The latest available data from ACEM shows Q1 new motorcycle registrations continuing to grow . After a strong first 60 days , the trend in most markets in March and April has seen the rate of growth decline or , in some cases , even entering negative territory by the end of April . These days the ACEM data only reports the ' Big Five ' markets - Italy , Spain , Germany , France , UK - but with those markets accounting for over 80 percent of the European total , it still gives us a bellwether with which to judge the market ' s direction of travel , even if the data since the end of 2019 has been unstable due , at first , to Euro 4 / 5 transition and then , of course , due the pandemic . Consumer demand is a fickle mistress at the best of times , and these times are far from being " the best ". What is remarkable about the 2022 market is just how robust the demand for PTWs has again been proving to be - so far ! There now have to be serious questions raised as to whether that growth can sustain . In 2020 the eventual response we saw to the pandemic proved to be counterintuitive . Initially , it was explained as being deferred demand , delayed buying , but as spring became summer it became clear that something else was at play too . There was widespread concern about the potential health risks of mass transit systems in the urban setting - and any deferred demand was quickly absorbed and overtaken by a genuine ' bump ' for demand . One that , until recently , had proven to be ( mostly ) sustainable . There had already been some signs of the new-found growth in demand settling back to pre-pandemic demand patterns in some of Europe ' s markets . Then , just as we finally put most of the effects of the pandemic in our rear view mirror , along come a war , a major cost of living and inflation problem with energy prices and market instability sending global economies into reverse , and an unprecedented supply chain drama that hits raw materials , logistics and our now all-encompassing dependency on semiconductors . The widespread concerns about a general worldwide recession are definitely gathering credibility . The global and European institutions charged with economic management and forecasting are all fumbling with their worry beads , and consumer anxiety is all around us . If 24 hours is a long time in politics , then two or three months is a millennium in economics . The conventional wisdom is that in times of economic uncertainty , purchases such as motorcycles are generally quick to see the negative effects . If real-world consumer incomes are falling behind rising prices and belt-tightening becomes the priority , then we would expect to see PTWs suffer at least as badly and any other ' discretionary ' spend . The PTW market more than halved as a result of the Financial Crisis and subsequent recession . With petrol prices climbing and awareness about motorcycling ' s environmentally favourable narrative continuing to gain traction , there are " reasons to be cheerful ", reasons why we may be in for another uptick instead of a downturn . However , a financial crisis is one thing , but a war ? A global shortage of computer chips ? Rampant inflation in everything from raw materials and logistics to interest rates and energy ? With health concerns not yet fully behind us and inventory in short
chip shortage to continue ?
supply , early data pointing to possible downturn needs to be taken seriously . If anything , a plateau in sales , maybe even a decline of low single digits , may actually be a good net growth result in the context of what could be headed our way . Real growth in terms of our share of available disposable income in a faster declining consumer spend environment might be the best we can hope for . Even those who are suggesting that we are headed for global doom , gloom , hunger , poverty and conflict are not forecasting the kind of economic downturn in the developed world seen a decade ago . So far forecasters are suggesting that , if there is a widespread recession at all , it will be relatively shallow and of relatively short duration . One of the biggest problems confronting the motorcycle industry is that it still has not been able to enjoy a sufficiently sustained , long-term period of stable and meaningful growth of the kind needed to replenish the capital reserves it burned through in its Financial Crisis existential struggle . The absence of capital reserves goes a long way to explaining market consolidation , explaining why so many more Private Equity investors and other predators are being drawn into the PTW industry - there are bargains to be had . As a result , too much of the capital that industry profits generate is sucked of the industry , rather than reinvested . There have been some exceptionally overpriced , illconceived and poor-value acquisitions and ' flips '. Most motorcycle and related businesses are relatively undervalued in their balance sheets and those that are publicly owned are trading at undervalued share prices - hence the aggressive share buyback programmes we are seeing from the likes of Piaggio . Additionally , the multipliers being used to price M & A activity ( especially in the EV and related sectors ) defy all logic . There is a lot of the investment capital looking for alternates to the bond and stock markets . There is a ' lower bar ' where the threshold for quality investments and returns are concerned - listen to Warren Buffet on the subject ! By way of an example , Harley ' s soon to be ' semi-independent ' LiveWire electric ' subsidiary ' is edging ever-closer to its SPAC-based Wall Street float with an offer prospectus that is based on ' Alice in Wonderland ' forecasts for the number or EVs it intends to be selling in five years ( 100,000 units a year ) and by the end of this decade ( 200,000 units a year ). With the semiconductor shortage still likely to slow us down ( at least until the end of 2023 ) the eventual outcome of the present inflationary cycle is likely to resolve itself into stagflation , at best . Russia ' s war on Democracy and decency will continue feeding uncertainty for a long time . It really will be a positive statement about the potential our industry has for a robust and healthy future if we are talking about net annual industry growth by the end of 2022 .
Robin Bradley Publisher robin @ dealer-world . com