The Motorcycle Industry is Dying - Bloomberg

[Craigar]

Interesting article of the ever changing landscape of the motorcycle industry.

https://www.bloomberg.com/news/articles/2017-07-05/can-millennials-save-the-motorcycle-industry

 

[bigjohnsd]

From what i can tell this article is not to far off the mark. Glad I was in the business when I was, more glad that I'm sitting on the sidelines watching today. Without ATV's and Side by Sides most Motorcycle dealers would be under.

 

[MCRIDER007]

Its pretty apparent that motorcycle riders are an aging group simply because so few new (young) riders are buying bikes and a much of that is because of the very limited (affordable) entry bikes that were available on the US market for the last 25 years. Yes, there more entry level bikes than there were 5 years ago but they are still way to expensive for most entry level buyers to buy. I don't know what the solution is because even if the builders and dealers were to sell entry level bikes at cost they still may be too expensive for most entry level buyers.

 

[Bill Lumberg]

Young riders don't want a land yacht, and can't afford one, in most cases, anyway. We're talking about people who have an iphone and earbuds, and don't even wear a watch, much less need bags. Different mindset. Hell, my first bike was a honda nighthawk. Minimalist transport and escape through riding appeals to the young demographic. We just happen to be sort of the exception for our demographic in that we are more concerned with miles than with trailering or dressing up.

 

[bigjohnsd]

Seems like all the automation and technology have not reduced the cost of production of entry level bikes. What used to cost $5,000 now costs $9,000.

 

[Spud]

Yes this is a generalization, but youngsters these days just care less about such things. Stick shift cars are all but dead, and if you know how a clutch and manny tranny work then doing it on a bike after doing it in a car is easier. I was in Pittsburgh this week and saw an Uber self-driving car. Many young people dream of not even having to drive a car, let alone doing something like riding a motorcycle. Disney predicted the future:

 

[Ignacio]

Seems like all the automation and technology have not reduced the cost of production of entry level bikes. What used to cost $5,000 now costs $9,000.

I disagree. You don't account for inflation for one thing.

I looked over FJR prices several years ago, adjusted for inflation, and today's FJR is about the same price as it was in 2003 adjusted for inflation...and has significantly more features including ABS, more refined, and even active suspension with the latest year at least.

 

[TomInPA]

Seems like all the automation and technology have not reduced the cost of production of entry level bikes. What used to cost $5,000 now costs $9,000.

It just seems a motorcycle is of no interest at any price. Both the new and used markets show this. The problem is not based on economics, but interests. The way things are going, the interest in private ownership of automobiles is even declining. There are significant prerequisites to motorcycle ownership, including special training and licensing. The perception of safety issues is valid, and as a result motorcyclists tend to be more risk tolerant than the general population.

For the average person, motorcycle and Harley are synonyms. Not everyone wants to dress like a pirate and ride in a parade. That is all they know about except for some hooligans that stunt ride and assault regular motorists. You may have noticed the average FJR rider is invisible.

 

[hppants]

I just hope Yamaha keeps making the FJR for about 30 more years. I could buy a 2047 at age 81 and nurse it for about 6 or 7 years. I guess at that point, perhaps 4 million miles in (if I play my cards right), I guess I'd had a good run....

 

[Uncle Hud]

While my sons and daughters-in-law know how to drive stick shifts, they're buying automatic transmission cars, or electric cars with no transmissions. It's not easy to locate a car or truck with a manual transmission these days.

My kids are also in their child-bearing years and would never consider riding a motorcycle. (I gave up riding to raise them.)

It may very well be true that self-driving cars dominate the US in twenty years. Where does that leave us, the folks that enjoy driving and riding and shifting gears?

 

[Bugman]

Here are some Alternative Facts for you! https://www.foxnews.com/auto/2017/05/05/most-popular-motorcycles-among-millennials.html

A Motley collection of statistics https://www.fool.com/investing/2017/03/05/7-motorcycle-statistics-thatll-floor-you.aspx

 

[El Toro]

I get a kick out of the price debate. When I worked in a dealership we sold 900 bikes a year in a state with a 6 month riding season. Dealers who can move 450 a year are big time operators today.

Entry level but road ready 125 cc machines were available for under $500 OTD. Intermediate bikes like 250 and 350 cc machines could be had for under $1000 OTD. A monstrous bike, like the CB750 was introduced at a price of less than $1200 and stayed under $1500 OTD for years. Other bikes, like the big British stuff, were similarly priced.

Even HD had cheap options from Italy. Rapido, Scat, Sprint were all modestly priced. Ducatis and BMWs were more, but not dramatically so.

Traffic was a lot less of a problem. There were few roads where sustained speeds above 70 mph were common.

My boys, both approaching 40, would not consider one. Motorcycles are luxury items in their view.

 

[Knifemaker]

I don't think the industry is dying....it's just leveling off

There are quite a few bikes you can buy new for under 8K. Some around $6000. Go try and find a new car for those prices. And many are still attracted to motorcycles for their gas mileage.

Looking at good used bikes, they are still pretty cheap (figuring in inflation) I bought my Bonneville (new) for about 7 grand. It's also quite popular with the hipster crowd it seems. I don't count figures on new bikes sold, look instead at bikes registered each year....the numbers aren't going down.

But yes, many people are tired of driving. Just owning a car (or bike) is a hassle to many now. They can see how poor of an investment one is. And I have to agree with them. If I lived in the city (and worked there) I'd likely own a small displacement scooter...if I just didn't want to ride a bicycle or take public transport.

But there are, and always will be, those attracted to two wheel machines.

"As of the most recent report by the Department of Transportation, there were 8,410,255 motorcycles registered in the United States by private citizens and commercial organizations in 2011. To put this staggering number into perspective, out of every 36 people you meet in the U.S., one of them probably has a motorcycle."

Also....name your favorite motorcycle ad on TV. "Well there's that Honda one where ...wait....that was a car ad.." I watch a lot of TV and I've never seen an ad from a motorcycle company since 1974. The only ads I've seen were on places like the Speed Channel...during the airing of a motorcycle race.

Saw no ads during the Super Bowl ... late night I think I saw an ad for a local Harely Dealer at 3am...but I could have been dreaming. . Seems if you want to increase sales you'd need to advertise. Think how many bikes you might sell to women (an increasing market) If you had an ad showing Wonder Woman beat up some bad guys in an alley and then say to some woman on the street getting off a bike as she walked away "Nice bike"

I understand the Big Four might not have the sales volumes that car companies do to pay for television spots, but you'd think they'd squeeze one or two in a year and not just during motorcycle related programming.

And some interesting stats...although the amount of registered bikes has risen, the fatality rate has gone down:

https://crashstats.nhtsa.dot.gov/Api/Public/Publication/812292

 

[Uncle Hud]

Funny, but scooters seem to be the ride of choice among Atlanta's in-the-city millennials. Not sure why, unless it's the image they want to portray -- like the cafe racer crowd of "cool kids" on vintage bikes under 750cc. A good many of the cafe crowd wears half-helmets with scarves, and it's disconcerting, frankly, to see these time traveler images in real life.

I suppose the scooter has a little more built-in storage for purses and bookbags, and seems less anti-social when parked on the sidewalk beside the bicycle rack. FWIW, my FJR looks pretty cool parked beside the bicycle rack.

 

[Laser Dude]

I wouldn't write off the industry just yet. That chart is a perfect match to all the other charts from the 2008- time frame. We went into a recession and the last thing to recover is going to be luxury items. That chart matches boat sales, for instance.....

https://www.statista.com/statistics/184637/retail-value-of-new-and-used-sterndrive-boat-sales-between-2000-and-2009/

If/when people start having more money, you'll see those things go back up.

 

[BigOgre]

From CNBC yesterday:

Millennials don’t like motorcycles, and that’s killing Harley’s sales

 

[Uncle Hud]

My guess is that Alliance Bernstein (the market analysts) have shorted a BIG bunch of Harley-Davidson stock, and are trying to get its share price to dip a few points.

 

[Geezer]

From CNBC yesterday:
Millennials don’t like motorcycles, and that’s killing Harley’s sales

From what I can see, most young people are not enthusiastic about driving cars either. They seem to wait longer before getting a driver's license and generally think of motor vehicles as nothing more than transportation. Hence the interest in self-driving vehicles. It is a major culture change. Not every millennial fits the stereotype, but it is an important factor that will, over time, affect the vehicles available and the laws of the road.

 

[El Toro]

These "kids" have, often through their own choosing, accumulated unprecedented debt associated with schooling.

I won't discuss the root motivations or facilitating factors since I'd get a warning if I did.

But their school debt is a major factor in their lack of interest in fancy or fast vehicles.

24 year olds (they often take 6+ years to earn a bachelors degree) may be prepared for a career with a $30k starting salary and be saddled with $100k in unbanktuptable debt. Death is the only escape.