed Ultegra and Dura-Ace crankarms cost it $18 million in the second half of last year, the company revealed in its 2023 annual report. [PDF]

The bad news, of course, is that the long-delayed recall cost US $18.3 million. The good news is that’s closely aligned with the company’s expected costs for it, a figure that represents a tiny fraction of its $2.42 billion in annual sales in its bicycle division. While the recall is ongoing, the company said previously it does not expect to have to replace more than a small percentage of the cranksets, which are subject to a dealer-run inspection program rather than a blanket recall.

All is not, however, perfectly optimal at the world’s largest cycling component maker. That full-year sales figure for its cycling division, while a massive absolute number, is down 29.5% from 2022; operating income for the bicycle segment dropped 55%. The smaller fishing division, by contrast, was down just 1.6% in total sales revenue.

Shimano said sales in the European market remained strong, but in North America, Asia, and Oceania markets high inventory levels and decreasing consumer confidence, partly due to inflation, led to sluggish sales. Of concern, bike division sales have declined for three straight quarters; Q4 sales were lower than at any point since 2019, the last pre-pandemic quarter.

Still, Shimano looks to be in relatively solid shape, with an increase in cash assets. Its 2024 outlook is mixed. Moderating inflation and economic recovery could help bolster demand, but Shimano cited geopolitical risks, including war in Ukraine and the Middle East, as well as elections in the United States and other countries, as negative or unknown factors.

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