A motorcycle industry crisis? Your thoughts

[awa355]

At a rather simple level...wonder if the weather had/has much to do with it? If I lived in somewhere with nearly year-round sun...I doubt I would use anything BUT a motorcycle to get around.

I would use my bike for all my travelling, but on night shift through a Waikato winter, and having to wear a uniform, the car makes more sense. Especially with the fog that comes down just before finishing time. When I retire in four years time, I will sell my car, we'll keep the wifes car and I will pick up a new scooter or small bike for all of my transport.

Have just spent 3 days riding around Taranaki and saw very few bikes on the roads.

[Badgermat]

To some extent, Brett, I think you're half way to answering your own question (or you seem to be from one of your posts).

The real approach for bike manufacturers is twofold: 1) new markets for old products; 2) new products for old markets.

For the first, there is still a huge market out there for utility motorcycles. Asia, Africa, South America; all these places are crying out for affordable transport, and bikes could be a major part of that. China and India are already well-developed markets (hell, Indians are making and buying KTMs in vast numbers). Between them they represent 2.5 billion people, that's about five times the size of the US, Europe, Japan Australia and NZ combined. Add in 1.5 billion across Africa and South America and you can see that market potential is still vast.

For the second part, manufacturers need to adapt their products to the mores of a leisure market. This means paying more attention to fashion and less to engineering (sad to say). Current bike marketing is all about bigger, faster, better, with a minor interest in prettier or different. In the future these latter considerations will be far more important (particularly given that engineering-wise there are very few bad bikes these days ... everything is pretty competent). Add to that the social shift to transport as an appliance, and the need to focus on smart, urban transportation and most of the current products are looking a bit, well, past it.

The one country that seems to have a grasp of all this is China. They're producting small, simple bikes and scooters for low-cost urben transport, and vast numbers of more style-oriented bikes based on the same platforms (think of the Skyteam baby cafe racer and super motard things). This is where the big sales will be.

None of this is particularly palatable to enthusiasts, but I suspect it reflects the reality of staying in business in the modern world.

m

[bosslady]

Make motorcycles look cool nice loud bikes that make ya look "boss"! doesn't help that it's harder/takes longer to get your licence I imagine. Wish their were more advertising for bikes even if in tv shows. Wish I knew how to make people realise how cool bikes are! a lot of people are too scared anyway, used to bein wrapped in cotton wool I reckon. And another thing! not much in the way of motorcycle gear for women that doesn't make you look like a frumpy fat tart. I've been looking at leathers for summer and all the sweet styles and colours only come in the men's gear. Not every girl wants pink crap!

[sketch]

it all comes back to convenience i rekn these days. ever tried eating a bigmac while riding a bike? yet a car has somewhere to put your supersized wendys cup

a car has somewhere to plug in your ipod, light and ash your cigarette, as much as your not sposed to you can make a phone call and send a text while your driving, even update your facebook, or apoligise for being mean to bosslady on tapatalk on the go, if its raining who cares chuck the wipers on

whereas on a bike you havta fight for your life constantly

peeps these days just want everything to be easy, with there mod cons and there "wipe my ass and make me toast" apps

as for me iv always wanted a bike since as long as i can remember, took me till i was 29 and a strange sequence of events till i got there

[Brett]

To some extent, Brett, I think you're half way to answering your own question (or you seem to be from one of your posts).

The real approach for bike manufacturers is twofold: 1) new markets for old products; 2) new products for old markets.

For the first, there is still a huge market out there for utility motorcycles. Asia, Africa, South America; all these places are crying out for affordable transport, and bikes could be a major part of that. China and India are already well-developed markets (hell, Indians are making and buying KTMs in vast numbers). Between them they represent 2.5 billion people, that's about five times the size of the US, Europe, Japan Australia and NZ combined. Add in 1.5 billion across Africa and South America and you can see that market potential is still vast.

For the second part, manufacturers need to adapt their products to the mores of a leisure market. This means paying more attention to fashion and less to engineering (sad to say). Current bike marketing is all about bigger, faster, better, with a minor interest in prettier or different. In the future these latter considerations will be far more important (particularly given that engineering-wise there are very few bad bikes these days ... everything is pretty competent). Add to that the social shift to transport as an appliance, and the need to focus on smart, urban transportation and most of the current products are looking a bit, well, past it.

The one country that seems to have a grasp of all this is China. They're producting small, simple bikes and scooters for low-cost urben transport, and vast numbers of more style-oriented bikes based on the same platforms (think of the Skyteam baby cafe racer and super motard things). This is where the big sales will be.

None of this is particularly palatable to enthusiasts, but I suspect it reflects the reality of staying in business in the modern world.

m

I have my own thoughts and opinions on the 'answer' or at least parts of it, but it is interesting hearing other people thoughts. I think to claim to have 'the answer' would be rather ignorant due to the plethora of influencing factors. My analysis has considered the leisure motorcycle industry separate from the transport industry largely because the study needed framing up lest it become a thesis or text book sized discussion, but in reality I don't think a responsible discussion on the industry could NOT consider the areas of overlap between the industries (leisure m.cycles/transport m.cycles). Bringing China and India into the debate opens a whole new can of worms, including the issue of competing with Chinese manufacturing IMO. The question of which of the manufacturers have the requisite core competencies to tackle the cheap transport market and not get burned, as has happened before, would need to be asked.

With regards to bike design...I feel that it is technical development that can keep a manufacturer at the front of the race. In an industry where we are down to small, incremental developments between models and manufacturers, even small improvements can make a difference. Although, it appears to me that brand loyalty and positioning is still a stronger selling point than the specs of the actual bike...(within reason).

[Brett]

And another thing! not much in the way of motorcycle gear for women that doesn't make you look like a frumpy fat tart. I've been looking at leathers for summer and all the sweet styles and colours only come in the men's gear. Not every girl wants pink crap!

You've just identified a good business opportunity...why not try and fill it?

[spanner spinner]

So...my question for this forum, is what do YOU think can be done to encourage more people to ride bikes?

Another question - Harley Davidson (whom I'm specifically reviewing as a company at the moment) have a product that is by-in-large aimed the 40+ age group and who have little connection (I think) to the younger markets have a dilemma to deal with...how do they engage with younger riders...what can they do? YOUR THOUGHTS?

I have been riding for 30 + years and have been working in the motorcycle industry for over 25 years in several different positions retail, wholesale both bikes and gear and as a mechanic, and have watched the industry shrink every year since the early 90's. Yes it is in crisis.

Bikes are toys, they are no longer transport haven't been since the cheep jap imports flooded into NZ. A reliable dry warm car can be bought for 3-4 thousand the same price as a entry level bike. The licence is harder to get than a car takes longer, the bike costs more to rego all done by a government trying to dissuade people from riding bikes.

In short there is nothing the average person can do to get more people on bikes, higher fuel prices do not get more people on bikes as there are to many other issues standing in the way. Most people once they find out about the licence issues and the fact they need to spend at least one thousand on gear if they want to ride every day drop the idea of getting a bike. Higher fuel prices just bring old bikers out of the woodwork, good excuse to con the wife into letting them get a bike again (but dear think of the money we can save on petrol if you let me buy a GSXR1000)

Most of the importers don't bring in what I would class as a commuter bike, most have dabbled on and off but they never sell well as there not "cool" so they go back to what they know will sell in a shrinking market.

The age issue that you speak of is a larger issue than most people realise as the 60 + riders are the people with the last of the disposable income, the 30 to 50 age group still usually have mortgages and out standing debits that the older group didn't have when they where the same age. This pushes the age out for the non riders in the younger group to return to riding meaning that there numbers will be less, yet another nail in the coffin of the industry.

As for the question you posed "Harley Davidson how do they engage with younger riders" they tried and failed. It was called buell and Vrod both which have failed to bring the customers they wanted. Harley are so tied to the baby boomers that they may fall with them.

Even if you look at the trends in the developing countries bike numbers are falling in percentage terms, Tata cars in India have been taking bike sales for years with there Tata Nano. if the car is similar in cost to a bike it will win out as pure transport. Most people that purely want transport will go for the cheapest most convent option. Cost is what use to bring a lot of riders to bikes in NZ who would then find out how much fun bikes where and then would go on to larger bikes and more riding, these conditions no longer apply to the NZ market and I would be surprised if they ever will again.

The only reason we have a bike industry in NZ is thanks to the fact that NZ farmers own shit loads of quads that the bike manufactures happen to make. If the quads where taken away (it could happen the US banned three wheelers and ACC keeps looking at the injury rate on quads) I believe that most of the importers would be gone in a couple of years.

The other issue that may be the next thing on the radar is the next generation of people who are driven by there on line life, these people worry all of the motor industry as they have no interest in cars or bikes and would happily drive (if that is the right word) a self driving car as this would free up more time for them to surf the net. They also have no interest in driving or riding for the pleasure of it, for them a car is purely transport and they also do less miles as they do more of there transactions on line meaning they have to travel less. Companies like mini have recognised that some of the older section of this group do drive at present and are targeting them on line. Current primary school students who have grown up with both a computer at home and pretty much unlimited data at a good speed due to only knowing broadband look at vehicles as transport not as something to excel to. There status symbol is the newest fastest new smartphone, tablet or the next must have electronic gadget. As bikes and cars get more expensive to run due to fuel cost, rego and road charges tolls etc and with emission controls adding to vehicle cost this may push more and more younger people more on line which will have a large impact on all of the motor industry, and as bikes are a smaller part they will show the impact first.

[Brett]

Analysis for those who care to read it...would be interesting to keep this discussion going. I have removed my personal details etc. from the analysis...just the content, lost a bit of the formatting...sorry, can't be arsed fixing it up.Attachment 282870

[Brett]

I have been riding for 30 + years and have been working in the motorcycle industry for over 25 years in several different positions retail, wholesale both bikes and gear and as a mechanic, and have watched the industry shrink every year since the early 90's. Yes it is in crisis.

Bikes are toys, they are no longer transport haven't been since the cheep jap imports flooded into NZ. A reliable dry warm car can be bought for 3-4 thousand the same price as a entry level bike. The licence is harder to get than a car takes longer, the bike costs more to rego all done by a government trying to dissuade people from riding bikes.

In short there is nothing the average person can do to get more people on bikes, higher fuel prices do not get more people on bikes as there are to many other issues standing in the way. Most people once they find out about the licence issues and the fact they need to spend at least one thousand on gear if they want to ride every day drop the idea of getting a bike. Higher fuel prices just bring old bikers out of the woodwork, good excuse to con the wife into letting them get a bike again (but dear think of the money we can save on petrol if you let me buy a GSXR1000)

Most of the importers don't bring in what I would class as a commuter bike, most have dabbled on and off but they never sell well as there not "cool" so they go back to what they know will sell in a shrinking market.

The age issue that you speak of is a larger issue than most people realise as the 60 + riders are the people with the last of the disposable income, the 30 to 50 age group still usually have mortgages and out standing debits that the older group didn't have when they where the same age. This pushes the age out for the non riders in the younger group to return to riding meaning that there numbers will be less, yet another nail in the coffin of the industry.

As for the question you posed "Harley Davidson how do they engage with younger riders" they tried and failed. It was called buell and Vrod both which have failed to bring the customers they wanted. Harley are so tied to the baby boomers that they may fall with them.

Even if you look at the trends in the developing countries bike numbers are falling in percentage terms, Tata cars in India have been taking bike sales for years with there Tata Nano. if the car is similar in cost to a bike it will win out as pure transport. Most people that purely want transport will go for the cheapest most convent option. Cost is what use to bring a lot of riders to bikes in NZ who would then find out how much fun bikes where and then would go on to larger bikes and more riding, these conditions no longer apply to the NZ market and I would be surprised if they ever will again.

The only reason we have a bike industry in NZ is thanks to the fact that NZ farmers own shit loads of quads that the bike manufactures happen to make. If the quads where taken away (it could happen the US banned three wheelers and ACC keeps looking at the injury rate on quads) I believe that most of the importers would be gone in a couple of years.

The other issue that may be the next thing on the radar is the next generation of people who are driven by there on line life, these people worry all of the motor industry as they have no interest in cars or bikes and would happily drive (if that is the right word) a self driving car as this would free up more time for them to surf the net. They also have no interest in driving or riding for the pleasure of it, for them a car is purely transport and they also do less miles as they do more of there transactions on line meaning they have to travel less. Companies like mini have recognised that some of the older section of this group do drive at present and are targeting them on line. Current primary school students who have grown up with both a computer at home and pretty much unlimited data at a good speed due to only knowing broadband look at vehicles as transport not as something to excel to. There status symbol is the newest fastest new smartphone, tablet or the next must have electronic gadget. As bikes and cars get more expensive to run due to fuel cost, rego and road charges tolls etc and with emission controls adding to vehicle cost this may push more and more younger people more on line which will have a large impact on all of the motor industry, and as bikes are a smaller part they will show the impact first.

Interesting comments, Will reply in greater detail when I have a moment.

[spanner spinner]

Quadrants are for squares.

FWIW.
H-D Aus recently recorded a series of best-ever months. Not 'since 2008' - but best ever sales.

Hopefully it's just taking NZ longer to emerge from the malaise?

Yes but the question is who bought them, if it was a bunch of 60 + riders it doesn't bode well for H-D if your client base is just about to progress to a mobility scooter for there next vehicle. May be this could be a new market sector they already make trikes to cater for there older demographic.

[Badgermat]

I have my own thoughts and opinions on the 'answer' or at least parts of it, but it is interesting hearing other people thoughts. I think to claim to have 'the answer' would be rather ignorant due to the plethora of influencing factors. My analysis has considered the leisure motorcycle industry separate from the transport industry largely because the study needed framing up lest it become a thesis or text book sized discussion, but in reality I don't think a responsible discussion on the industry could NOT consider the areas of overlap between the industries (leisure m.cycles/transport m.cycles). Bringing China and India into the debate opens a whole new can of worms, including the issue of competing with Chinese manufacturing IMO. The question of which of the manufacturers have the requisite core competencies to tackle the cheap transport market and not get burned, as has happened before, would need to be asked.

With regards to bike design...I feel that it is technical development that can keep a manufacturer at the front of the race. In an industry where we are down to small, incremental developments between models and manufacturers, even small improvements can make a difference. Although, it appears to me that brand loyalty and positioning is still a stronger selling point than the specs of the actual bike...(within reason).

I wasn't suggesting that I have THE answer, just that your own earlier remarks about China and India may be getting towards something that might be AN answer. At least to offer a future for manufacturers in an (apparently) declining western market.

That said, I don't think you can separate leisure motorcycling from utility motorcycling. Well, not unless you want to ignore a significant growth market. As a manufacturer, that would be perverse (if not unheard of), but if nothing else, it could be viewed as a cash cow that pays for more exciting leisure bikes.

On the other matter, while I completely agree that technical development is valuable, until there is a massive shift in technology (say, to electric bikes) most machines are substantially similar to the average buyer. At least in terms of performance, reliability, economy etc. In this situation, brand and other emotional considerations become more important.

While I haven't done any specific research in the bike industry, I have been involved in consumer surveys in the computer, telecoms, booze and car industries. I am constantly staggered at how closely people identify with the perceived values of specific brands and how difficult it is to get them to change. Obviously, this isn't quite the same as getting people to try something new, but it isn't that far away.

m

[McFatty1000]

I read an article sayigng that young people don't care about ownership of things anymore, it's all about the experience.

I think Jimi Hendrix was thinking the same.

Haha this is pretty much the exact reason I got my bike in the first place - wanted to do something new and buying a bike seemed to fit. To me, the whole appeal is riding for the heck of it, thats the experience.

[misterO]

A semi-related note: guys who thought it was cool to frighten their pillion have poisoned our sport. The young lass who clung for dear life as her fearless pilot pulled wheelies grew up, had kids of her own and Forbade them to have anything to do with motorbikes. Word to the wise: keep your passengers happy, always leave them wanting more.

[Brett]

I wasn't suggesting that I have THE answer, just that your own earlier remarks about China and India may be getting towards something that might be AN answer. At least to offer a future for manufacturers in an (apparently) declining western market. I did get what you meant, I was more referring to my approach to this as a bit of an open ended excercise

That said, I don't think you can separate leisure motorcycling from utility motorcycling. Well, not unless you want to ignore a significant growth market. As a manufacturer, that would be perverse (if not unheard of), but if nothing else, it could be viewed as a cash cow that pays for more exciting leisure bikes. I absolutely agree about the joint nature of the industries. I haven't looked closely enough into the utility motorcycle market, especially in asia, to make an educated comment at this stage...would like to though.

On the other matter, while I completely agree that technical development is valuable, until there is a massive shift in technology (say, to electric bikes) most machines are substantially similar to the average buyer. At least in terms of performance, reliability, economy etc. In this situation, brand and other emotional considerations become more important. Shit yeah, brand identity seems to be one of THE key influencing factors...or at least from what I am gauging! I also think you're right in that the differentiation between bike models (in comparable categories - ie super sport) is getting smaller and smaller every year)

While I haven't done any specific research in the bike industry, I have been involved in consumer surveys in the computer, telecoms, booze and car industries. I am constantly staggered at how closely people identify with the perceived values of specific brands and how difficult it is to get them to change. Obviously, this isn't quite the same as getting people to try something new, but it isn't that far away. No, I don't think it's far away at all...you're on the money...brand loyalty seems to be massive. HD have created a distinctive core competence and competitive advantage around their brand loyalty and customer centric focus. (To somewhat bastardize the definitions...) I kind've wonder at what point this doesn't actually become counter productive by causing an organisation to carry their cusomter base along with them when they try to evolve and innovate who they are...)

m

reply in red

[Winston001]

Brett - I think there are three quite different groups which need to be considered.

1. Older (choke) mature types who grew up on BSA 500s, Norton Commandos, and Honda 750/4s. The aphelion of this age was the Z1 900 Kawasaki. Or a Benelli or Ducati.

Still, most of us started on excellent machines like the Honda 200 Alan refers to or the XL175. Today we ride BMWs, HD, Ducatis, or scorching Japanese miracles.

2. Young people (NZ) want to get from A to B in a city and don't have much money and/or possibly they like the idea of motorcycling. So they get a scooter and enjoy themselves. Or they buy a trail bike and have lots of fun at weekends - but it is a toy, nothing more. The girlfriend isn't interested so they also get a car.

3. Those people living in Africa, China, South America, India, and Asia for whom a car is a dream. There are about 3 billion of them. They buy small bikes because that is what they can afford and thus represent a huge market.

The 1 and 2 groups are small. If motorcycle manufacturers are going to survive they will supply the growing Third World markets.

Incidentally when I was in India, Royal Enfield bikes drew admirers. They are way beyond the average people.