Speedzilla Forums banner

1 - 13 of 13 Posts

·
contra mundum
Joined
·
5,316 Posts
Discussion Starter #1
http://www.latimes.com/business/la-fi-1217-motorcycle-show-20101217,0,5256698.story

latimes.com
Motorcycle makers downshift at Long Beach show

Only 450 bikes will be on display at the 30th annual International Motorcycle Shows, compared with 725 in 2008, as the industry's struggles continue.

By Susan Carpenter, Los Angeles Times
December 17, 2010

Motorcycles just can't catch a break. While retail sales overall are finally recovering from the worst recession in decades, the motorcycle industry hasn't yet hit bottom.

In decline since late 2008, new motorcycle sales are down 15.3% through the first three quarters of 2010 compared with 2009. Last year, annual sales dropped almost in half to 655,000 after six straight years of 1-million-plus sales.

Nathan Verdugo, 31, of Costa Mesa is an off-road racer who had gotten used to buying a new bike every year. That changed in 2009, when he was laid off from his job with an apparel manufacturer. Now he works for a competitor, making half the money he used to.

"I'm an avid rider, but more recently I'm a poor rider," he said. "The economy's taken its toll. I've gone from making good money to just being happy to be employed somewhere."

He said he'd love to buy a new KTM 350 SX but is instead contenting himself with a new helmet.

This weekend, the nation's motorcycle industry is bringing its latest hopes for recovery to the Long Beach Convention Center.

When the 30th annual International Motorcycle Showsopen Friday, 450 motorcycles will be parked on the carpet, including the new BMW K 1600 and Mission R electric race bike. Seven manufacturers will be offering test drives. In 2008, 725 bikes dotted the Long Beach Convention Center floor.

"There has been so much uncertainty with the economy, the consumer is just sitting back and trying to determine, 'Am I safe in my job?'" said Greg Heichelbech, chief executive of Triumph Motorcycles, North America, in Newnan, Ga. Triumph has seen U.S. sales drop to about 7,500 bikes in 2010 from 10,000 in 2008.

After a five-year absence from the shows, Triumph is returning this year to display the largest new product lineup in the company's 109-year history, including the Tiger 800 adventure models. It will also offer test rides.

"Butts on seats is the best way to demonstrate and prove that our product is everything we say it is," he said. "It was time for Triumph to get back into the show to reach a broader swath of motorcycle enthusiasts."

Not every manufacturer feels the same way. Piaggio — which owns the Aprilia, Vespa, Moto Guzzi and Piaggio brands — isn't participating this year, even though it's introducing nine new models to the U.S. market in 2011.

The shows, which travel to 12 cities around the country, are "an excellent platform for launching new models … but for the near term, we're very focused on supporting our dealers," said Paolo Timoni, president and CEO of Piaggio Group Americas in New York.

Piaggio first dropped out of the show last year, as did Austrian dirt bike maker KTM.

What has hurt motorcycle sales so significantly is, of course, the economy, experts say. Consumers haven't had the discretionary income to spend the $13,000 it takes, on average, to buy a new machine, according to the Motorcycle Industry Council, an trade group in Irvine.

The credit crunch has also had a severe effect, because 1 in 3 bikes is at least partially financed.

"Before the economy hit and I lost a job three years ago, I was buying two new motorcycles every year," said Tom Monroe, 52, a motorcyclist who lives in Orange and who would like to buy either a Ducati Hypermotard or Harley-Davidson Nightster but can't afford either one.

Like a lot of bikers, Monroe used his home equity line of credit to buy motorcycles when the housing market was flying high. When his home equity dropped, "that all went away," Monroe said.

Sport bikes, which have a median rider age of 28, and cruisers, with a median rider age of 46, have both seen steep declines. Younger buyers are having difficulty finding credit, industry experts say, and older buyers are simply leery, having seen the values of their retirement plans plummet.

It doesn't help that men have been harder hit than women by the downturn, and that 90% of motorcyclists are male, according to the Motorcycle Industry Council.

Industry leader Harley-Davidson is showing 24 bikes this weekend. Its U.S. sales were off 13.4% through the first nine months of 2010 from the year-ago period; 2009 U.S. sales were down 25.8% from 2008.

Still, the company is No. 1 in market share among women and other minorities, which is where the 107-year-old manufacturer is focusing its sales efforts, along with emerging markets. To help counter U.S. sales declines, Harley-Davidson is adding dealers in Russia, Brazil, India and Jordan.

The problem isn't Harley-Davidson, it's the economy, said industry expert Michael Millman, managing member of Millman Research Associates in New Jersey.

"We should be seeing some improvements in the economy. That should help the sector and help Harley-Davidson," Millman said. "If consumer discretionary spending increases, people are likely to start investing in the names they think of first. Harley-Davidson is a name that's broadly known."

Data from the Motorcycle Industry Council support Millman's point. Several statistics indicate motorcycle ridership is increasing, even if new motorcycle sales have declined. From 2008 to 2009, vehicle miles traveled by motorcyclists increased an estimated 5% and the riding population increased 9%, according to the council.

Motorcycle tire sales have increased 6.6% in 2010 compared with 2009, according to the U.S. Motorcycle Tire Sales Report, indicating people are still riding. They're just riding used bikes.

"We think we're beginning to see the light at the end of the tunnel," said Bob Starr, corporate communications manager for Yamaha Motor Corp. USA in Cypress, which is introducing three new models for 2011, all on view this weekend.

As the year ends, there seems to be "a little bit of renewed interest," he said. "I'm not going to say the industry is going to come back to where it was … but there are many people in this country that are passionate about motorcycling that will sustain the industry and bring about growth, hopefully in the near future."
 

Attachments

·
Registered
Joined
·
2,607 Posts
They sound an awful lot like they sounded at the Milan Bike Show.
An Italian journalist commented "They are trying to show optimism but they don't believe what they are saying".
One of the things that hit them the hardest is the shift away from sportsbikes, a traditional source of excellent profits. I don't know how the situation in the US is but here they hit a downwards trend around 2005, when the industry was still selling bikes by the truckload. There are various reasons for this but the major one was fashion: sportsbikes were out, big, road oriented trailies were in. The Japanese, who once literally owned the sector, were caught napping and BMW made billions. Still it didn't matter since they were making a good profit with large volumes of scooters and road going 600's.
To be completely honest many dealers asked the Japanese to differentiate, to introduce large displacement bikes people would be actually interested into since their own margins on 600's and scooters are so thin they require large sales. The Honda CB1300, introduced in most European markets in 2003, connected instantly with customers. How did Honda react? By reducing imports to a trickle and pressuring dealers to push on customers the bland CBF1000. This year they outdid themselves by stopping imports of the popular unfaired S version altogether and only importing the half-faired S model.
Sure, the economy is in the crapper but they made some very bad decisions they had to pay sooner or later.
 

·
Panigaliscious
Joined
·
9,103 Posts
In the US, the continued relative strength of the Euro and Yen, coupled with high insurance rates and poor rider training, compounded by a continuing crappy economy...means this is almost entirely predictable.

Many years ago a motorcycle went from cheap transportation to a toy. When you can buy a little Hyundai for $10k that gets the same gas mileage the argument for a bike as a gas saver goes out the window. Toys are the first thing that goes in a bad economy, and the last thing people buy when they financially recover.

Prices for a new bike seems nuts to me. Now it is Hondas and Suzukis who want $14k, this is expected for Ducati or Harley, not for Japanese bikes. Triumph seems to be doing the right things and that is why they are seeing increased market share.

When Triumph returned to the US in 1995, did anyone envision a day that their products would be cheaper than any of the competition?
 

·
Registered
Joined
·
1,051 Posts
anyone who truly loves motorcycles should be enjoying this for all its worth. bike prices go down, and others go up. i have more bikes than ever, and pos commuters sell for higher prices than ever. looking for a downside seems gay.
 

·
Registered
Joined
·
3,559 Posts
Better times economically are coming. There are catagories of luxury items that are hit harder than bike sales....high end autos, boats, RVs, jewelry, HiFi....etc.
 

·
This space for rent
Joined
·
1,478 Posts
One thing that has happened is a lot of people owned more than one bike, and if they are hit by the economy then they start selling off the bikes they have. I myself had 4 bikes a couple of years ago and due to unforeseen circumstances had to sell off all of them, but now I have 2 but both of them I bought used. I don't know when I'll by a new bike again, although I like the looks of the new Tiger 800 and the Yamaha Super 10 and may consider one of those in the future.

The used market is saturated and a lot of people are selling off their seldom ridden bikes so there are some good deals to be found.
 

·
Registered
Joined
·
1,051 Posts
^^^^ EXACTLY what i am talking about

people who dont understand how to financially structure their shit lose out in economic "downturns"

myself, and every single member of my family, from ceos to middle of the pack workers, have all profited immensely.
 

·
Registered
Joined
·
57 Posts
^^^^ EXACTLY what i am talking about

people who dont understand how to financially structure their shit lose out in economic "downturns"

myself, and every single member of my family, from ceos to middle of the pack workers, have all profited immensely.
I just bought a new bike!!


I saved 15 bucks by not going to the "show". No, 35 bucks, 'cause I would've had two ten dollar beers while wandering around wondering why the thin turn out.
 

·
Currently: Moderating
Joined
·
12,576 Posts
The credit crunch has also had a severe effect, because 1 in 3 bikes is at least partially financed.
I thought that percentage would be much higher given the number of clowns I've seen walk in the local shop and try 5 different SSN's to get financing approved. Thought it would be more like 50%+ financing rate.:confused:
 

·
Panigaliscious
Joined
·
9,103 Posts
For new bikes I would be inclined to believe the number financed is more like 70%, with that number even higher as the bike gets more expensive. If you want a new Ducati for $16k and Ducati Finance offers 2.9% as they did recently, it would make sense to finance it even if you had money in the bank.

Then again, buying a brand new bike is never a sound financial decision unless you plan to race professionally.
 

·
Registered
Joined
·
4,178 Posts
http://www.latimes.com/business/la-fi-1217-motorcycle-show-20101217,0,5256698.story

latimes.com
Motorcycle makers downshift at Long Beach show

..."Before the economy hit and I lost a job three years ago, I was buying two new motorcycles every year," said Tom Monroe, 52, a motorcyclist who lives in Orange and who would like to buy either a Ducati Hypermotard or Harley-Davidson Nightster but can't afford either one.

Like a lot of bikers, Monroe used his home equity line of credit to buy motorcycles when the housing market was flying high. When his home equity dropped, "that all went away," Monroe said.

...It doesn't help that men have been harder hit than women by the downturn, and that 90% of motorcyclists are male, according to the Motorcycle Industry Council.

Industry leader Harley-Davidson is showing 24 bikes this weekend. Its U.S. sales were off 13.4% through the first nine months of 2010 from the year-ago period; 2009 U.S. sales were down 25.8% from 2008.

Still, the company is No. 1 in market share among women and other minorities, which is where the 107-year-old manufacturer is focusing its sales efforts, along with emerging markets. To help counter U.S. sales declines, Harley-Davidson is adding dealers in Russia, Brazil, India and Jordan.

The problem isn't Harley-Davidson, it's the economy, said industry expert Michael Millman, managing member of Millman Research Associates in New Jersey.
Interesting article, only 3 comments per sections clipped above:
  1. Tom, using home equity to buy motorcycles... 2 per yr to boot... :banghead. ...:rolleyes: WTF. I just went to a house party where the couple, just over 30 with no kids and 2 cats and a combined income equal to mine, no trust-fund or inheritance owning a $500K 3,500 - 4,000 sq. ft. house in a very trendy, read: high tax part of town, two brand new cars in the area of $40k and here's me living in a house 50% cheaper, saving up cash for my next bike with my car and bike paid off. I'm not getting it. I have no problem with credit or getting it but I limit how much I pay in interest because personally I detest paying interest and avoid it at all costs. Yet some people seem to have a love-fest with interest payments. :wtf
  2. Anyone know where this comes from... news to me that the economic downturn has hit men significantly harder than women in general... perhaps in terms of motorcycling since the majority are men but otherwise? From my perspective it seems to have hit everyone somewhat evenly in the upper-middle classes down regardless of sex. Maybe it's just seeing it put so bluntly here that makes me think twice...
  3. Industry Leader:confused: ... HD... I'm assuming they mean for the USA in cruisers only and not worldwide... ahem... Honda.
 
1 - 13 of 13 Posts
Top