International Dealer News IDN 120 Aug/Sept 2014 | Page 4

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Motorcycle sales growth running ahead
of wider economic growth forecasts
T may sound like a paradox to say so, but the recovery we are seeing
in the motorcycle market in Europe this year is simultaneously strong
and weak.
It is weak because in most European markets the wider economic growth forecasts
on which wealth expectations are based are still marginal (with the exception of the
UK).
However, the recovery we are seeing in our market can only be described as
"strong", as in most key European markets motorcycle sales growth is running well
ahead of wider economic expectations in percentage terms.
This is a "good thing" of course, but it does suggest two possible concerns.
First, that we don't yet know the underlying state-of-health of the public's postrecession view of life on two wheels,
as at this stage we are clearly
benefitting from built up existing
demand, rather than genuine industry
expansion in demographic terms.
Second, it has to be accepted that
while the wider economic recovery
remains in the zero growth to 1.5 or 2.0 percent region, then some fragility remains,
with the risk of those wider economic issues yet coming back to spoil the party.
In Germany market deterioration levelled off over the past two years, and there
has been some small growth since - for the first six months of this year new motorcycle
registrations are up by 10 percent, total PTW registrations up by 9 percent.
That is a good number, for sure, but it somewhat disguises what clearly is still a
large degree of market volatility. Germany enjoyed a spectacularly good month in
March, being up nearly 15 percent on what are usually its highest monthly volumes
of the year.
n percentage terms January and February also saw spectacular growth in Germany,
but on very low volumes, and June was up over 9 percent. So far this year it would
appear that Germany has registered some 66,000 new motorcycles, compared to
around 60,000 in 2013 and around 59,000 for the first six months of 2011 and
2012.
So, given that the last year before the full force of recessionary pressures hit the
industry (2008) saw some 80,000 motorcycles sold in Germany, while there is still a
giant hole in dealer new unit revenues there (everywhere!), we can at least now say
that the market is following the classic stability followed by growth pattern - as
anticipated by ACEM at their presentation at INTERMOT in October 2012.
Elsewhere the picture is less defined - as reported in this edition of International
Dealer News the UK is doing well, and Spain continues to see rebound. Other major
markets are either stable, modestly up (France and Italy for example), or have seen
the rate of market decline slow down.
Clearly, if the wider economic performance in Europe is robust, then it is not yet
filtering through into discretionary leisure spending on products such as motorcycles
in all markets. However, define "robust" - "fragile" or "unproven”, still appear to be
the operative words where macro-economics are concerned.
Although the UK economy appears to be "pulling up trees" as it powers past
three percent annual growth forecasts (according to the IMF), it lags behind the

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overall global growth rate prediction. Worse, most Euro Zone markets (and the United
States) are still forecast to see annual growth of only around the one to two percent
mark, at best, and at those levels it doesn't take much in macro-economic, geopolitical or regional/local terms to reverse trends.
he most recent data released by Brussels based motorcycle industry association
ACEM shows cumulative PTW sales in the EU up by 3.5 percent (at 675,630
units) for the first six months of the year, with each month of the year so far
having posted at least some kind of growth.
Moped/small cc unit sales for the first six months are off, at -8.5 percent for the
first six months, but motorcycle sales, which deliver two thirds or more of market
turnover in cash terms, are said to be up 8.8 percent for the first six months, at 493,378
units.
ACEM's data shows year-on-year
motorcycles sales in key markets
performing well.They have Spain at +20.8
percent; the UK at +13.1 percent;
Germany at +9.9 percent; France at +6.9
percent; +4.4 percent in Italy.
So we have growth. Hurrah! Do we have increasing popularity in the overall
concept of life on two wheels? Well, that is something that we won't know for years,
or until some of the manufacturers are able to release demographic data telling us
whether they are selling to returnees or new adopters.
My guess is that it is a mixed picture. Clearly there is low hanging residual, delayed
spend demand to be picked up in the dealerships as wallet book strings loosen.
Howeve,r common sense also dictates that some sales must be going to people, or
whatever age group, who, for whatever reason, are drawn to a PTW message that
has had considerable creativity and effort invested into it by the trade associations.
The recent and coming crop of new manufacturer products a ɔ