Urbanisation, outreach and innovationWe were still waiting for ACEM to confirm the final sales results for Europe for the 2016 full year period as this edition went to press, but based on their statistics to the end of November 2016, it looks like new motorcycle registrations in Europe will have grown by around +9 percent by the end of the year.
That said, the figures for the first 11 months of 2016, to November (as seen on the front cover of this edition of IDN), may be a better guide to what really happened for the year. Those figures show growth of +8.3 percent, and though somewhat affected by the advance registrations of Euro 3 inventory (before the new regulations came into effect on January 1st), they aren’t as hugely distorted in the way that the December statistics are for markets such as Germany, UK, France and Spain.
As the dawn of the Euro 4 era loomed large in the mirrors, OEs and dealers sought to make sure that unsold carry-over inventory was securely pre-registered by the December 31st deadline, so it could still be sold in 2017, even if at a discount and, technically, as pre-owned machines.
Whether or not it will prove to have been a financially viable exercise in registration and regulation manipulation remains to be seen. The experience of the past decade appears to suggest not. It has been a decade in which emissions compliance (and safety) have matured as factors that play well among new consumer groups – especially the increasingly important new generation younger rider and family riding consumer groups.
It may be then that manufacturers (and some of their dealers in some cases) may just have to suck it up and “take a haircut” on this occasion where the “unsolds” are concerned.
We need not let that detract from the good news though.
Deck the Hall with boughs of holly, sing it loud and sing it proud – 2016 has been our third straight year of meaningful growth in new motorcycle registrations (even if lower value PTWs remain soft) following the bottom of our excruciatingly wide U-curve having been traversed at a nadir of 781,762 units in all European markets (EU and EFTA) in 2013.
As Stephan Schaller and Antonio Perlot (ACEM President and General Secretary respectively) would no doubt immediately point out, that still leaves us with around half the size of the market we had before the banking industry got caught with their balance sheets trapped in a black hole.
‘only half can grow beards’
Having managed to turn the machine around and start it moving in the right direction, the momentum must be maintained and the road continuously ploughed to give our industry the clearest possible run at exploiting the issues such as congestion, handling, ergonomics, emissions and safety that continue to become our friends rather than our weaknesses as we seek customers new.
With most of the market’s principal players, including those from Japan, either starting to show the signs of turn-around or, in the case of the likes of BMW, Ducati, KTM and others, piling up the records, it is timely to reflect that actually, just as it is with dealerships (franchise and otherwise) and aftermarket parts and accessory vendors, the number of fatalities we have seen has been irrationally low in real terms – relative to the wholesale slaughter of a greater than 50 percent loss of the most valuable sales.
There have been casualties - Victory and EBR (again) just recently – and the small displacement manufacturing sector (especially in Spain) has had a torrid time of it, as has the United States.
The market in the U.S. started to recover from the recession, with three or four years of modest overall annual unit growth for domestic manufacturers and importers. Indeed, Harley-Davidson and Polaris saw their share prices recover from around $8.00 in late 2009 to the dizzy heights of around $70.00 and $135.00 or more respectively; until that recovery started to stall around 36 months ago.
Polaris’ decision to drop Victory production in favour of better ROI chances with Indian, and Harley’s stated aim of injecting 50 new models into their offer in the next five years, are both dramatic steps from manufacturers who are quite openly targeting international sales as their lifeboat, just as Triumph, Ducati, KTM and BMW in particular look to grow increased shares in the sectors of American consumer demand that the domestic manufacturers fail to speak to.
There have been demographic changes in the USA, but they are not yet the same ones that have been seen in Europe. The USA continues to lag where the impact of the ever more intense urbanisation is concerned. It will come though. With the OECD projecting that 70% of the world’s population will be living in urban areas by 2050, it is a bullet that manufacturers there won’t be able to duck, even in the wide open spaces of their continental sized market.
Increased urbanisation in the United States, and the gradual domination of more environmentally conscious generations of consumers, may well be among the factors that finally see the U.S. market brake the shackles of an historically static less than 4 percent of those of riding age owning or using a motorcycle, compared to Europe’s nearly 10 percent.
The changes that have been shaping riding in the United States this past decade have, so far, manifested as a belated recognition that the discretionary leisure Dollars that women, Hispanics, African Americans and other previously overlooked so-called minority customer groups have at their disposal are just as green as anyone else’s, and work just as well in the market’s cash registers.
Our trade associations (the IVM in Germany especially) and manufacturers have been doing a good job where “outreach” is concerned, but they can never do too much. We need to wake up and realise that only 50 percent of our potential customers can even grow beards.
Wherever we do find the energy to fuel the momentum, the importance of OE innovation and investment remains as ever critical. In Europe, in particular, and in Munich and Bologna especially, the OE’s refusal to reach for the R&D off-switch during the recession has, frankly, saved our asses!
