The nuances behind a down off-road segment

Although this year’s economic turbulence has created an anomaly, the U.S. off-road motorcycle industry has largely followed two distinctly different paths in recent years.
The enduro market, once by far the largest of the off-road bike segments, suffered huge year-over-year losses compared to retail sales five and six years ago, according to Motorcycle Industry Council (MIC) data.
On the other hand, the motocross segment remained healthy and largely flat in terms of retail sales.
Some industry officials point to that pattern — a stable motocross base and questionable enduro segment — as something that will likely re-emerge in 2009. For now, 2008 looks as if it will be the fifth consecutive year that U.S. off-road sales will decrease compared to the previous year. And that decrease isn’t minimal. In comparison to five years ago, the 2008 total off-road retail sales number could be off more than 80,000 new bike sales.
But industry officials are quick to point out that the freefall does not extend to the entire off-road motorcycle market.
“A big chunk of the seeming fall in the off-road motorcycle market is that little niche of those 50cc bikes,” said Glenn Hansen, director of communications for American Suzuki Corp.’s motorcycle and ATV division.
Those low-displacement bikes, many of which were heavily modified with aftermarket parts, are thought to still be a relatively healthy sales number, but not necessarily by only MIC-reporting manufacturers.
“We feel that the Chinese imports had a major, major impact on the 100cc sales and below,” said Karl Edmondson, off-road motorcycle product manager for Kawasaki Motors Corp., U.S.A.
Edmondson points back to the 2004-’06 time period, when MIC-reported enduro sales began to slump as proof.
“During that time, everything was up,” he said. “Sport bike (sales) were up. Cruisers were up. Touring was up. Motocross was flat. Everything was either flat or up except for enduro. And we think if we could see the actual numbers, chances are the enduro segment was either flat or up.”
The actual numbers Edmondson refers to are not available to the industry as most new entry OEMs from the Far East do not report retail sales.
What is reported and what OEMs believe they have a better overall grasp of is the motocross market. Industry sources say that market remained consistent for several years, hovering around the 100,000 mark in annual retail sales in 2004 and 2005 and even increasing a bit in 2006. However, the following year saw a slight dip and that decrease has been even more pronounced this year.
“We really do see this as a slump but we don’t see this continuing to go down, down, down,” Edmondson said of the motocross market. “We see this as a little hiccup.”
Edmondson cites a few reasons for the 2008 downturn in motocross sales, with the turbulent economy having a notable hand in it as well as expectations from consumers on possible upcoming fuel-injection models.
“I think a lot of people have been holding out, waiting to see what would happen in the 250cc, 450cc categories,” he said.
Edmondson also believes inventory shortages among a couple of the metric manufacturers could have a hand in the reduced motocross sales.
The aftermarket
Although the overall off-road market is down, the consumer interest doesn’t appear to be waning by any noticeable levels. Primo Marotto, national sales manager for aftermarket manufacturer Scott USA, said he attended a sold-out EnduroCross race in Las Vegas earlier this summer. That attendance level did not continue at newer venues in South Carolina and Ohio in September and October but Marotto expects those events to draw more in future years.
“It was 50 percent full,” he said of attendance, “but the enthusiasm was great. But you know word of mouth. If they keep it in the same place or so close to the same venues, I think that (attendance) will pick up.”
Marotto expects the same from the overall off-road market, once the troubling economy settles down.
For now, the off-road aftermarket remains a challenge.
“It’s weak,” said Chuck Herman, national sales manager for Marshall Distributing. “The ATV market is soft and so is the MX market. I think that’s nationwide. And it’s not just nationwide, we’ve got a helmet partner in Canada and he reports the same thing. Now fortunately, that’s just one market. The street market is really strong and our business is really good.”
Edmondson of Kawasaki expects the off-road new unit market, at least a big part of it, also to rebound in 2009. “I really am optimistic that motocross will come back to what it once was,” he said. “The enduro segment, hmm, that’s a tough one.”