The Motorcycle Industry Is Dying

General questions about Americade and motorcycles.

Moderators: Site Admin, WCLamb

User avatar
WCLamb
Staffer
Posts: 5342
Joined: Sat Nov 01, 2003 9:11 am
Location: Mullica Hill, NJ USA
Contact:

The Motorcycle Industry Is Dying

Postby WCLamb » Wed Jul 05, 2017 11:25 am


The Motorcycle Industry Is Dying. As aging riders hang up their leathers, Harley-Davidson and Honda pin their hopes on smaller, affordable bikes for a new generation.
By Kyle Stock
July 5, 2017, 3:00 AM EDT
_______________________________________________________________________________________
For Fed Pacheco, it was a long journey from motocurious to motorcyclist.

There was a ride years ago in Texas on his uncle’s Suzuki Boulevard, not long after Pacheco had emigrated from Venezuela. A few years later, he decided to take a riding course and got his motorcycle license, though he still didn’t pull the trigger. But when Honda unveiled its new Rebel 500 in November, the 27-year-old finally went all in.

“I just started obsessing about it, to be honest,” he said. “The riding season was coming up and I thought ‘You know what? Maybe, it’s not that crazy.’” Pacheco traced one of the first Rebels on the market to a dealership in New Jersey, walked in and paid $6,800 on the spot. The bike was still in its shipping box.

With a starting price of $6,000, Honda’s Rebel 500 is aimed at younger, first-time riders. Honda’s Rebel is the latest entry in a parade of new bikes designed for first-time riders; almost every company in the motorcycle industry has scrambled to make one. They are smaller, lighter, and more affordable than most everything else at a dealership and probably wouldn’t look out of place in the 1960s—back when motorcycling was about the ride, not necessarily the bike. They are also bait for millennials, meant to lure them into the easy-rider lifestyle. If all goes as planned, these little rigs will help companies like Harley-Davidson coast for another 50 years.

“They’re new motorcycles, but they’re also new thinking,” said Mark Hoyer, editor-in-chief of Cycle World magazine. “They’re selling this perception of lifestyle ... it’s a cultural movement; a rebranding of the whole motorcycle industry.”

It’s also the manufacturing equivalent of a mid-life crisis. Motorcycle sales in the U.S. peaked in 2006 at 716,268 and promptly started to skid. When the recession hit, the market went down hard. Bike sales fell by 41 percent in 2009 and another 14 percent the following year, according to the Motorcycle Industry Council. That’s not surprising considering the economy at the time: A motorcycle is a picture of discretionary spending, and they can be tricky to finance even in a healthy credit market. Even now, with the stock market on a historic bull run and after the U.S. auto industry posted its best year on record, traffic in motorcycle stores has stayed slow. In 2016, U.S. customers rolled off with 371,403 new bikes, roughly half as many as a decade ago.

And then there’s the generational time-bomb. In 2003, only about one-quarter of U.S. motorcycle riders were 50 or older. By 2014, it was close to half. The market has been cruising on a demographic that may only be able to buy one more bike.

Suddenly, bike-makers desperately need new riders and millennials, apparently, are the best hope. Not only are there more of them than GenXers, but they have a longer expected lifetime value, which is corporate way of saying they’re a further away from needing a hip replacement.

Harley-Davidson’s Street 500 quickly turned its riding academies into a sales opportunity. Around 2010, bikemakers made a major strategic shift: Sturgis was out; Coachella was in. They needed something cool to show on the wealthy, quasi-hipster music scene, something far from the fat-fendered, chrome-soaked hogs buzzing around South Dakota. “Everybody is trying to do the same thing,” said Lee Edmunds, manager of Honda’s motorcycle marketing. “They’re all realizing they need to have more people come in at an entry-level stage.”

Harley-Davidson led the charge, perhaps because it dominates the U.S. market for large motorcycles and has the most to lose. Between 2006 and 2010, the number of big-engined Harleys registered in the U.S. plummeted by almost half. The company has hosted riding academies for first-timers since 2000, but it quickly ordered its engineers to design a true starter bike.

Unveiled in 2013, the Street 500 resembles a conventional Harley in the way an Ivy League quarterback resembles an NFL lineman. The engine, just shy of 500cc, won’t turn any heads in Daytona Beach or wake anyone up in suburbia. The seat sits relatively low to the ground and the whole package can be had for just under $7,000. The Street 500 quickly became the standard kit in Harley’s riding schools, which churn out 65,000 new riders a year.

“There was a requirement to be more relevant to urban environments,” said Anoop Prakash, the company’s director of U.S. marketing. “Prior to the Street, we certainly believed and knew many riders would start in another brand.”

At about the same time, Kawasaki launched its Ninja 300, a subdued version of its famous sport bike. It has the same angry wasp styling, albeit with a much smaller powerplant and pricetag—$5,000; anti-lock brakes could be had for $300 more.

In 2014, Ducati joined the first-timer fray with its Scrambler, resurrecting a sub-brand that it last made in 1974. The contemporary version is essentially an 803cc engine wrapped in six different trims, from a no-frills “Classic” to a stripped down café racer. The engineering lends itself to tinkering and Ducati encourages buyers to customize their Scramblers with add-on elements.

“We call it a naked bike,” said Jason Chinnock, chief executive of Ducati North America. “It was trying to bring something to market that had a nod to the nostalgia, but also the simpler way motorcycling was approached in the 1970s.”

About a year later, BMW pulled the cover off its G 310 R, a tidy, 350-pound version of its famous touring bikes. Anti-lock brakes are standard, and with a sticker price of $4,750, it’s less expensive than adding “smoke white” merino leather to one of BMW's 7-series sedans.

The base version of BMW’s G 310 R costs $4,750 and includes anti-lock brakes for a safer ride.

Finally, Honda rolled out the Rebel that Pacheco fell so hard for. Pacheco is cofounder of a Manhattan marketing shop called Hungry Studio—it’s his job to know what a brand represents and what a product projects. In the end, the Honda felt more right to him than the Harley-Davidson that he learned to ride on. “It didn’t feel cheesy to me at all; it felt tasteful,” he explained. “And I could definitely tell they were advertising to people like me.”

Make no mistake, the economics on these bikes isn’t great. Profit margins are far fatter on something like a Honda Gold Wing F6B, an 844-pound locomotive that starts at $20,500. But that swollen kit doesn’t hold much street cred where Pacheco parks in Manhattan, in part because the folks buying those big cruisers are quickly transitioning from the roadhouse to the golf course.

The problem, however, with this sudden industry pivot to younger customers is that it may be coming too late. For years, it was too easy to just keep building bigger, more powerful bikes. “They got more complicated, more expensive and more intimidating,” said Edmunds at Honda. “For a long time, all the manufacturers could do that, because that baby boomer market was so huge.”

Chinnock, at Ducati, calls it “the horsepower game.”

The new breed of small bikes, meanwhile, has quickly become the most promising part of the business. Between 2011 and 2016, sales of motorcycles with engines smaller than 600cc increased by 11.8 percent, while bigger, more powerful bikes managed only a 7.4 percent gain.

In its first full year its Scrambler was on the market, Ducati sold 15,000 of them—28 percent of its total business. “These riders were not looking at Scrambler as an entry to the world of Ducati; they looked at it as a whole new thing,” Chinnock said. “It’s kind of one of those business mistakes you’re OK with.”

Harley-Davidson, meanwhile, has a new marketing tagline: Nine bikes for under $12,000. Prakash, the marketing chief, breaks it down to $6 a day. Skip the latte; buy a bike.


ARTICLE Link with photos: :arrow: :arrow: The Motorcycle Industry Is Dying
Image
Image

User avatar
Ryck
Posts: 661
Joined: Mon Mar 17, 2008 5:28 pm
Location: New York City, NY
Contact:

Re: The Motorcycle Industry Is Dying

Postby Ryck » Thu Jul 06, 2017 1:12 pm

Interesting article. That explains Honda and H-D coming out with smaller engine bikes. I'm sure more to follow from the other manufacturers.

FrankJ
Posts: 103
Joined: Sat Dec 13, 2003 8:27 am
Contact:

Re: The Motorcycle Industry Is Dying

Postby FrankJ » Thu Jul 13, 2017 4:29 pm

Not a surprise, really applies to all bikes.

http://www.msn.com/en-us/money/companie ... spartandhp

Frank

Dragonglide
Posts: 732
Joined: Sun Apr 03, 2011 3:28 pm
Contact:

Re: The Motorcycle Industry Is Dying

Postby Dragonglide » Fri Jul 14, 2017 11:35 am

I wonder. As I often do.... is it that people aren't interested in bikes? Or is it that people can't afford them? I remember when I bought my first new bike. A Suzuki Volusia, which I sold to a friend a few years back, and will eventually, and hopefully buy it back due to sentimental reasons. It was about 6 grand out there door. Which to me in 2003, seemed reasonable. I was looking at Harley's and the likes and they were all double, if not triple the cost. I could never justify the cost difference.
I keep seeing these new bike's prices going up and up and up. It used to be CVO's were crazy expensive, but you were buying a custom hot rodded motorcycle with every single bell and whistle that was offered stuck to the bike. At the time I didn't need, or want a bike with 18 speakers, automatic ride control, inflatable passenger and cool guy glasses included. All I wanted was something that made cool noises and got me down the road.
Now, after riding the "lil" bike for a bit and going on longer and longer rides with more of the highway slabin front of me, I realized although this bike is awesome, I could use a fairing, a radio would be neat, and cruise control would be awesome!! But I didn't NEED it, I wanted it. And when the opportunity presented itself to be able to move up in size and variety, I did.
With the introduction of the Street series Harley Davidson, I believe the company went backwards, the metric cruiser pretty much have that market covered. So why bother introducing the street series when you had platforms like the Sportsters and Dynas that could have been improved upon? A Street rod is 8 grand!!! While a Boulevard or Honda Shadow can still hover around 6 grand. And for the most part, the metric bikes just don't break.
I've also heard of cost spikes in the sport bike world as well. I remember when a super super sexy Hyabusa was tops 9 grand. And now I am hearing they are in the teens? Are you kidding me? That's kind of crazy to me. I think motorcycle manufacturers are trying to reap more than they can sew and try to harvest as much money as they can out of a new crop without even giving them anything to entice them to grow the market any larger.
Motorcycles are not the first in the trend, and again not the last, but I will say this. I do believe that this niche market, has a great deal to lose with the pricing structure now in place. I am kinda thinkin, is it worth it for me to spend 30 grand on a bike I use as much as I can, but not all year, or put that into investing in something else like a home or a newer vehicle? I'd rather spend that on a four wheeled vehicle that I can get my money out of.
I bought a bike to run around instead of runnin my trucks all the time, but if the prices keep going up, why bother? A lot of the younger generation, from what I have heard and read is staying in the nest longer, so they may not have the income, nor the space to keep something like a motorcycle, that or they are simply not allowed to have such a "dangerous thing" while living under a parents roof.
I just hope that motorcycling doesn't die. I think we can save it. and I hope we do.
Image

Mainah
Posts: 2163
Joined: Thu Jan 10, 2008 1:51 pm
Location: Augusta, Maine
Contact:

Re: The Motorcycle Industry Is Dying

Postby Mainah » Mon Jul 17, 2017 8:21 am

Those of you who know me know that I can't let this issue go without comment. I've been busy enjoying my motorcycle and my Jeep which has kept me from the keyboard but I have decided to post this (probably too long) response. So I've had three cups of coffee this morning and here we go.

Fewer young people are getting driver's licenses. So there are fewer able to get Motorcycle licenses.

The automobiles are being manufactured with more safety features while motorcycles by their design cannot be.

There is an obsession with safety. In all previous centurys there was a spirit of adventure and a little danger was part of that. The only ones who continually told us “to be careful” were our mothers.

In recent years news media report every death and injury with great fanfare. From a young age children have been cautioned against doing anything dangerous. In most schools playing games such as dodgeball or even tag is discouraged or even banned, some even stopped outdoor recess fearing a child may skin their knee. How in the world can anyone raised in this environment even consider getting on something as deadly as a motorcycle?

When many of us began our love of motorcycles they were a freedom machine of sorts. The only thing we needed to do was walk out of the house, get on out bike, give it a few kicks to start, put on our Ray Bans and off we went on an adventure. I know some will disagree with my next statement. These days the prevailing opinion is that before you get on a motorcycle you must dress like a knight preparing for a joust. Helmet, armored jacket, pants, boots, gloves and even Kevlar lined skivvies. If that doesn't take the spontaneity out of a ride, I don't know what will.

Before you dismiss that statement as insanity, consider this. The two states with the most riders per-capita are South Dakota and New Hampshire. Both of those states not only have outstanding scenery but also allow riders over eighteen to choose whether to wear a helmet. From experience I can verify that every weekend with riding weather New Hampshire roads are covered with bikers, many from neighboring “helmet law” states who come to ride free.

If you haven't become tired of my rant, there are a couple more issues that may have contributed to the decline. First, we are coming off a ten year recession and it will take some time for many to regain the financial stability they need to take on a large purchase like a motorcycle.

The other is that there are now more things competing for those motor-sport dollars. ATVs, UTVs, PWDs, snowmobiles in the North and 4wd vehicles. For a young couple with a family, even if they have the money for a motorcycle many are opting for a 4wd vehicle. I have joined a group of Jeep enthusiasts and several have sold bikes because they can load the Jeep with family and enjoy a day in the woods. All this and the recreational vehicle is their daily driver year round. Unlike a motorcycle, sometimes it is the only vehicle able to cope with the weather.

There you go. Now to decide, take the bike for a ride or the Jeep.
It's never too late to have a happy childhood.


Image

User avatar
WCLamb
Staffer
Posts: 5342
Joined: Sat Nov 01, 2003 9:11 am
Location: Mullica Hill, NJ USA
Contact:

Re: The Motorcycle Industry Is Dying

Postby WCLamb » Mon Jul 17, 2017 11:48 am

Mainah wrote:"Those of you who know me know that I can't let this issue go without comment."...

All valid points you've made, Rick, but what I see -- based on your commentary -- is there is no reasonable solution to affect or change the points you've raised -- at least none that can be remedied by any of us. The times keep on changing and when the changes are cultural like we've seen, it takes generations for the culture to revert -- if the culture ever does. We may be the end-point of a culture we were comfortable with. And with that said, we may be "the last of a dying breed."

It's a sad thought that the pleasure we derived from our hobby may never be experienced by the generations to come. Even though we see fellow riders on the highways, their/our numbers continue to diminish, and as a percentage of the population, we were never that great an influence over the rest of society to begin with. Alas, the number of those who share our spirit for riding will continue to fall by the wayside until the few riders that are left behind -- will be relics of the bygone past.
Image
Image

Dragonglide
Posts: 732
Joined: Sun Apr 03, 2011 3:28 pm
Contact:

Re: The Motorcycle Industry Is Dying

Postby Dragonglide » Mon Jul 17, 2017 1:25 pm

Isn't the whole point of not being safe all the time to show how much you need to live?
Image

User avatar
Ryck
Posts: 661
Joined: Mon Mar 17, 2008 5:28 pm
Location: New York City, NY
Contact:

Re: The Motorcycle Industry Is Dying

Postby Ryck » Wed Jul 19, 2017 6:08 pm

Dragonglide wrote:A lot of the younger generation, from what I have heard and read is staying in the nest longer, so they may not have the income, nor the space to keep something like a motorcycle, that or they are simply not allowed to have such a "dangerous thing" while living under a parents roof.


That's an important point. The bike manufacturers have forgotten about that demographic. The affordable bikes that that younger generation could afford are very few and lack luster. They opt for nice used bikes with engines and performance that's no-doubt larger than their inexperience can handle leading them to bad habits, if they survive.

Also troubling is that a number of them group with similar knuckleheads forming cliques out-stunting each other on public roads.

Dragonglide
Posts: 732
Joined: Sun Apr 03, 2011 3:28 pm
Contact:

Re: The Motorcycle Industry Is Dying

Postby Dragonglide » Wed Jul 19, 2017 6:25 pm

80 THOUSAND DOLLAR pick up trucks and 30000 Thousand dollar motorcycles... Something wrong here? !! I think so.
Image

User avatar
Ryck
Posts: 661
Joined: Mon Mar 17, 2008 5:28 pm
Location: New York City, NY
Contact:

Re: The Motorcycle Industry Is Dying

Postby Ryck » Mon Jul 24, 2017 1:55 am

Dragonglide wrote:80 THOUSAND DOLLAR pick up trucks and 30000 Thousand dollar motorcycles... Something wrong here? !! I think so.


It's called "living in a bubble". A lot of people, both high and low, are living lives divorced from important realities.

The sad part is that the Decision Makers that make the wrong decisions at these factories are the last to go when reality bursts their bubbles.


Return to “General”

cron