The Next Really Big Deal

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And can we avoid the issue of age? Is the average age of owners of motorcycle dealerships older? Is the average age of people who sell motorcycles younger or older, or does it not matter a damn bit? Young "kids" whose dads buy motorcycles for them — we know they matter a great deal. So what is going on with them? Probably it's not just one thing but several.

One thing we know about but have almost forgotten: the average age of Harley-Davidson buyers. Remember when the baby boomers almost owned the industry? These weren't kids, either. In 1983 when the industry realized the boomers were unique, the oldest were 37 and the youngest were 17. Then by 1990 when Harley-Davidson had claimed its stake as the industry's No. 1 streetbike manufacturer, the oldest boomer was 44 and the youngest was 35. A more ideal customer base could not have been manufactured.

But what has Harley-Davidson got to do with the current situation? Nothing at all or, maybe, a whole lot. Why is it that despite the fact that we are forecasting Harley to be down about 19 percent this year, it will still likely lead the industry in the streetbike category? Currently, Harley looks to be the streetbike leader against Honda, which once was neck and neck with Harley. Today, Harley's streetbike share is still miles ahead of Honda; it holds a street share of 35 percent against Honda's 16 percent.

While I'm at it, I might just as well send kudos to Kawasaki, which is staying ahead of its own mark of last year's sales by 8 percent and is holding a share of 12 percent, which isn't bad in this struggle to stay ahead.

Who is today's "boomer"? Gen X is helping to carry the load. The youngest of this generation was born in 1979 and the oldest in 1965, which makes the oldest 44 and the youngest 30. But the shortcoming with this generation is, for one thing, in total they only number about 19.5 million. Whereas even if we count only the youngest of the many boomers, this generation still accounts for 40 million who are no older than 43.

Those with a keen eye will quickly deduce that it must have been the oldest of the baby boomers who took to the Harley story and who helped to drive Harley-styled cruiser sales from an estimated 188,000 units in 1988 to 418,000 units in 2000. That's a jump of 122 percent, a jump we had seen only in the '60s when Honda was using its research-and-development capability to capture its first market for motorcycles. This market had been sitting under our lazy noses while we rested without seeking a way to increase sales.

Talk about coincidence: In the days of Honda's glory it wasn't until Triumph decided to join 'em rather than fight 'em that it became the top "big bike" in the U.S. market.

Surely we must be sitting on another market much larger than we have yet enjoyed. But consider this: The next market could well be a market where merchandizing fun will be in the minority and merchandizing transportation will be in the majority. You might as well like it since it could be the Next Really Big Deal! — DJB

Editor's note: U.S. economic conditions are affecting the powersports industry, as they are affecting many other industries. When you see a serious sales decline forecast for a brand, remember the glut of used bikes that are bringing down prices of both new and used. Wholesale numbers are also climbing as import distributors are forced to take on inventory commitments. Our forecasts are made with the best of efforts and techniques, but given these economic pressures, we must advise the greatest care in evaluating these forecasts. — DJB

INTERPRETING THIS INDEX

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. Copyright © 2008 DJB Associates LLC, All Rights Reserved. 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.