Scooters and small-displacement bikes are selling well. Will bigger bikes follow, and when?
When struggling through my pile of e-mail messages a few days ago, I came across one from a good friend who happens to be in the wholesale distribution business in the powersports industry. I've known this guy for a long time, and one thing I can say about him is that when business is gloomy there is still a smile on his face. He can sell you an icebox in Alaska on an ice shelf!
His message was brief — which is his style — but he seemed to be saying he thought the business was at the beginning of a turnaround. I had to find out what was on his mind. What categories of bikes did he think might be ready for increase that he was sure of but I wasn't? Had he beaten me to the conclusion that the business might be signaling a change for the better? I decided to ask him whether he had any information indicating that more than one bike category was about to start increasing again, and if so, which ones. His response was "All of the above — really!" That was his complete reply, and that was the end of our interesting-but-hardly-informative exchange.
If you are a member of the Motorcycle Industry Council, you will know from reading the Retail Sales Report that some categories (other than scooters) have taken a jump in sales. This is an indication of improvement in sales, but it is far too early to say we have reached the point where we can expect a general improvement anytime soon.
My predictions for this calendar year include scooters at an estimated 80,000 units, which would be an increase of about 48 percent. My forecast might have been higher had suppliers and their dealers been more confident of higher supplies.
Also of note are Kawasaki's small-displacement sportbikes: the Ninja 500 and 250 models. The latter was redesigned for this year and is especially popular. I forecast sales of these units, taken together, to increase 52 percent to about 24,000 units.
But that's not the end of it: I expect the dual category overall to increase by about 63 percent.
I'll throw in one more for good luck: My analysis indicates that the so-called traditional category ought to increase to an estimated 16,000 units. There are some really interesting bikes in this category. And during a time when the U.S. economy is on its ear, the models that make up this category are relatively expensive. These bikes are being sold on their technical and aesthetic merit, not because they save on gasoline costs.
Before I sign off, a final note to my mysterious friend: My analysis agrees with yours — in part. Still, I don't see any reason to be happy about the U.S. economy; in fact, this is the worst I've seen it for a very long time. So no matter how the winds blow in the short term, it's going to take a while to see our way out of this situation. But we are seeing bike sales increases, which is great. We just need to wait awhile before we can call for "all of the above"! — 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 forecasted 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 firstname.lastname@example.org. 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.