2013 – How was it for you?
As the motorcycle industry comes to
the end of another testing year, it is worth taking the time to think back over
the past twelve months, but to do so in the context of the year(s) to come.
Towards the end of 2012, industry
analysts had been predicting that there were early signs showing that the rate
of decline in new motorcycle registrations in Europe was, at worst, slowing,
and that maybe by the end of 2013 there might be some small pockets of growth
in some European markets.
Overall, I don’t think the year has
gone as well, in new motorcycle registration terms, as many had hoped, and
there has certainly been no perceivable bounce in pre-owned motorcycle demand
and prices in the key markets.
However, led by the aftermarket,
which has, no doubt, had a slightly better year than had been feared, we do
arrive at the end of 2013 with some positive indicators.
As reported in International Dealer
News in December, the parts, accessory and apparel industry, if not exactly
brimming over with confidence, was a lot more positive about the year ahead at
the Milan show in November than had been the case at any time since November
2009 – which was when the full impact of the global economic crisis finally
started to affect all businesses in our industry.
In new motorcycle registration terms,
most good news (mostly mixed news really), needs to be judged in terms of the
awful downward spiral of sales that we started to see in 2009.
To put that in context, while many
are pointing to the industry having effectively halved since then, market
performance has actually been worse than that – total new PTW registrations in
Europe were a shade under three million units a year as recently as 2007/8.
While we await the final statistics
for 2013 as a full year, at best we are going to close out 2013 with total PTW
registrations in Europe sitting at a tad over 1 million units.
As suggested, it is context and trend
that is king at this time, and in the final months of the year we have seen
some key markets return to growth, some key markets sustain modest average low
single digit growth throughout the year (in motorcycle terms at least) and,
France aside, the two other primary Mediterranean markets (Spain and Italy)
have either returned to growth (in the case of Spain) or seen the rate of the
decline start to somewhat level out (as is the case in Italy).
Other good news this year centred
around the outcome (announced in late 2012) of the most recent three-year cycle
of concern surrounding EU regulatory impacts. This year has seen the minutia of
procedures rumble through their stages, and as we end 2013, it looks like
common sense has continued to prevail.
Credit is due to ACEM, the Brussels
based industry association, FEMA, the Brussels based riders rights lobby group,
and indeed to certain elements within the EU itself for resisting some of the
wilder proposals that have been floated. Regulators have successfully
combed their obligations to promote safety with realism about what it is that
motorcycle consumers actually want to consume, and about what manufacturers can
produce at anything less than heart attack pricing.
Within the EU, within the European
Parliament specifically, a huge thanks is owed to Dutch MEP Wim van de Kamp,
who is the European Parliament’s rapporteur on motorcycle affairs and as such a
very big wheel on the internal markets committee (IMCO) that has been in the
vanguard of finalising the latest generation of regulations.
Van de Kamp is (fortunately) a rider
of many years standing, and as he gleefully described himself at the recent
ACEM/EICMA conference in Milan he is one of those “bloody politicians” who not
only takes what he is doing with suitable seriousness and a great deal of
personal interest, but, sometimes to the chagrin of colleagues, sustains that
interest and a monitoring brief long after other politicians have leapt for the
next greasy pole or given up and gone to the bar.
While the prognosis for the
motorcycle industry maybe one of ‘condition stable but still serious’ rather
than ‘critical’ as we go into 2014, in macro-economic terms the early
stages of consumer feel-good factor suggesting that the worst is behind us
(especially in the Euro currency zone) is now being talked-up; indeed the
once widespread agenda-shaping fears about the stormy waters ahead for the
single currency project also appear to have abated.
However, very few of Europe’s media
(financial or otherwise) and even fewer of Europe’s economic analysts (be they
bull or bear) are being completely honest with the public about some of the
underlying dangers that still exist.
Europe remains one shock away from a
deflation trap, and China continues to hover perilously close to its own
banking crisis.
In the United States the Federal
Reserve has now announced that it is going to start winding down its programme
of monetary stimulus, and while this has not, in the short term, been met by
the dramatic drops in stock prices that had seemed likely as recently as
October and November, the trend in Producer Price Inflation (PPI) is an
indicator that should be getting much wider and more detailed attention and
scrutiny than is currently the case.
Excess industrial capacity in China
is exporting deflation across the world. Factory gate prices are falling in
China, and given the labour force cost increases (among others) in China,
there is the making of a massive profits squeeze ahead.
Europe’s slide towards deflation
could replicate what happened in Japan at the onset of its “lost decade”.
In parts and accessory terms, 2014 (and beyond) should see continuing
modest growth for those who have got the right products, at the right
price, in the right place - 'mixed channelling' will continue to evolve as
the market's historic distribution patterns and retail habits continue to
respond to the same 21st century pressures that is affecting so many markets
and industries.
It is tempting to hope that the linkage forged in downturns past between
demand for aftermarket product sustaining or even growing as new model buying
is delayed and older bikes have ever more miles squeezed out of them, but it is
difficult to be sure whether the old 'received wisdoms' are valid anymore - so
far the pre-owned market has not proven robust in the face of the shrinking
number of new model sales. Maybe its time is about to come!
At present there is still over-supply in the food chain, and, as seen by
the recent issues at once mighty players such as LeoVince/Sito Group and the
rump of the often troubled Hein Gericke operation, the blood-letting is not
over yet.
Whatever it is you hope for in 2014, and however you intend to go about
achieving it, all of us here at International Dealer News wish everyone in our
industry and all the millions of people who buy, use and enjoy our products all
the very best for the year ahead.
