Thursday, 15 February 2018


European Union new motorcycle registrations -9.5 percent in 2017; or were they up by +2.5 percent?

The Brussels based international motorcycle industry trade association ACEM has released provisional numbers for 2017 new motorcycle registrations in European Union countries.
The data shows registrations of 913,445 internal combustion engine motorcycles for the 12 months to December 2017, which, compared to the 1,009,678 registrations officially recorded for 2016, would mean that the past year saw a decline in the region of -9.5 percent - the first decline since the market bottomed out at 748,529 registrations in 2013 and bringing an end to three consecutive years of growth.

However, as is widely accepted, the final quarter of 2016 (if not longer in some markets) saw a rush to get excess and unsold 2016 Euro 3 inventory pre-registered before the midnight December 31st cut-off, after which only Euro 4 compliant models could be registered.
Research carried out by International Dealer News suggests that this affected at least 50,000 motorcycles, probably more like 55,000 to 60,000, with the figure possibly as high as 65,000 units.
These units mostly went on to be sold by dealers in the first three or four months of 2017 as zero mileage pre-registered motorcycles. This means that the 1,009,678 registrations figure recorded for 2016 and the +13.3 percent growth that suggests was overstated, and the figure for 2017 has consequentially been understated.
The figures show 803,122 registrations for a 7.3 percent growth rate in 2014 as the anecdotal evidence of an end to the fall in sales translated into hard statistics for the first time. 

 the post 2013 picture changes radically

The following year, 2015, that growth trend was confirmed with 891,369 registrations recorded for a very positive 11 percent growth rate.
However, against that trend, the 13.3 percent growth rate apparently recorded for 2016, while great if it was true and could be sustained, always looked like a statistical error.
Although those Euro 3 units became gradually less profitable as dealers got further into the 2017 new year, with them and their manufacturers having to increasingly incentivise the units to get them sold (free extended warranties, improved insurance deals, zero percent finance, accessory packages etc), once sold, they nonetheless represented a new unit sale as far as the dealer and the buyer were concerned and, of course, artificially deflated the potential demand for the new Euro 4 inventory.
It may well be that very little of that Euro 3 carry-over inventory got sold at list price and that most of them were sold much closer to dealer costs. Indeed, by the time we were into May, it may well be that dealers were taking an effective loss on those bike sales and that, ultimately, some thousands of those units were “moved on” through the channels to be sold by so-called “grey importers/dealers” or through the cross-border used motorcycle retail network.

However, if the lowest possible of the figures is used - 50,000 Euro 3 units sold at above dealer cost through authorised or franchised dealerships - then the post 2013 picture changes radically, and the “real world” number of low single digits growth for 2017 that had been unofficially cited by at least three of the major market trade associations becomes a more reliable estimate of the 2017 market and the ongoing post-2013 trend.
At 50,000 fewer, the more realistic sales number for EU markets in 2016 is around 960,000 units, which, compared to 2016, shows a more realistic growth rate of 7.7 percent for 2016 following the 11 percent seen in 2015 and 7.3 percent seen in 2014.
If those 50,000 Euro 3 units are more accurately recorded as 2017 sales, then, at worst, 2017 was essentially “flat” with some 4,000 additional units sold over 2016. This recognises the widespread anecdotal feeling in the industry that 2017 was a “good year”; any year that sees the market hold on to the 20 percent growth seen in the prior 4 years (given where market trends had been in the period between 2008 and 2013) must indeed be regarded as a “good year”!

 “If those 50,000 Euro 3 units are more accurately recorded as 2017 sales, then, at worst, 2017 was essentially “flat” with some 4,000 additional units sold over 2016”

In fact, that 50,000 unit adjustment is on the light side - it is a very cautious estimate. In truth a figure of 55,000 is likely to be much closer to the reality of the situation and that would bring the market much closer to where anecdotal evidence suggests the sales number should be, at +1.4 percent; indeed at 60,000 Euro 3 sales in 2017, the market would have grown by +2.5 percent at 973,445 units sold, up from a more realistic figure of 949,678 units in 2016.
This would mean that the 2014 growth of +7.3 percent was followed by +11 percent in 2015, then +6.5 percent in 2016 and +2.5 percent in 2017. This is trend data that is much closer to the unofficial estimates being cited by some of the major market trade associations and manufacturers, and more in line with anecdotal evidence from dealers and the parts and accessory sector.
Indeed, although Japanese motorcycle brand sales are only part of the European equation, and nothing like as large a percentage of the market as they were a decade and more ago, an analysis of the Japanese made motorcycle export data issued every moth by JAMA, confirms the central thesis - namely that the 2016 registration data is distorted by Euro 3 inventory pre-registration and that therefore 2017 market performance is better than appears to be the case.

In fact, off the record, one major European motorcycle industry trade association General Secretary that IDN spoke to recently thought that even the 60,000 number was probably still an underestimate of the effect.
The significance of this isn’t in the numbers as such, because either way approximately the same number of units were sold, one way or another, over a 24-month cycle.
However, in a world where perception is a critical driver of consumer confidence, it is much more appealing for consumers, especially younger consumers and new entrants, to want to be involved in a growing market than in one that may be open to being interpreted as being “yesterday’s news”.
The moped sector is undergoing its own Euro 3/Euro 4 moment now, with the regulations coming into effect 12 months later. Which probably explains the equally counter-intuitive 2017 new moped registration data also released by ACEM.
From a recent high of 588,853 units registered in 2010 (actually, itself a figure much reduced from 2007 and before, as a result of the financial crisis), moped registrations have been in steady decline year-on-year.

 “This is trend data that is much closer to the unofficial estimates being cited by some of the major market trade associations and manufacturers”

The 2016 figure of 316,662 marked a near 14,000 unit decline on 2015 (down by -4.2 percent) and a loss of more than 270,000 units sold annually since 2010 (-46.2 percent).
In that context the apparent 2017 growth of some 82,000 units for a +26.1 percent moped market is clearly counter-intuitive. The rate of decline in new moped registrations has slowed in recent years (the market lost some 36,000 units between 2014 and 2016 compared to some 236,000 units between 2010 and 2014), so in all probability 2017 moped sales were flat or modestly down and the 2018 data will reveal a similar 2017/18 regulatory delayed aftershock to that seen in the motorcycle data for 2016/17.
In other news, the number of internal combustion engine quadricycles registered in the EU in 2017 was down by -31.4 percent at 48,427 units from 70,578 in 2016, following steady growth of two or three thousand units a year for the period 2013 through 2015 and a 10,526 growth between 2015-2016.
The electric motorcycle market continues to lag significantly behind demand for electric mopeds, but even those registrations show how juvenile the EV PTW market still is in Europe.
In 2017, 4,121 new electric motorcycle registrations were recorded; up +17.9 percent from 3,496 in 2016, 2,230 in 2015 and 1,995 in 2014.
Electric moped registrations were 27,029 units, which is up dramatically (+138.3 percent) from the 11,342 registrations recorded for 2016 as ride share schemes and incentives take effect, and new generations of more powerful Pedelecs come onto the market (there were 9,227 electric mopeds registered in 2015, 7,948 in 2016).
Some 3,242 electric quadricycles were registered in 2017, down -54.8 percent from 7,167 in 2017, which is itself up 93.9 percent from the 3,696 recorded in 2015; and we here at IDN think that it can be safely said that this particular trend is not triggered by changes in emissions compliance standards!