A roller coaster year for new unit sales
Industry retail sales of new units fell nearly 16 percent in 2008, but it was a vastly different descent for the industry’s largest two segments.
ATV retail sales plunged early, continued to accelerate in losses through the year before winding up nearly 29 percent below 2007 levels, according to data provided by the Motorcycle Industry Council (MIC).
On-highway motorcycle sales, meanwhile, had a roller coaster year, starting slow in the first quarter before gaining momentum with higher gas prices in the late spring and summer only to fall off in the second half. This segment, the largest reported by the MIC, fell 5.6 percent compared to 2007.
While the 16 percent overall drop represents a second straight year of double-digit percentage declines — 2007 totals were 10.4 percent behind 2006 — the industry seems to have weathered the economic challenges in the United States better than other recreational markets. Marine retail sales were off 27 percent through November, according to Info-Link, a private research company, and RV wholesale shipments through November were down 30 percent, according to the Recreational Vehicle Industry Association.
In comparison, the motorcycle market was in largely good shape through the first half. On-road sales were nearly identical to the prior year and scooter and dual purpose retail activity was going so well that inventories were low to nonexistent across the United States. Only the off-road market lagged behind.
The second half, and especially the final quarter, was a different story.
On-road motorcycle sales fell 14 percent in the final six months compared to the previous year. The final quarter, although historically not an important volume period for this segment, was even worse. Sales in the final three months plunged 28 percent compared to the previous year.
A clear trend that emerged in the past three years continued this year: MIC-reported ATV retail sales slip as new entrant OEMs, largely from China, continue to offer lower-priced alternatives in mass numbers.
Data collected by the U.S. customs and border patrol and published monthly by the Census Bureau shows Chinese imports classified in the ATV category have jumped from 112,000 in 2004 to 491,000 in 2007. How many of these were sold in North America is unknown as such retail sales are not reported.
Similarly, 2008 marked the fourth consecutive year of reduced MIC-reported ATV sales, although this year’s nearly 29 percent drop represents a much greater percentage fall than in past years.
This trend could alter in 2009 as Chinese imports were drastically cut this year. Through November, such imports were down more than 50 percent.
During this same time period, sales of UTVs also have skyrocketed. UTVs, which also are not part of the MIC report, accounted for more than 130,000 retail sales in 2007, industry sources told Powersport Business of the volume associated with MIC members (Kawasaki, Polaris, Yamaha and Arctic Cat.)
UTV sales in 2008, however, appeared to have flattened or slipped compared to 2007. (See p. 40 for more on this market segment.)
While scooter sales dipped in December, following the retail world as a whole, year-end retail sales finished well over 2007 levels. The MIC reported 76,748 unit sales for 2008, 41.5 percent increase over the previous year.
Yet, clearly the scooter market was much larger than that. Several manufacturers or distributors that do not report their retail sales to the MIC have reported big retail years in 2008. Genuine Scooters said earlier this fall that it expected to end its year having sold more than 12,000 units. KYMCO USA also reported vastly increased scooter sales after selling 15,000 units in 2007. That total figure includes ATVs but is thought to be made up of primarily scooter sales.
European bikes won’t be impacted by trade dispute
Motorcycles will not be on the list of European product that faces increased tariffs in connection with an import dispute, motorcycle industry groups reported.
The United States Trade Representative has decided against that measure as it deals with the European Union’s ban on imports of hormone-fed beef and beef products. Motorcycles over 50cc but not over 500cc from the European Union were initially considered to be impacted as retaliatory tariffs.
The Motorcycle Industry Council (MIC) says it worked with affected member companies and submitted comments opposing the potential tariffs on motorcycle imports. The MIC outlined the economic harm such tariffs would cause to American businesses and their employees whose livelihoods depend on the ability to sell these products.
“With climate change, energy conservation and traffic congestion being among the most pressing issues facing our nation today, use of motorcycles should be encouraged rather than discouraged,” Kathy Van Kleeck, MIC’s senior vice president for government relations, said in a press release. “Many of the motorcycles that were under consideration for tariff imposition are the most fuel efficient available in the marketplace, while at the same time easing traffic congestion and parking capacity issues.”
Cycle Trader, Kawasaki agree on co-op arrangement
Cycle Trader’s online banner ads will now be co-op eligible for Kawasaki dealerships, according to an agreement between the two companies announced today.
“Kawasaki’s agreement to allow online banner ads as a co-op eligible item is an industry first,” Gwyn Price, vice president of Cycle Trader, said in a press release.
“The move makes perfect sense as more and more dealers are embracing the Internet as an integral part of their advertising strategy.”
Cycle Trader’s new program off-loads the co-op submission process to Cycle Trader, thereby freeing up the dealer to concentrate on growing its business. In addition to filing dealer co-op claims at no charge, Cycle Trader guarantees reimbursement of all approved print and Internet claims.
“Clicking on a Cycle Trader co-op banner ad will lead the customer exclusively to Kawasaki new and pre-owned inventory — a huge benefit for our dealers,” Cinder Strahl, senior coordinator for Kawasaki’s co-op advertising, said in the press release.
KTM reports decline in year-end revenue; job cuts announced
Austrian manufacturer KTM reported a revenue decrease of 11.5 percent compared to the previous year.
The company also has announced elimination of 300 positions, according to the Austrian Times. The report said the company would lay off 150 workers in its leasing division and 150 core employees by April this year.
Sales in the company’s Sportmotorcycle Division fell 15.5 percent from a year ago due partially to a decline in off-road sales. The company cited decreasing Enduro model sales in the United States as one area affected.
KTM did say its zero emission bike, an Enduro motorcycle, is still planned for production for 2010.
Metric OEMs increased shipments to U.S. in December
Metric manufacturers increased their motorcycle exports to the United States and Canada in December.
Shipments from Honda, Yamaha, Suzuki and Kawasaki to the United States increased nearly 11 percent over the prior-year month to 34,228, according to the Japan Automobile Manufacturers Association.
Shipments to Canada rose nearly 15 percent to 3,647.
The shipment increases come after metric manufacturers decreased exports to North America in November.