Finnish bicycle market hits deepest slump this century

Finland’s bicycle market is shrinking sharply, with imports and domestic production falling to their lowest levels of the 2000s, according to calculations by Yle and the Finnish Cycling Federation.

The wholesale value of imports and production is expected to fall below 40 per cent of the 2024 peak. The downturn follows a bubble fuelled by the coronavirus pandemic and a tax exemption for employer-provided bicycles, which the government cancelled in spring 2025.

“The figures are quite severe. We have fallen a long way this year,” said Antti Heikkinen, the federation’s head of cooperation and partnerships.

The market overheated in the early 2020s. Tunturi recently filed for bankruptcy after a long run of losses, while Helkama furloughed its staff during the summer and halted production at its factory in Hanko.

Pelago Bicycles, a Helsinki-based company founded in 2009 and known for design-focused, slightly retro-style bicycles, has also faced a difficult market. The company broke even last year, while its sales this year are about 6 per cent ahead of last year’s figures, said chief executive Mika Sarimo.

Pelago has been supported by exports, which account for 70 per cent of its sales. Electric bicycles make up only 10 per cent of its product range.

The market’s rapid growth began in 2020, when the coronavirus pandemic and restrictions increased interest in cycling just as factories around the world were disrupted.

After the supply shortages caused by the pandemic, production accelerated and flooded the market with bicycles, leading to oversupply. The wider European Union market had already begun to decline, but Finland saw the value of bicycle imports and production rise from just under 150 million euros to almost 250 million euros in 2021 and 2022, according to the federation.

The number of imported and domestically produced bicycles rose from about 350,000 to about 450,000 during the same period. The increase was driven by a tax exemption of up to 1,200 euros for employer-provided bicycles introduced by the previous government at the beginning of 2021. At its peak, more than 115,000 cyclists used the benefit.

Heikkinen said the tax decision gave the market a major boost, attracted new companies and particularly increased demand for more expensive recreational bicycles and electric bicycles.

The government’s decision to withdraw the exemption as part of its spending cuts came as a shock to the industry. Companies said it slowed sales beyond the employer-provided bicycle segment, while consumer confidence was already exceptionally weak.

“I believe the market is now reaching its lowest point after the change. It will certainly correct itself and adjust to a level matching the new demand,” Heikkinen said.

Sarimo said the industry also needed courage from Finnish consumers and a calmer situation in the Middle East. He said the conflict had complicated freight transport and affected component manufacturers that depend on natural gas and oil from the crisis region.