American Motorcycle Dealer AMD 169 August 2013 | Page 4

‘Premium pathway’ means that the parts industry will see the new generation of custom bike riders head its way eventually ITH signs that the v-twin parts and accessory industry is now (mostly) returned to growth it is important that vendors remain realistic about the opportunities ahead. The market we now have, the one that is now showing modest growth is a very different one to the market that we had before the downturn. Though evident on both sides of the Atlantic and elsewhere, the growth is low annual single digits at best, and isn’t universal. Some vendors are doing way better than that. They are a limited number though, and ones who have the best capital backing, and the other resources necessary to see them emerge with the right people and right product lines at the right time. However there are still others who are struggling to keep the lights on, despite good housekeeping and decent product offers. Typically those who are seeing growth fall into the ‘back to basics’ markets that now characterizes our industry in stark contrast to the big ticket frames and engines bonanza that burst so spectacularly after the 2005/2006 market peak. So far the same kinds of sales that kept the industry’s lights on as the market shrank remain the only significant and reliable growth areas as it now grows again - bolt-on accessories, performance and tuning products, and the staples (service products) that have kept dealership workshop revenues flowing remain the cornerstone of the modest growth being seen. There is some evidence of an increase in custom work, including ground-up builds, but as discussed last month, in the context of how the downturn and demographic issues are re-shaping custom build price-points and character, the umbilical cord between P&A manufacturers and distributors is destined to remain dormant for some time to come. The value of the ‘garage-build’ phenomena for the parts and accessories market is to be found elsewhere - in the demographic renewal it will ultimately produce, and in the realignment of custom bike ownership values back onto the miles ridden rather than the miles trailered; back onto splattered oil and away from polished chrome. ustom bikes are still the lingua-franca of consumer aspiration, motivation and inspiration, but it is the riding experience that is now taking centre stage, rather than the ownership experience - the riders now finding their way into our market share many characteristics with boomers (tribal, individualism, peer group approval etc) but represent the birth of a new generation of young, cost conscious customers in just the same way that the emergence of the boomers in the late 1960s did. Like the boomers did, they will, no doubt, allow their spending to evolve as their own circumstances develop, but as they do they will still seek to gravitate towards riding experiences that are ‘characterful’ and individual. The days of the ‘catalog-bike’ are pretty much gone for good and with manufacturers such as BMW, Triumph, Harley-Davidson and Ducati already marching confidently down the ‘premium pathway’ the parts and accessory industry has nothing to fear from future tastes, but it does have much to learn in terms of how to meet those expectations. This ‘New Four’ has replaced the market hegemony of the ‘Jap Four’, especially in Europe where, as reported elsewhere in this edition of AMD Magazine (see my W it is the riding experience that is now center stage L C ‘Bradley Report’), the ‘mainstream’ or ‘metric’ market continues to be in melt-down. Broadly speaking sales of all motorcycles and other PTWs (Powered Two Wheelers), liquid and air-cooled, in Europe have collapsed from close to 3m units a year as recently as 2007, to a likely outcome of something in the region of 1.2m for 2013. While the cycle of decline and a return to growth in the mainstream market in the United States is some years ahead what is being seen in Europe, the ‘recovery’ there (if that is what it is) is still fragile and uncertain; indeed compared to the v-twin market the ‘metric’ motorcycle industry in the United States remains decidedly moribund at this time. While Europe is seeing a few other smaller specialist manufacturers beginning to pick up sales, and also seeing a growing acceptance of the better branded and engineered small displacement Asian offers, combined with urban E-bike uptake, it is the ‘New Four’ that are growing sales, market share and profits dramatically in the face of this most unpromising landscape, and clearly doing so at a massively accelerating pace in market share terms as the overall market in Europe continues to contract. What is clearly and most startlingly in decline is the value that consumers are placing the riding values that saw the ‘Jap Four’ revolutionize the market from the 1970s onwards. eaving aside the economic issues driving this change, there are important design, engineering, styling and riding taste lessons for our industry to learn from the drama we see playing out before our eyes in the wider motorcycle industry. While much will be different in the future, the one clear lesson to emerge is that (adventure touring enthusiasts aside) premium customers are placing a premium on the simple pleasures of being able to do-the-miles in comfort, surrounded by creature comforts, and on a machine that expresses who they are. Don’t let anyone think that we are not an industry that is in the right place at the right time - we definitely are; we just have to be patient. The valuable irony of the ‘premium customer’ is that, unlike prior generations of superbike customers, they place a premium on values that transcends pricepoints just as much as the custom bike buyers that have now evaporated did. While consumers will wish to be savvy in their deal making, and cautious in terms of allowing themselves to become over leveraged as result of being seduced by easy credit, they also wish to be savvy in terms of what it is they are paying for in a way that has seen the values of the custom industry migrate and infect the mainstream of rider aspirations like a contagion. In time the parts and accessory industry will find itself being able to exploit the new opportunities that these savvy new generations of customers represent, as these customers full fill their mission to express themselves. Robin Bradley Co-owner/Editor-in-Chief [email protected]