Reading the Room
One of the missions we give ourselves when we visit EICMA for three days every November, is to try to gauge what financial analysts refer to as 'Market Sentiment'.
This can take many forms - P&A and G&A product offer trends, accessory and motorcycle pricing trends, vendor and dealer confidence (the two are closely linked, but they are not the same), OEM motorcycle trends, inventory, technology, materials and, of course, spending through the channels.
Whether or not the market is 'buying' is, ultimately, inextricably linked to two primary factors. Whether riders are inclined to be in the market for a new motorcycle (a new or pre-owned unit) and if they are also, or instead of a new ride, minded to stock up on new accessories - new gear or apparel and helmet, and maybe some new hard parts - whether components (performance or otherwise) or accessories to freshen up the look of a new machine, and these days that often includes creature comforts such as comms systems, phone holders, or whatever.
That may all be stating the 'blindingly obvious', but some 45 years of visiting motorcycle industry shows, primarily as a 'magazine guy' rather than a rider, dealer or importer, has shown me two things.
First, that whatever the superficial impression one gets of trends and present sentiment, look harder, drill deeper, and don't come to immediate conclusions. A considered assessment as the post-show weeks plays out often adds valuable nuance and context to what one saw and experienced. Secondly, don't always trust the data.
However, he or she who thinks they know it all, either haven't been asking the right questions or have been putting too much faith in data. At all times remember this - motorcycling is a fundamentally irrational and emotional undertaking.
nuance and context
Data is great, we all need it, increasingly so as we slide ever deeper into an Asimov-esque dystopia in which all evolution is code. As I get older, I become increasingly concerned that the closest we will ever get to any quasi-Buddhist concept of reincarnation is one in which we all come back as QR Codes!
As the data in this edition of IDN shows, we are not yet in a position to be able to draw dependable conclusions about the market's direction of travel based solely on the numbers. - which why 'Reading the Room' at EICMA and playing close attention to what happens in the following three months is so important this of all years.
The national trade association motorcycle registrations data that we have been able to publish in this edition draws a mixed picture.
For the first nine months of the year to September, Italy (at +7.17%/131,950 units) and Spain (at +7.18%/163,599 units) are both defying the odds if the prevailing, pre-EICMA market sentiment is anything to go by.
In both cases, those market performances are, in fact, the best first nine months seen in those countries in more than 15 years, and the detail in the data yields no discernible evidence of a positive or negative direction of travel in either direction, unless you happen to be an electric PTW of some kind. Parked in the dark, gathering dust in some cold damp warehouse, unloved and still awaiting customs clearance. I hope I don't come back as one of those!
In Germany, the news suggests the emergence of a new class of Quantum Data - simultaneously good and bad. The headline news is that YTD through September, new motorcycle registrations were 'only' +1.86% and six out of the nine months so far show registrations 'essentially flat'. At +6.22%, +5.47% and +4.92%, the other three months of 2024 would have been considered poor months in 2023 - a year in which all 12 months were in double figures, with the weakest being +13.74% and the best two months being +31.26% and +24.86%.
So, by any measure, 2024 has seen the prior strong (and I mean really strong) German market growth evaporate - putting the wider economic data that we are all seeing and hearing about for the German economy to convincing proof.
However, despite all that, Schrodinger's data for Germany also shows that at 114,736 units YTD, registrations in Germany look likely to close out 2024 as the second strongest market performance in at least 15 years.
Unlike the emotional attachment we all have to riding, all data is explainable. And therein lines its mono-dimensional weakness, in what Schrodinger described as a multiverse. In this case, you are not getting the full story if you only read stats. 'Reading the Room', aka nuance and context, tells you that while most dealers in Germany and the distributors they buy from all agree that the market there is down, they will all come up with different versions and definitions of 'down', and with different versions of what sectors of the market are weakest.
The primary problem will be that the strong growth in cash and capital resources generated since 2020 (2021 through 2023) has slowed down. But context tells us that it is the direction of travel that we need to see more evidence for. What happens in Germany in the first quarter of 2025 will be all important.
Everyone is becoming increasingly familiar with the financial news from the OEMs, but even that is not a uniform picture. Yes, KTM has stubbed its toe badly, Piaggio's multi-decade comeback crusade has stalled, BMW and Ducati are on the negative side of flat, but not yet headed for the 'hurt locker' that KTM finds itself in.
While much smaller, Triumph appears to be unable to do anything wrong at this time. It remains to be seen whether going to war on all fronts and finally trying to get 'techy' on models whose essential charm and appeal has been their relative simplicity dents their performance in the next 24 months.
Meanwhile, based on the available data for the first half of 2024, the Japanese manufacturers are basically doing okay - modestly, consistently and sustainably up, I'd say. No records being set, but no factories closing either. As to the American manufacturers though, don't ask. Let's not even go there! That data is dystopian. Harley-Davidson and Polaris (Indian) are in serious trouble, for all sorts of reasons.
Just one final thought though, and it concerns the Japanese brands. Exports of machines to Europe from their home factories (over 250 cc) were down by -49.92% in July and -36.78% in August; YTD they are down by -15.55%, and the trend is headed decidedly 'south'. Hmmm.
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