International Dealer News IDN 116 Dec 2013/Jan 2014 | Page 4

• COMMENT • COMMENT • COMMENT • COMMENT • COMMENT • COMMENT • Single digit growth? Y the time the next print edition of International Dealer News is published (February/March), most markets in Europe will know what their final new motorcycle sales numbers were for 2013. Although volumes at this time of the year are relatively low, as this edition went to press (late November) it appeared that several of Western Europe’s primary markets (Germany, Spain, UK) were seeing some return to growth, or, in the case of Italy, a dramatic reduction in the rate of decline. 15 months ago, at INTERMOT in 2012, ACEM Secretary General, Jacques Compagne, told the assembled industry that a major statistical survey that his organisation’s staff had conducted suggested that while 2013 may not see any total growth, the indications were that the rate of decline might see the year deliver motorcycle sales broadly level with 2012. For most of the past 24 months, it has looked likely that total European new PTW registrations might have fallen to as low as around 1 million units for the year by the end of 2013. This is from a 2007/8 figure of just under 3 million total units. herever the final figure settles, it does appear that PTW sales in Europe have now been in decline for so long, and have now reached such a low level, that even if the next few years will only see market replacement rather than genuine growth, the product cycle within the overall bike park will mean that replacement activity will start. The first sign of this is likely to be the long hoped for price stabilisation and increase in demand for pre-owned units. While this has happened in some parts of Europe, indeed most markets at some stage or another in the past five years, it has proven to be a much less reliable indicator of underlying trend than traditionally has always been the case. As reported elsewhere in this edition of International Dealer News, market sentiment (certainly as far as the motorcycle parts, accessory, performance and service sectors are concerned) appears to have achieved its first vital step on the road to recovery, even if new and pre-owned unit movements have not yet done so. A notoriously fickle and often confusing bellwether, market sentiment can become manifest in many ways. At EICMA, it lacked any statistical integrity, excepting that the majority of aftermarket parts and accessory vendors and exhibitors that we here at International Dealer News met with, were at least sanguine about business prospects. There appears now to be a reassuring outbreak of “it is what it is” about forecasts for 2014 and beyond, but given where the market has been headed for the past few years, that itself is an important dose of realism. obody we met (well, with a few honourable exceptions) was talking in terms of double-digit sales growth for 2013, but as a result of five years of housekeeping and the same replacement cycle impacts that may filter through to new and preowned unit sales, the majority of the vendors we spoke with thought that as a business, they had probably done “okay” in the past 12 months (in profit if not sales terms), and many were in fact pointing to low single digit growth in sales. If this is true, and it proves to be sustainable for the next 36 months, then I think everybody would prefer that kind of market to the one that we have been enduring B W since the Lehman apocalypse in September 2008. Back then, the industry had gathered at Cologne for INTERMOT, with most people still in denial about the likely impacts of a global economic downturn that many were still hoping would simply turn out to be media and Wall Street hype. Personally, because of our involvements in the domestic US motorcycle market, we had already had a taste of what the collapse in mortgage securities really meant, but even so the almost complete collapse (relatively speaking!) in demand for new motorcycles in Europe has taken even me by surprise. f the ‘Milan-Vibe’ that we detected has any substance to it at all, then it may well follow the pattern seen in the domestic US motorcycle industry. That pattern has been one where certain traditionally strong and indeed major sectors of the industry have continued to decline, with such growth as there has been coming from two primary factors. The first is a market that has seen spending on highticket parts and accessories continue to be much reduced, with most motorcycle dealerships continuing to pay such bills that they have not been able to eliminate almost entirely through workshop and service related activity. That activity includes discretionary spending on performance and tuning, and some accessorising, especially where models are ageing, but the days of people happily throwing 5,000 of any currency at the parts department manager just because they fancy doing so, are not going to return any time soon. The second primary driver to market growth has been the change in the nature of the market, and that is likely to also be the case here in Europe. he pri mary characteristic of that change, or rather of those changes, is the evolution of consumer riding and ownership experience expectations. That has been seen through the changes in the relative balance sheet performances between Japanese and European / American brands and the product offers with which they have been driving showroom traffic. However, during this time one of the primary features of the Japanese motorcycle industry has been the near silence where new model development and launches have been concerned. If there is a secondary market impression that I take away from the EICMA experience this year, and the feedback I am getting from those who attended AIMExpo and (especially Japanese) OE dealer conventions in the United States in the past three months, it is that the land of the rising horsepower may soon be heading for the red line again. I ‘the ‘Milan-vibe’ was almost positive’ T N Robin Bradley Publisher [email protected] THE RIGHT PRODUCT - THE RIGHT FIT - THE RIGHT PRICE • Starting, charging and Electronic Ignition components: Specifically, we offer regulator rectifiers, stators, starter motors, starter drives, solenoid switches, ignition coils, CDI boxes, brushes and brush plate kits • Replacement pieces as well as multi-fit universal style pieces for the obscure models • Specializing in Asian & European street bikes, ATVs & Off Road vehicles • Quality bolt-on/plug-in OE replacement pieces at a competitive cost • Highest quality thermal/shock resistant material in construction • 1 year warranty on all products, excluding CDI boxes DISTRIBUTORS • Europe /// Parts Europe /// [phone] /// www.partseurope.eu • United Kingdom /// Agrimek /// [phone] /// www.motorsportelectrics.co.uk RICK’S MOTORCYCLE ELECTRICS 30 Owens Ct. #2 - Hampstead - NH 03841 USA - Tel: [phone] - Fax: [phone] [email protected] - www.ricksmotorsportelectrics.com