Guest editorial: Paolo Timoni
The Powersports Market in 2025: A Vision
During the first part of 2011 sales of scooters have increased dramatically as a result of higher gas prices. Along with a slowly improving economy and credit market, the sales of motorcycles also have grown, although at a more moderate pace. While this is certainly good news, it does not appear to be good enough to restore full confidence among most industry folks — and understandably so.
From 2007 to 2010 the industry experienced a decline in excess of 50 percent in annual retail sales of motorcycles and scooters. As a result, in 2010, only about one in 400 U.S. adults purchased a new motorcycle or scooter.
Within the last 40 years, industry retail sales have gone through several major ups and downs. It appears, however, that overall the propensity of American consumers to buy and use two-wheeled products has been declining. The best year for motorcycles and scooters sales in the U.S. was 1973, when American consumers purchased about 1.5 million new vehicles. After that, industry sales declined, and through several ups and downs, sales bottomed in 1992 with only about 280,000 new vehicles retailed.
Retail sales peaked again in 2006 at about 1.2 million new vehicles — or about 20 percent fewer vehicles than in 1973. It’s important to understand that during the 1973 to 2006 period, the total number of American consumers increased by more than 40 percent, and their inflation-adjusted total net worth grew by more than 120 percent. We therefore cannot pretend to ignore that, even before the recent financial crisis, a larger population with a larger total purchasing power was buying fewer powersports products, even though the products are the best ever in terms of quality, performance, features and design.
This is mind-boggling — depressing, even — for the passionate people in our industry. Will retail sales ever reach the 2006 level ever again? Are higher oil prices the only hope for sustainable higher retail sales? Will gas prices in 2012 be $3.50 a gallon, or $5 a gallon? What will gas prices be in 2020?
Predicting the future is an elusive art form. One articulate, compelling argument likely has an equally articulate, compelling opposing view. So, with good reason, I don’t think it’s useful to share yet another forecast. Instead, I’ll try to articulate my own imaginary, desired version of the powersports world of the year 2025 and a series of events that might lead to that future.
My main purpose here is just to entertain you and, if possible, to spark a conversation. It’s my belief that the actions of a large number of people and organizations, the industry stakeholders, including you, that will define its future.
It is a cold and bright morning on this day in February 2026. As usual, many industry participants are gathered in Indianapolis for the traditional meeting organized by a preeminent industry organization. Its president is preparing to deliver the initial opening address. Despite his golden age, he looks unusually perky -- excited, even. He has been leading the organization for more than 20 years, and while there had been times in which he appeared a little bit discouraged — like when he had to address the crowd in the winter of 2010 — he had put a lot of work and passion into it. He had announced his retirement many times in the last few years, but with all the incredible things going on in the industry, he could never let it go. The crowd was very spirited as a result of great retail sales during the previous year, and all were a bit emotional too, as they knew this was going to be his last address.
Sitting as usual on the left corner of the stage, behind a long table, he took the microphone and started his address.
“Ladies and gentlemen, I am very pleased to let you know that in 2025, once again, we have broken all previous industry records. More than 28 million people in the U.S. used our products last year. That is nearly four times the number we had back in 2010. About 18 million used them for personal urban transportation, and about 14 million as recreational vehicles, with nearly 4 million consumers using their vehicles for both purposes. The number of total miles ridden has been estimated at about 8 times the value it was back in 2010.
“The majority of consumers still own or lease their vehicle, but nearly one-third rent or share it when they need it, thanks to new and appealing offerings from new and old industry participants. Extremely fuel-efficient gas powered, hybrid and electric vehicles are now found both on-road and off-road. We cannot call our industry the ‘two-wheeled industry’ anymore since many vehicles nowadays have three or four wheels.
“The industry has been a beacon for innovation with new solutions for electronic breaking, electronic traction control and stability, and to protect customers from inclement weather. Vehicles with electric, hybrid, and thermal engines with displacement up to 500cc now represent about 65 percent of current retail sales.
“The number of indoor and outdoor facilities where customers can practice all kinds of on-road and off-road motor sport activities is the highest it has ever been, and the number of people engaging in the practice of motor sports is at its highest record. Thanks to the contribution of all of you, we have permanently changed the landscape of urban transportation, providing a significant contribution to the objectives of energy conservation and reduction in traffic congestions.
“Also, thanks to new partnerships, our products have allowed million of American to rediscover the beauty of our country: from mountains to seashores, lakes and deserts, and national parks, travel and ride is nowadays a very visible and appreciated activity. Total retail sales of new vehicles last year topped 2.4 million units, nearly five times the number recorded back in 2010. Since 2010, the industry has created in excess of 200,000 new domestic jobs — not a bad result for a ‘small’ industry! The industry is today as strong and successful as it has ever been, and therefore it is with great pleasure that I finally wish to announce my retirement, effective today.”
As soon as he was finished, the crowd erupted in cheers, and then everybody started to mingle and chat. As I was walking around, I listened to many people reflecting on what they heard, discussing their opinions on major events that determined the growth and success of the industry. As I was carefully listening, I started to take some notes, and the following is a summary of what I heard:
2012: A large group of U.S. powersports dealers united and created a new national association to promote changes in legislation regarding driver licensing, traffic rules, parking, and responsible access to public land for off-road recreational purposes. Back in 2011, with retail sales of motor scooter and motorcycles growing again as a result of higher gas prices, people started to have more confidence that this new trend was here to stay. At the same time, observing all major automotive players focusing their advertising on fuel efficiency and releasing a significant number of new vehicles with on highway mileage in excess of 40 mpg, it became also clear that competition would intensify significantly. In order to have a fair chance to compete, powersports OEMs and dealers needed some changes in existing legislation to eliminate those hurdles that put their products at a competitive disadvantage. The time had come for dealers to commit to make those changes happen. Starting from 2014, one state after another started to enact legislation that created a more leveled playing field, and industry growth accelerated accordingly.
2013: As high gas prices continued to drive demand for scooters, a leading car-sharing company introduced a fleet of scooters in selected urban markets for hourly or daily rentals. The initiative proved highly successful and was quickly extended to other metropolitan markets and copied by other competitors. Back in 2011, it was already very clear that many consumers, especially the younger ones belonging to the millennial generation, considered sharing items a very desirable form of consumption — cars, apartments, gardening tools, bicycles, kids clothing, and many other things were already shared by millions and millions of people thanks to new business initiatives of many young and creative ventures (i.e. airbnb.com, bookcrossing.com, freecycle.org, gobble.com, liquidspace.com, neighborgoods.net, taskrabbit.com, thredup.com, zimride.com, etc.). By 2013, it was the time to add motorcycles and scooters to the list and, by 2025, about one-third of total U.S. riders were sharing instead of owning their vehicles.
2014: A leading OEM introduced a smartphone interface for their motorcycles, capturing and storing all kind of data related to the vehicle performance and the customers’ rides. Once back home, customers could review all aspects of their vehicle performance, monitor maintenance requirements, and compete against themselves in new computer riding simulators. The new product and its related applications became extremely popular, and in few years, were adopted by all major brands — creating a new level of intimacy and interactivity between customers and their motorcycles, and bridging the industry one step further into the 21st century.
2015: After a long and extenuating debate lasting more than 30 years, Congress had finally approved a new law that, over the following five years, gradually increased direct and indirect taxes on gasoline. This resulted in a gasoline price increase of more than 50 percent. Back in 2011, people had once again observed that gasoline prices in the major European countries were more than double U.S. prices because of higher taxes and duties used to fund the development and maintenance of their transportation infrastructure. In the U.S., such policy had proven very unpopular since the early ‘80s and, as a result, the total spending for the development and maintenance of the transportation infrastructure as a percentage of GDP had been constantly declining over the years to a level that, by 2010, was less than half the average level found in major European countries, a situation that was clearly unsustainable. Faced with a crumbling infrastructure, a level of road fatalities 60 percent higher than Europe, several collapses of roads and bridges, severe traffic congestion, and a still-lagging job market, Congress finally found the strength to face reality and increase the level of gasoline taxes and funding for the transportation infrastructure. After a few years, the decision turned out to be very popular, as the transportation infrastructure improved visibly, road fatalities and traffic congestions declined, and significant job opportunities were created for construction workers.
2016: For the first time ever, new motorcycles with engine displacement of 250cc or electric powertrains targeting millennial potential new customers represented the largest share of new product introductions by all major OEMs. With about 21 million millennials already older than 25, younger customers with their different product requirements and a higher propensity to ride already had started to influence industry retail sales and OEMs’ new products development back in 2011. With an additional 60 million millennials expected to turn older than 25 in the period of 2011–2025, leading OEMs made sure not to miss the new market opportunity.
2017: A major OEM and a major player from the travel and lodging industry announced a new partnership to launch a new travel and ride offering to jointly promote the discovery of our beautiful domestic resort destinations and the joy of riding. With one single click, customers could book vacation packages in many unique domestic destinations that included motorcycle rentals. The offering turned out to be very popular with both younger customers and older empty-nesters, and was quickly emulated by many other businesses, creating a whole new segment in the domestic travel industry and a significant expansion of opportunities for recreational riding.
2018: The editor of a leading industry consumer magazine was nominated as the Powersport Industry Executive of the Year for his outstanding contribution to the development of the industry. Over the last few years, the magazine had gradually rebalanced its focus from reviewing new products to helping consumers deal with the many lifestyle choices needed for the usage and enjoyment of the industry products: what are the implications of commuting on a scooter? Who are the best motorcycle safety trainers? What is the annual budget required to practice the sport of motorcycle racing? How and where can I organize a riding vacation? Enjoying motorcycles entails a long series of decisions that goes well beyond which motorcycle to buy. By embracing this simple concept and delivering its content through print and multimedia interactive platforms the media industry had played a major role in increasing customer satisfaction and therefore in the growth of the industry. Everybody therefore agreed that the award was very well deserved.
2019: Three- and four-wheeled scooters and motorcycles are for the first time the highest volume selling vehicles among baby boomers. The company that led the development of those products turned out to be among the fastest growing in the industry. For more than 30 years, baby boomers had been the largest buying customer segment of motorcycles in U.S. Their taste and preferences drove the development of the cruiser market segment and the sport market segment, among others, and shaped the evolution of the industry for many years. In 2010, the older baby boomers turned 65 years old. In the following 15-year period, an additional 57 million baby boomers were expected to turn 65 years old —their passion for motorcycles and scooters as high as ever. What were needed were ambitious OEMs willing to break some of the established rules and offer them the right products.
While the challenges had at times appeared to be quite enormous, to many it was always clear that the possibilities were also extremely compelling and it was very refreshing to see that once again a good story had indeed a happy ending.
Exclusive to Dealernews. Do you agree with Timoni's wish list for the industry? Comment below. -- Ed.