September 24, 2007 – Sport bikes: solid sales in a slow market

By Steve Bauer
Managing Editor
Despite a struggling economy and lackluster sales in parts of the sport bike market the past two years, manufacturers are pinning their hopes that two particular segments — the 600cc and 1000cc — will continue to pull in both new and returning customers.
While the short-term future of the sport bike market looks bright, manufacturers worry about the long-term effects the dragging economy will have on sport bikes.

An area of growth?
Michael Lock, CEO of Ducati North America, says in terms of market growth, there are two subsections manufacturers are keeping a close eye on as far as overall sport bike sales go: the 600cc segment and the 1000cc, or as he calls it the “leader bike market.” Lock says the 600cc market is down while the 1000cc has seen a little growth.
“We all know why (600cc sales are down), this is all about interest rates and customer confidence,” he said. “This is about people’s mortgages getting yanked up, and it’s about people paying higher annual percentage rates on things they buy and having less disposal income.”
While Lock is concerned about the short-term future of the 600cc market, other manufacturers continue to see increased growth in that area.
“We’ve had great success in the last several years with our GSX-R sport bikes,” said Glenn Hansen, the communication manager for American Suzuki Motor Corp.’s motorcycle and ATV division. “In particular we’ve seen great numbers from our GSX-R 600, which has been our best seller and the industry’s top-selling sport bike. And we really don’t see a lot changing in that category.”
Hansen says the American sport bike buyer will always be intrigued by the 600cc segment for a number of reasons — racing, the lifestyle, the look and customization and overall performance riding. Because of these factors, he foresees continued growth for the 600 class.
“For the GSX-R 600, that bike just continues to sell so well for us, and we are on track overall with that bike as far as our budgeted outlook for the calendar year 2007,” he said, “so we don’t see a slowdown in that 600 class.”
Kevin Foley, Yamaha’s street bike media relations manager, says his company continues to see growth in the 600cc class as well.
“I think the 600cc segment is always going to be important and do well, because in that category you get a lot of bang for the buck, so to speak, and you’re going to attract not only an entry level guy but also a more experienced rider as well,” he said. “I think that segment, even if there wasn’t any growth, is still extremely important because a lot of riders enter the market there, and maybe down the road, they trade up. So it’s important to us. We’re going to keep evolving that product; we always have. We have a strong race effort and that’s going to be a priority to us regardless of what the numbers show because it’s a foundation of our sport bike products.”

Gauging the 1000cc market
A second area of the market manufacturers see room for growth in is the 1000cc segment, which is marked by a more mature, experienced customer base that has the disposable income to continue purchasing motorcycles despite a struggling economy.
Ducati’s Lock says the 1000cc market has seen about 3 percent growth this year, which doesn’t sound like a lot, but it is when compared to most other bike markets (especially cruisers) for 2007.
“The 1000cc is the mature guys who have disposal income,” he said. “So it makes perfect sense to me that the 1000 market is quite well propped up and growing because those guys are less affected by macro economic factors.”
Foley says Yamaha’s 1000cc model has always created positive sales for the company, and he doesn’t see that changing despite the tough market conditions.
“Even though the market is maturing right now, you’re still seeing growth in certain segments, for example the 1000cc sport, which we call the naked segment,” he said. “Our bike, the FZ1, has done very well in that segment in the past and currently, and you’re seeing more mature riders returning to that segment.”

A bright future?
Despite the recent market downturn and flat sales in many parts of the industry, OEMs see great potential in the future for the sport bike segment as a whole, as the segment gains more TV coverage, along with more technological advances and an increased awareness from younger consumers.
“A number of us here at Suzuki frequently need a track to rent, whether it’s for a photo shoot or race testing or a press event, and it’s more difficult to rent a road race track today,” Hansen said. “The reason is because more people than ever want to get on the track, whether it’s a club event or something else. We think there’s not only continued popularity in sport bikes themselves in the immediate future, but also that there are more things feeding the sport bike segment to keep it growing too.”
Hansen does admit there are some challenges the segment will have to overcome, especially continuing to offer great products and services in a down economy and even the potential economic effects of the upcoming presidential election next November. “We were just in a meeting recently talking about the upcoming election year, and there’s great mystery around a presidential election and people’s economic expectations and forecasting runs amok,” he said. “Other than that, the environment for motorcycling continues to be good, but there’s an uncertainty about the economy that keeps people a little more hesitant to spend right now.”
— Neil Pascale contributed to this article

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