Five years of growth - can it sustain as bans loom?The year-end registration data for EU markets from Brussels based international motorcycle industry trade association ACEM makes for reassuring reading - for now at least.
As projected by IDN, the rate of growth has slowed for the year. While our own forecasts have varied in response to the unfolding picture in Europe's main markets, it was quite obvious that the 19.2% growth reported for Q1 on surprising robust winter numbers (Internal Combustion/ICE as well as electric units) would have to soften as the year unfolded. For one thing, dealers would have run out of inventory had it continued to grow at that rate!
But the end result for the year has seen 2019 annual registrations settle out at the higher end of our expectations, and the data goes a long way to explaining the positivity seen at EICMA in November - especially since Italy remains Europe's largest market with 230,039 ICE machines registered for 5.0% growth.
In 2019 Italy accounted for 21.6% of all EU conventionally powered motorcycles, with France close behind, taking 18.3% of registrations, Spain third at 16.1% of the market, followed by Germany (15.5%) and the UK (9.5%). The UK left the EU on 31st January 2020, so UK data remains within the EU totals for 2019. The last time it will be included (on a full year basis).
While the number of electric motorcycles sold in EU markets grew at 104.5% in 2019, at just 14,111 units, not only does it remain a niche where progress towards transport fleet electrification is concerned, but the technology of such machines make them a way lower source of parts, accessory, gear and apparel sales for dealers and the distributors and manufacturers they buy from on a per mile ridden basis than the level seen for internal combustion engine riders.
"+42.5% ICE motorcycle growth since 2014"
Remember, it is they who have created the market that we have today, and if we think there is still over-supply in our growing market now, and for sure there is (there always is), it is nothing compared to the way lower demand that an all-electric future will sustain. There will be casualties. Oh yes. There will be blood on the tracks. It will be slaughter!
Unless I and many others are missing something about the volume and value of PG&A sales that an all-electric future will sustain, only around one in ten of the non-OE exhibitors you see at shows such as EICMA, INTERMOT and all the others will still exist (or if they do, they will be massively diversified and changed businesses), with the bulk of revenue likely being earned outside of what we now think of as the motorcycle industry.
That, of course, means that we will likely only need one tenth of the number of shows such as EICMA and INTERMOT, one tenth of the PG&A brands we currently know, one tenth of the magazines (gulp!), distributors and dealers.
Please tell me if I am hugely wrong, and massively underestimating the helmet, apparel, gear, accessory, service and performance opportunities that electric motorcycles represent, please tell me that!
Total EV registrations in the EU in 2019 were 73,887 units, up by +57.7%, which of itself is interesting. At +104.48% for the year, electric motorcycles are growing nearly twice as fast as electric mopeds etc. (59,776 units, +49.7%), albeit off a much lower base.
But while it is easy to allow the data to make us complacent, make us assume that the final chapter of the future of PTWs is not yet written, that some White Knight of business opportunity may yet ride to our rescue, regardless of what we think, regulators look likely to take care of the future of the accessories market for us.
Norway is determined to end the sale of ICE, diesel and, as far as I can determine, hybrid vehicles, including PTWs, by 2025. Norway's market is reported to have grown by around 25% in the five years to 2018 and the total bike park is reported as being 355,972 units. Ireland (which reported +20.3% market growth in 2019), Sweden (+3.2%) and the Netherlands (-0.7%) are targeting a 2030 ban - say goodbye to the 76,400 units registered in 2019 between them. The UK has just announced that it is to bring forward its deadline to end the sale of new ICE, diesel and hybrid vehicles from 2040 to 2035 - the UK ban definitely will include ICE motorcycles, scooters and mopeds. Wave goodbye to another 100,742 PG&A gobbling units (+0.5% in 2019).
Once there is a German government that manages to slip the leash of controlling vested interests, and the fast growing youth population in Italy starts to exert its influence, then Europe really will have seen its critical mass tip - especially given that France (Paris especially) and Spain are already seeing a much higher level of future EV implementation (and even acceptance) than elsewhere.
Indeed, the issue of demographics is a huge one. Not since the mid-20th century has the shift towards young consumers been so pronounced. Just as the 'Boomers' revolutionised social attitudes and aspirations in their time, as they age out and are replaced by Millennials and Centennials and beyond, not even Hipsters are going to be expecting motorcycles to be treated any more leniently than any other sector when it comes to being carbon negative or neutral - even 'retro' has its limits. Such consumers are way too Eco-centric and savvy to buy into any concept of exemption.
For the record, and as reported on the front cover of this month's IDN edition, total ICE and EV PTW registrations for EU markets in 2019 were 1,382,676 units (+8.7%).
Not only does this represent a fifth straight year of growth (after adjusting for the Euro 3 to 4 transition debacle), but since the ICE motorcycle market bottomed out in 2013 (at 747,411 units), we have seen +42.5% ICE motorcycle growth in the five years to 2019 (+318,002 units; 1,065,413 ICE motorcycles registered in EU markets in 2019).
If that growth rate were to continue until Norway becomes the first market to implement a ban, then the next five years could see annual sales return to something like pre 2007-2010 financial crisis levels.
Who knows, if 2030 emerges as a default ban date for most markets, maybe even later, then maybe we are in for a brief but glorious boom before the lights start to go out (all over Europe) and consumers start eying likely post new unit ban and vehicle end of life issues and turn to electric urban mobility very quickly.
