OSAKA -- Japanese bicycle parts maker Shimano revised its 2020 earnings forecast upward Tuesday amid a stronger-than-expected recovery, as consumers gravitate toward bikes as a healthy, eco-friendly transportation method with a low risk of coronavirus transmission.
Net profit is now expected to grow 24% this year to 64.3 billion yen ($613 million), an upgrade from the previous projection of 58.3 billion yen.
Shimano cited increased demand across much of the world for bike parts, as well as for fishing equipment, which generates about 20% of its revenue. Monthly sales have been recovering since May, and the company noted shortages in distributor inventories in European and North American markets.
Total sales for the year through December are forecast to reach 370 billion yen, close to a company record.
Many newcomers to biking have been buying midrange and budget models as an easily accessible form of exercise and recreation, according to Shimano. The company also saw steadily rising demand in Europe for parts for high-end electric bicycles.
The pandemic has forced Shimano to put bike races and fishing competitions on hold, which had raised concerns about the potential effect on its marketing efforts, but demand looks likely to keep growing for the time being.
Going forward, "the question is whether people who started riding bicycles because of the coronavirus will become fans," the company says.
Shimano has indicated that it has no plans at this time for a significant investment in increased production capacity.