Our increased edition size – a good sign for the parts industry?As we head into the summer riding season, the new registration statistics from around Europe remain an uncertain market indicator.
The overall EU numbers from ACEM in Brussels, for the first quarter of 2017, as expected show the impact of the Euro 3 carry-over inventory pre-registration problem – as manufacturers, importers and dealers rushed to register thousands, indeed tens of thousands, 2016 production bikes before the January 1st deadline at which all new registrations had to be of the updated Euro 4 compliant models.
The result has been zero mileage pre-registered motorcycles choking showroom floor space and being offered at deep discounts with generous incentive packages.
This hasn’t been a serious problem everywhere, but it certainly has been for the ‘Big Five’ EU markets (Germany, Italy, France, Spain and the UK), and it certainly has affected the market’s centre of gravity for the first quarter.
However, the individual national trade association releases for April and, in several cases, May, showed that not only had Euro 3 cast a long shadow, but that some degree of market softness has started to affect sales.
Ironically, at a time when most broader economic indicators, particularly in much of the Euro currency zone, are showing that consumer confidence, incomes and spending is on the increase and unemployment coming down, gradually, in most of Europe, the motorcycle market appears to be on the edge of stalling.
It is hard to think of any other explanation. Most of the licensing and training issues, though still challenging, are pretty much unchanged in the last 24 months. Also, to judge by the attendances at the growing number of “New Generation” bike shows and outdoor events that are proving increasingly popular in Europe, I’m not sensing any major sea change in the gradually growing popularity of riding in general - especially not in the robust adventure touring and urban mobility sectors - despite the softness in the scooter and moped statistics.
Indeed, among the emerging generation of “Millennial” consumers, the theoretical synergy of their predisposition for individual self-expression in a social rather than isolated context, appears to continue to commend motorcycling as a viable, fashionable and motivating transport option and lifestyle choice.
What is more, the innovation we are seeing in terms of rider communications, safety, connectivity and many other forms of technology, suggests that we, in fact, are still only at the start of that upward curve – there’s no question that the direction of the travel of the motorcycle ownership and riding experience is being in equal part driven by, and driven to meet, the lifestyle and transport expectations of these new, young consumers.
As they age and go through the same evolutionary cycle that saw the children of the fifties, sixties and seventies become high value and acquisitive boomers, the post digital watershed generations appear to be natural born candidates for the motorcycle’s own evolving offer.
The socially rejective and largely negative ‘vibe’ of the Gen-X pre-Millennials evidenced characteristics that saw them rebel the other way, away from anything that was even vaguely associated with the consumption and lifestyle choices of their parents and grandparents.
What goes around really does appear to be coming around again now though, with the equally decisive “rediscovery” of two wheels, and as such it is therefore hard to think anything other than that either everyone has hugely underestimated the Euro 3/Euro 4 impact, or overestimated the improvements in incomes and employment rates among younger, 18-34 consumers.
The fact though is that despite all the auguries, the market still remains much smaller than it was in 2008. As Stephan Schaller (CEO, BMW Motorrad, and retiring president of ACEM) has rightly said before now, we lost around 50 percent of our market in five years.
In the context of such a dramatic shrinkage of the motorcycle industry’s base, it remains, even now, difficult to view the recovery that has been seen since the second half of 2013 as anything other than modest - fragile even. One senses that any flap of a butterfly’s wings could still be a portent of danger ahead.
In all probability, what we are seeing is simply a combination of the two factors at play – Euro3/Euro 4 hangover, and a still very slow trickle down of theoretically better economic indicators into bigger ticket item spending. Hopefully that means that what we are seeing so far this year in the new motorcycle registration statistics to date, will prove to be a time limited effect.
