International Dealer News IDN 118 Apr/May 2014 | Page 4

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Congratulations - you are a survivor!
F you are a motorcycle dealer (franchised or independent), a
performance/tuning centre, a repair shop, a specials/customs builder, a
parts and accessory distributor/importer, a designer or brand owner, or
a manufacturer of anything that sells in the motorcycle market, from parts
through to bikes, who is still in business - congratulations! You survived!!
There have been plenty of false dawns in the past few years, plenty of moments
when it appeared that the apparently endless spiral of downturn may have appeared
to be about to reverse, but so far all of them have proven to be just exactly that - false.
Personally I thought that we were turning the corner in 2010, and that in that
context the two or three years of downturn we'd seen by then was probably not such
a bad result - given the terrible prophesies that accompanied the 2008 banking crisis
and so-called 'credit-crunch'.
It wasn't to be though - the trend just continued inexorably down. Month after
month, quarter after quarter, year after year, the sequence of bad motorcycle sales
news, contracting shows, closing shops and bankrupt parts, accessory and apparel
brands (and media for that matter) just kept on spiralling
ever further south.
However, at the end of 2011, it appeared that a lot
of parts and accessory vendors had started to get to a
point where they had house-kept their way towards
business stability. While parts and accessory sales
overall had only stabilised (at best), some businesses
were seeing modest single digit growth, and most had
managed to get back into profit simply by adopting a strategy that allowed them to
make the best out of whatever was available to them.
By the end of 2012 most vendors were facing the future with an all-new lean,
mean, svelte, slimmed down, improved version of themselves, and while one man's
growth was still another man's loss last year, the better businesses did indeed see
growth and make money. Indeed 2013 was pretty good, overall, for many parts and
accessory businesses, and by the time that the industry gathered for the Milan Show
last November, further depleted though that expo may have been in vendor numbers,
there was at last a better 'vibe' among the exhibitor community and many, maybe
even the majority, reported having had a good week.
At that stage the gradual 'decline in the rate of decline' of new motorcycle
registrations that industry association ACEM had predicted (at their industry
presentation at INTERMOT in 2012) had translated into the first signs of a stabilisation
in the downward trend, with some markets returning to growth in the final quarter
of last year, and others (such as the UK and Germany) arriving at a position where
they could point to 24 months of very modest decline or modest growth - namely
stability.
There were exceptions of course, there still are - Italy for example. But even there
the statistics for the first two months of 2014 (published elsewhere in this edition of
International Dealer News) do point to stabilisation ahead, while in other important
markets rebound does appear to be in-play.
After what we have all been through since the last peak in European PTW
registrations (at around 2.7m in 2006 and 2007), the current apparent growth is
clearly nothing to get excited about as such. Last year closed out at around 1.3m
registrations, a greater than 50 percent haemorrhage in just 6 years, but the decline
having been so long and so deep, and the so-called growth still so fragile and fresh,

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that the best we really hope for is the aforementioned stabilisation.
As I said, of itself, if this year's market performance so far is no 'biggie' in statistical
terms, it would appear to suggest that if the present trend is sustained, and the market
has seen some 200,000 or so more sales than last year, then by the end of this year
we will be able to look at 2013 and 2014 as a 24 month period of stability - a period
that saw a largely flat trend overall compared to the prior years, and this would be
the important first step on the road towards recovery.
At this stage the primary motivator isn't yet the statistics as such, but it is an
underlying significance what continued stats such as those we are currently seeing
mean for the market in the long-term.
Regardless of the numbers we see, and how soon we see them, what we have
already seen provides important reassurance in terms of suggesting that post 2007
market atrophy has been primarily driven by macro-economics and consumer
confidence, rather than the more worrying strategic issues that have been frightening
many market analysts.
The current positive stats are showing a much more
rapid recovery in motorcycle sales than in small cc units.
That means the sales that dealers are making have a
higher net value, which is a good thing, and that the
units concerned are destined for higher mileage another good thing.
Europe-wide statistics on the number of miles being
ridden are difficult to arrive at. In those countries where
such numbers are available the decline in annual two-wheel mileage (where there
has been decline) has been nothing in percentage terms compared to the decline in
new model registrations.
This is reflected in the change in vendor parts and accessory sales patterns, which
has seen top ticket spending fall away and the growing dependency on
workshop/service and parts counter revenues and product volumes.
It is also reflected in estimates concerning the aging of Europe's 'fleet' (which has
been substantial as riders have delayed replacement spending), and on the decline in
the 'bike park' - the total number of PTWs actually registered for road use.
There has been 'bike park' decline (an estimated 35.5m units by the end of 2012
from a peak of around 37.7m units in 2011), but the decline has come late in the
downturn/recovery cycle (the 'bike park' actually continued to grow right through to
2011), and it has been modest (in percentage t