Rightsizing of the Motorcycle Industry
As I drove around last Saturday to hand out flyers and solicit door prizes for the upcoming Rails and Roads Vintage Motorcycle Show (September 16th 2017 in Winnsboro SC) I stopped at a few dealerships and a few independent shops. In all places the welcomes were warm, but I noticed something very strange. In most cases there was almost no one in the stores besides the employees. When I worked at my local Honda dealership, every Saturday was a madhouse; an empty store on a Saturday was unheard of. It must have been inevitable that after decades of main stream success that it may be time for a rightsizing of the motorcycle industry.
Of course the recent news that Harley Davidson was going to layoff some production workers was something no one could have imagined 10-15 years ago. Before that Polaris announced the shuttering of their Victory motorcycle brand. The one bright spot in the market for Polaris is the success of the Indian brand that merged the solid technology of the Polaris company with an old legendary American brand name.
It’s not just cruisers, sport bike sales are off too. All across the market things are not as exciting as they used to be. The big 4 Japanese manufacturers are fortunate enough to have the ATV & side X side UTV market to keep them going, but even that segment has been affected by the tightening of the consumers spending habits. And this seems to be a global slide as the Nikkei Asian Review recently published an article entitled “The Motorcycle Becoming Thing of the Past.” According to this article, motorcycle sales in Japan are only 11% of what they once were. It’s sad to think that motorcycling is going away in the country that proved to the world that it was possible to build reliable, oil tight, powerful & lightweight motorcycles.
The bright spot in the world market for motorcycles is the increasing demand in India where according to the Times of India demand for 500cc and up motorcycles has increased at a 23% calculated annual growth rate from 2014 to 2017. This has led to a number of large players building factories there to pry some of this lucrative business away from Bajaj & Enfield.
Another happy trend is the vintage motorcycle industry. Although it is in very real danger of falling victim to the same over-exposure & over-saturation as the “American Chopper” crowd from a few years ago, right now the demand for genuine vintage motorcycles whether restored or customized in either the “café racer or “Bratstyle,”is extremely high. Now when you buy that old Japanese 4 or even small displacement twin you have to pay real money for it, if you don’t someone else will. A lot of motorcycle manufacturers have noticed this trend and now offer ready to ride retro style machines to allow you to experience the joy of vintage motorcycling without the misery of actually restoring a vintage motorcycle.
But the motorcycle companies are not the only ones that suffer from a soft demand for motorcycles, the Touratech company makers of some of the finest accessories for the adventure touring market filed for bankruptcy protection this year. This is yet another symptom of the rightsizing of the motorcycle industry. According to the Touratech U.S.A. blog operations will continue as normal during the company’s reorganization.
Motorcycle magazines are another thing hit hard by the rightsizing of the motorcycle industry. The audience is fickle even when times are booming it’s tough for publishers. Two of my all-time favorite motorcycle magazines came & went during the nineties at the height of the motorcycling boom in the U.S. The Old Bike Journal was one and the other was Twistgrip. Both of them came and went pretty quickly, The Old Bike Journal lasted longer because it had a broader audience, but both of these publications came and went during relatively good times.
Recently on Facebook, Buzz Kanter the publisher of American Iron Magazine shared his thoughts on the state of the industry giving some examples of how tough it is to survive and thrive in today’s market. I am going to share his exact words with you in the succeeding paragraphs. (Yes he generously granted permission for all to share them.)
“Call it Industrial Darwinism if you wish. But the business world is really all about the survival of the fittest. I have questioned for a few years how the motorcycle industry could support so many manufacturers, distributors and magazines. I now believe we are about to have a serious shift and downsizing.
I predict a growing number of changes in the motorcycle industry in the next year or so.
Too many motorcycle-industry businesses are over finanically over leveraged and will not be able to carry the debt. Others seem to be poorly managed. But others look healthy, creative and sustainable.
I expect more consolidation of big name motorcycle industry brands, some companies going out of buisness, and a very significant reduction of motorcycle magazines.
Paisano (Easyriders Magazine, V-Twin Magazine, Wrench Magazine, Road Iron Magazine) has announced they are folding all their motorcycle magazines except Easyriders, which they are reducing from 12 to 9 or 10 issues a year.
Bonnier (Cycle World Magazine, Motorcyclist Magazine, Hot Bike Magazine, Baggers Magazine, Sport Rider Magazine, etc) has been cutting back on their magazines’s sizes and frequencies. They just announced they are folding Sport Rider, and I expect more radical cuts in staff and product there.
So what does this all mean? I believe the motorcycle industry is ripe for a “rightsizing” where there will be a rebalancing of supply and demand. As demand for motorcycles, motorcycle parts and motorcycle services continue to decline, so does the financial support of those who serve these markets.
We at the growing family of American Iron media (American Iron Magazine, American Iron Garage, American Iron Salute, and American Iron Power magazines, plus our growing on-line operations) are working hard to understand and react to these changes with strategic and creative ways. We’d like to thank everyone involved with the amazing world of motorcycles for your support as we move ahead into the future.
If you have read this far, I’d appreciate your reaction and suggestions, also please feel free to share this post.”
This is sobering stuff from an acknowledged industry leader. The cuts at Bonnier especially bug me because Cycle World is the only one I subscribe to and is the current home of my favorite motorcycle writer of all times Kevin Cameron, but time and the economy march on relentlessly so we must all adapt or die.
Now this all sounds like a lot of gloom and doom, but there could be a lot of positives to the rightsizing of the motorcycle industry. As motorcycling has grown and become more mainstream the many of the long time hardcore motorcycle enthusiasts (especially American motorcycle loyalists) have resented being taken for granted and seemingly being pushed aside as the dealers and motorcycle companies ran chasing after the hordes of trend followers who saw motorcycles as cool fashion accessories to be discarded when the next big thing comes along.
Another advantage is that the companies that survive the rightsizing will be more competitive and have a sounder financial footing for the future. I just hope the ones that do can produce products that I like and still stay in business.
Part of the problem with the motorcycle industry is enthusiasts like me, people with eclectic tastes in motorcycles that no one else but me really wants. The problem with modern motorcycling for me is there are so few motorcycles available that I would have. The short list in order by desirability is;
- Triumph Bonneville Street Twin (Yes the 900cc version I’d never miss the other 300cc.)
- Moto Guzzi V9 Roamer or Bobber (I prefer the Roamer with its chrome and 19” front wheel)
- Honda CB1100 (This bike can do no wrong and would actually be my first choice for a cross country ride, it just blends into the background too easily.)
- Honda Africa Twin (Only adventure bike I’d want)
- Royal Enfield Bullet (Love the style, riding position etc. but I’d have to keep a Honda in the garage next to it, you know just in case.)
a real 2012 Royal Enfield Bullet
Look at this list other than the Triumph does anybody else want one? I must not want one too badly either, the newest bike I own is a scooter an 01 Honda Helix, the next newest one is a 1980 CB650, & the others are from 1964, 1971 & 1972. Too many people bitch on the internet about what they want but when someone builds it they don’t go buy it. I plead guilty as charged to that. Prices are too damn high, income is down, and my 37 year old ratbike is just as roadworthy & reliable as anything I can buy.
This friends leads to the real reason for the “rightsizing of the motorcycle industry”, the customers just aren’t buying. There are a million reasons why not. In my case personally it’s the value of what you get versus what you pay. I can sign the line and get any motorcycle I want, but quite frankly to me they’re not worth the cost. Others just simply don’t see anything new that they want even though they don’t mind spending the money. Plus many vintage bikes especially the Japanese ones are damn near as reliable as anything made today for a fraction of the cost once they get fettled properly. Combine this with a general decline in interest in the experience of driving by younger people it’s easy to see why the industry as a whole is downsizing. The customers just aren’t buying.
Welcome to the Asylum 