Mar. 9, 2009 – Front and Center

By Neil Pascale
Editor
Besides being able to offer consumer tax breaks, the motorcycle industry could benefit even more from its inclusion in the recently passed U.S. economic stimulus package.
That was the sense from officials familiar with the $787 billion legislation that was signed by President Obama. The plan gives buyers of new motorcycles tax breaks for the remainder of 2009. Many of the details of the tax breaks — would it apply to only on-road models? What about 2010 models? — were still being worked out at the federal level at press time.
However, the fact that the motorcycle industry, rather than just the auto industry, became a part of the discussion regarding the U.S. stimulus plan could have far-reaching effects when other stimulus legislation is brought up this year, officials say.
“It certainly was a really shining moment for members of Congress that they would include motorcycles,” said Ed Moreland, vice president of government relations for the American Motorcyclist Association (AMA), one of the groups that were active in lobbying for motorcycles to be part of the stimulus plan. “They had the realization that it was a tangible benefit to a very large portion of taxpayers that deserve the same opportunity at an economic benefit every other road user was about to get.”
The stimulus plan allows purchasers of motorcycles, motor homes, new cars and lights trucks to deduct the sales tax they pay on a new model from their 2009 tax return. Online reports say the inclusion of motorcycles and recreational vehicles added about $100 million to the cost of the tax break.
Industry officials viewed the inclusion of motorcycles as a positive step.
“The U.S. economic stimulus plan should be a plus for our business,” said Henio Arcangeli, president of the motorsports group for Yamaha Motor Corp., U.S.A. “I also believe dealers that position this to potential customers as ‘this is now the time to buy a motorcycle’ should see a benefit.”
Dan Wright, American Honda Motor Co.’s senior manager of national field sales, said, “It’s really too early in the process to assess value. However, the fact that our industry was included validates motorcycling as more than just for recreational use.”
Bruce Stjernstrom, director of marketing for Kawasaki Motors Corp., U.S.A., said, “It sends a positive message to consumers just by the fact that motorcycles were not excluded.
“When the government recognizes your product at this level and it has positive implications, I think it can only have a beneficial effect,” he said.
The fact that motorcycles were included at all in the stimulus plan appeared to be the result of some late lobbying efforts.
The AMA sent a letter Feb. 10 to U.S. Senate Majority Leader Harry Reid (D-Nev.) and U.S. House Speaker Nancy Pelosi (D-Calif.) asking for the motorcycle consumer to get consideration in the legislation. “The economic benefit of providing incentives to the buyers of motorcycles is just as effective and just as necessary as providing such an incentive to an automobile or light-duty truck consumer,” Moreland wrote in the letter.
Moreland later told Powersports Business that neither the original House or Senate versions of the legislation had motorcycles included. There was discussion in the Senate about including RVs or motorcycles but “that was not accepted,” Moreland said.
The AMA then worked with Harley-Davidson and its membership, sending out a legislative alert to the latter group. “Thousands of people responded to that and contacted their legislators, both in the Senate and the House. It was evolving in real time,” Moreland said of the lobbying process. “One call led to another call that led to another call.”
The message the AMA and its own members brought was straightforward, Moreland said. “If you’re going to have cars and you’re going to have light-duty trucks, especially in this economy with fuel economy considerations being made and reductions to congestion and traffic, then it only made sense for them to include an incentive for motorcycles because more and more people are using motorcycles as their primary means of transportation.”
Bob Klein, director of corporate communications for Harley-Davidson Motor Co., says Harley’s dealer network helped pitch in with the lobbying efforts. “We did some of the traditional things in terms of contacting our representatives and some of the leaders of the legislations,” he said. “But we also encouraged our dealers to do the same thing on their end, really to mobilize a grassroots effort very quickly among the dealer network. I think all of those pieces came together along with what the AMA did.”
The fact that motorcycles are now part of the stimulus discussion, in regard to on-road transportation, could be a factor in future legislation, Moreland notes. “There will be additional opportunities,” he said. “We’re trying to identify where the opportunities occur right now and where we may see opportunities in the future.”
The plan also provided a 10 percent tax credit on all-electric motorcycles.