Second quarter ACEM data points to market softeningThe latest data from ACEM, the Brussels based international motorcycle industry trade association, shows motorcycle sales in the 28 European Union countries (ICE/Internal Combustion Engine only) as growing by +8.67% compared to the first six months of 2018 (612,690 units, up from 566,107 units), with four of the smaller EU markets still to report (Bulgaria, Cyprus, Denmark and Malta).
Last year new motorcycle registrations for the first six months represented over half of the eventual total for 2018 at 53.74%, with 80.74% of registrations for the first six months of 2019 coming from the 'Big Five' EU markets of Italy (137,994 units, +6.0%), France (108,453, +12.2%), Germany (104,966, +7.9%), Spain (86,839, +11.6%), and the UK being the softest of the 'majors' (56,439, +2.1%).
The data presented in this month's 'StatZone' (pages 6 to 8) is a mixture of national trade association reporting (as opposed to ACEM data) and includes some results for July as well as for the first six months of the year.
The data available that already includes July does indeed appear to suggest somewhat of a softening of new ICE motorcycle registrations (Germany and the UK for example) as we head into the second half of the year.
"+3% now looks realistic again"
If overall growth in the second half does soften from the +8.67% ACEM is reporting for the first six months, then rather than looking undercooked, our initial forecast for 2019 of +3 percent (+/- 2 percent), which I revised quite dramatically to around +8 or 9 percent in the context of ACEM Q1 data, is looking more realistic than I'd hoped.
The ACEM Q1 data had new registrations of ICE motorcycles for the EU 28 at around an always unsustainable and still probably Euro 4 influenced +19%.
The ACEM Q2 data shows new registrations of ICE motorcycles for 24 of the EU 28 as having grown by +2.87% compared to Q2 of 2018 (369,994 units in 2019; 359,657 in 2018).
This means that the trend underlying the headline figure of +8.67 percent for the first six months of 2019 as a whole is not everything it appears to be.
There is no question - based on the ACEM data for the first two quarters (and therefore YTD through end of June), the market is softening and doing so at an alarming rate.
Unless there is a quite dramatic and counter-intuitive uptick in new ICE motorcycle registrations in the second half of the year, then our original forecast of around +3% for the year is not just back in play but, actually, may be optimistic. The eventual outcome may be an essentially flat year.
Coming into 2019, there already was adverse trend evidence and, despite a storming first quarter in most markets (especially the 'Big Five'), what we are now seeing play out is a continuation of the 'real' 2018/2019 trend.
For the record, ACEM is reporting electric vehicle registrations in 24 of the EU 28 for whom it has data so far as +82.7% for motorcycles (5,812 units for the first six months of 2019 Vs. 3,181 for the year ago period) and +76% for electric powered mopeds (28,577 units Vs 16,259 in the first six months of 2018).
In addition to ICE motorcycles and electric vehicles, ACEM's ICE moped data shows that market as having grown by 10.98% for the first six months of 2019 at 119,249 units (107,453 for the first six months of 2018).
So, how to explain the softening of demand for 'conventional' motorcycles? Well, one of the classic pillars of negative wisdom can be ruled out as, increasingly, the motorcycle manufacturers are doing a better job of offering better products in technology and reliability terms, with forward-facing platforms that simultaneously recognise where the market's retro vibe and neo-custom zeitgeist 'happy place' is to be found.
Pricing of all that tech and future-facing platforms is an issue, for sure, and that also goes to the impacts of one of the two remaining possible areas of explanation. The market definitely needs to quicken the pace of its lightweight and, above all, middleweight displacement embrace and to be more realistic about where that sweet spot lies and to take notice of what manufacturers such as Royal Enfield are doing to bring price, displacement, retro and performance together into a demographically convincing alliance of verities.
The other primary issue is likely to be that age old enemy of 'macro economics' and consumer confidence - especially in the context of the U.S. administration's apparent determination to ignite a new cold war with trade as the battlefield, and bomb the rules-based economic order it itself authored with the Bretton Woods System back in 1944.
Having largely stood the test of time for some 70 years, it looks like, in the absence of an Iron Curtain, the present administration is bent on erecting walls of all kinds - including trade barriers. With the pace of electric PTWs adoption dragging and the various major market deadlines for abandoning internal combustion engines racing towards us, there is no question that even our market's issues have got issues!
