It appears that the worst of the economy maybe over, but the motorcycle market is not likely going to rebound for a couple more years. But, that’s not the whole story. During this time of transition, the motorcycle industry — OEMs, aftermarket and dealers alike — needs to focus on improved marketing, offering better-than-great customer service and selling value over hype.
And, with a new generation of potential buyers bringing along spending habits, personal values and retail demands that differ greatly from anything the industry’s accustomed to, it’s imperative business learn how to reach these customers.
This was the general message coming from the Motorcycle Industry Council’s Inroads to the Future, its annual forum that puts the powersports business under the microscope. Now in its 13 year, the daylong meeting focuses on prevailing economic trends and what they might mean for the future of the industry in coming years. During this year’s meeting, which was held Oct. 27, the economic analysis was followed by a presentation of the emerging values of various segments of the American buying public.
As in past years, the forum featured Esmael Adibi, PhD., director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange County, Calif., Adibi, has solid credentials as a forecaster of economic events having predicted the housing crises several years before it actually occurred. Also returning was Paul Leinberger, senior VP, Western Region, of The Futures Co. New to the symposium was Alan Beaulieu, president of the Institute of Trend Research, a firm that is providing the MIC with trend information on the motorcycle/ATV market.
Adibi and Beaulieu cited a number of positive trends at play in the economy — a rise in GDP; a projected growth in non-residential spending forecasted at a 8.2 percent for 2012, vs. 7.6 percent in 2011; declining home prices; the fact that the supply of unsold homes has dropped to an 8 months supply, vs. a long-term average of 6.5 months; a rise in the “affordability” rate for homes, now at 13.5 percent of median family income vs. a long term average of 19.5 percent and a high during the boom years of 25 percent.
Beaulieu agrees that the economy's worst times are over, that there’s been a normal rise in retail sales, and that marketers need to focus on convincing consumers to buy powersports products. The overall economy isn’t strong enough to push consumers into dealerships, he concluded. He also noted that good employees need to be taken care of so that their attitudes will remain positive and strong and stressed the need for training, noting that, “Forty nine percent of customers are lost through poor service.” He predicted that the motorcycle industry will continue to see sales drop for 2011-2012; be flat in 2013; see further erosion in 2014; and then experience growth in 2015 through 2017.
Paul Leinberger noted that the industry is in a transitional time. Boomers are exiting the scene and being replaced by a possibly a bigger generation of buyers who are not only younger, but more Hispanic, not as likely to be married or have children, less rural and trending more to the South and West. This coming group will be the most diversified generation in history, Leinberger noted.
A couple major points of interest, Leinberger noted, are that this new group of consumers is less interested in brands than in value. They are more concerned about knowing, than showing, and they measure personal worth differently than previous generations. Rather than money being the standard, they value what they have gained in terms of time with family, knowledge, and knowing what they need to know to make their life better and are willing to trade cash rewards in pursuit of these values, he explained.
There’s a lot of information passed in a fairly short amount of time. The economic aspects are pretty much cut and dried, but the trends section should provoke a lot of introspection within the industry as marketers, sellers, and journalists.
Like Dealernews’ Facebook page: