Hope In A World of Falling Sales

Don Brown numbers financial outlook

LET'S TALK SOME ABOUT NUMBERS, usually one of my favorite topics, although given the way sales have gone for the past couple of years, it has been no fun for almost everyone. Can anyone remember the last year that the industry experienced a double-digit sales increase in motorcycle sales? Close your eyes and think.

OK, it was eight years ago in 2001 when sales increased 19.97 percent from 636,000 units to 762,000 units. This was just motorcycles. If we add scooters and ATVs of the type we track (no Chinese vehicles), the industry was retailing 1,541,480 new units.

Can you guess, say, within 50,000 units, how many total units of all types will be sold this year? (The answer is on the opposite page if you can't guess it.) Would you believe just 862,984 new units? This includes scooters, all motorcycles and ATVs (except side-by-sides and Chinese products).

Reading these statistics can take your breath away. In eight years industry sales have had the wind taken out of their sails. But the question on the table now is, when will the industry's sails billow with a hefty ration of wind once again?

There are too many easy-to-ask questions and, I confess, too few easy answers. While it is easy to blame this trend on the economy, I believe that is the only answer that makes any sense. Sure, there are other factors involved, such as used bikes. They, along with the products needed to fix them up, are looking good to quite a few customers.

But still, it's the economy that pops up as the only answer that really makes sense. But everyone can't just give up when sales get tough. This is when we'll see the difference between those who do and those who won't. The numbers are tough — no doubt about it — but sales eventually will rebound. When they do, turn to our predictions to see whether we think the recovery will hold.

When you look at total retail sales for the past three years, it doesn't look as if the industry is in as much trouble. But when you look at each category individually, you quickly get the feeling that sales certainly could be a lot better!

Take cruisers, for instance. We expect cruiser sales might reach 168,000 units this year, but last year cruiser sales were about 292,000 units. And here's another one from the cruiser basket: Dealernews in 1991 proclaimed that the cruiser would be the industry's top model type and should be expected to lead the industry in sales.

Let me make another prediction: Harley-Davidson will come out of its lackluster performance by continuing to cater to minorities. Last month Harley again sponsored National Bikers Roundup, an annual camping rally organized by African Americans. Harley is also making strides with its Harlistas marketing.

The Motor Co. even could come out with motorcycle design elements that target specific heritages. If Harley did this right, as I think it could, it would deserve a major design award. This is an idea that has been under our noses since the beginning of the Harley-Davidson reacceleration in the U.S. motorcycle market!DJB

Editor's note: The decline in economic conditions is affecting the powersports industry, as it's affecting most other industries. Our less-than-optimistic forecasts for this year may be partially the result of the manufacturers' depletion of stock at the end of 2008, then their not being able to have the right models for sales early this year. The rapid decline in sales has made it difficult to predict future sales accurately. Our forecasts are made with the best of efforts and techniques, but given these economic pressures, we advise that the greatest care be taken in evaluating these forecasts for planning. Stay tuned! — DJB

COMPOSITE INDEX: 2008: 42.98 2009: 36.20*


Index is based on the author's analysis of the MIC Retail Sales Report, SEC filings of quarterly and annual reports, and other information provided by publicly traded companies (such as Harley-Davidson and Polaris). Readers are cautioned that these estimates are subject to error, which can result from changes in seasonal patterns due to unexpected weather conditions and fluctuations in the economy. Interruptions in the supply of popular models can also affect these forecasts. Forecasts are not intended for investment purposes. Questions concerning this index should be addressed to the author, c/o Dealernews, or the author via e-mail at djb-llc@cox.net. Composite Index Advisory Board: Lindsay Brooke, Motorcycle Historian and Analyst • Tom Hicks, Owner/President, Southern California Motorcycles • Paul R. Puma, GE Commercial Finance • Craig Southey, COO of Cycle Barn MotorSports Group

* The DJB Index is the square root of the total of our sales forecasts for motorcycles, ATVs and scooters. This index allows readers to look at (and keep track of easily) one number that is a summary of our predictions.