Japan. In the 2019 the market will mark a new negative record

Japan motorcycles

Japanese Motorcycles Market in the 2019 the Japanese domestic market is projected to hit a new record low.  Indeed, during the first three-quarters of the year sales were not recovering but steady the previous year level. Since October, when tax on sales of goods were increased from 8% to 10% the demand for consumers good in Japan sharply declined.

 

Economic Environment

Japanese economy slowed in SAAR terms in the third quarter as private consumption, government consumption and fixed investment growth all moderated. Moreover, exports of goods and services decreased for the third quarter in little over than a year, suggesting that the protracted U.S.-China trade war continued to hamper the Japanese external sector. Turning to the fourth quarter, the economy is expected to contract. On 1 October, the sales tax increased from 8% to 10%, which will likely drag on private consumption. Moreover, consumer confidence remained depressed despite ticking up in October, while the PMI measuring private-sector activity fell into contractionary territory in October for the first time since mid-2016

In 2020, the economy is likely to slow notably, largely due to the shackling effect of the sales tax hike on private consumption. Moreover, the U.S.-China trade war will continue to constrain the external sector. That said, the economy should benefit from ultra-low interest rates, spillovers from the 2020 Olympics and low unemployment.

 

Market Trend

Following the progressive decline reported in the most recent years, with the 2018 hitting the lowest sales level out of the last 50 years, in the 2019 the Japanese domestic market is projected to hit a new record low.

Indeed, during the first three-quarters of the year sales were not recovering but steady the previous year level. Since October, when tax on sales of goods were increased from 8% to 10% the demand for consumers good in Japan sharply declined and the sector was one of the worst, with October sales down 23.0% and November 23.6%, with year to date figures at 315.817, down 7.8%.

Sales reported for the market leader, Honda, in the first eleven months of the year are 163.671, down 0.9%

In second place Yamaha with 75.019 units (-4.0%) followed by Suzuki with 57.709 (-0.8%) and Kawasaki with 19.724 (-1.7%). The four Japanese brands hold 89.7% of market share while imported brands take 10.7%.

Among importers the leader is HarleyDavidson, despite losing 2.9% of sales. The fastest growing brand is Husqvarna, recently landed in the market, growing 100%.

honda-monkey-z50-mokik-moped

honda-monkey-z50-mokik-moped

Recent Years Trend

Japanese Motorcycles industry is inexorably declining, touching in the 2018 the lowest sales level in the last 50 years with only 369.114 units sold, near 10% of the 3.285.000 units sold in the 2012.

Few years ago this market was the second largest in the World while actually stands as 16th, behind Egypt and ahead of Sri Lanka.

Moreover, it must be taken into account that the needs for motorcycles will continue to decline due to the aging of the population and the improvement in the quality of light vehicles, and each manufacturer continue to shift the focus to export sales, mainly in Asia.

In the 2018 the market leader, Honda, the top motorcycles brand worldwide, sold 177.337 units, the second worst (after the 2016) domestic sales level in the last 45 years, holding 48.6% of market share. In second place Yamaha with 83.902 units (+4.2%) followed by Suzuki with 62.559 (-15.8%) and the leader among the “big bike” segment, Kawasaki with 21.261 (+22.6%). Importers sold a total of 19.940 units, declining due to the decline of the top seller, Harley-Davidson, down at 8.931 units (-11.1%), first time below the 10k units in the last 10 years. 

BMW lost 4.8% at 4.978 units, following their best sales ever in Japan, scored in the 2017.

 

Reason behind the decline

Before explaining the factors behind the inability to sell motorcycles in the country, it is necessary to first organize what type of motorcycle has ceased to sell. Speaking of motorcycles in one word, Japanese classification split models on moped, with below 50 cc or between 51-125cc. The motorcycles segments are three, the “mini bike” for engine between 125-250cc, the “small bike” for displacement between 250-400 cc, and the “big bike” with over 400 cc engines.

As said, the current number of domestic sales felt to nearly 10% of the heyday, but the most of the fall is concentrated in the moped segment. In the early 80’s, when motorcycles were in its heyday, scooters that can be driven with feet have become popular as a substitute for commuting, attending school, and shopping. At the time, mopeds boosted sales at over 2,8 million units in a single year, along with Honda’s Super Cub 50, which was widely used as a commercial motorcycle for newspaper delivery and home delivery.

In the following decades the small two wheels, with speed limit of up to 30 km / h, sales have gradually fallen due to the following reasons:

  • 3 Not exercise  To prohibit the license acquisition · purchase · driving by high school students, the exercise that was developed until the 1990s under the slogan “do not take a license · do not let · do not drive”
  • The exhaust emission control adopted since the 1998 forced the producers to change from a two-stroke engine that can be manufactured at low cost to a four-stroke engine that increases weight and mechanism and increases manufacturing costs
  • Reinforcement of parking violation enforcement    moped that does not take much space than the car, but despite the delay in the development of parking infrastructure has raised voices of doubt that it is the subject of parking violation.

The 50cc was an icon in Japanese motorcycle manufacturing. Honda was founded in 1948 on the success of the two-stroke, 50cc A-Type auxiliary bicycle engine, nicknamed the “Bata-Bata” for the sound it made.

The Honda Cub A

Honda Cub A, the first model of the series, introduced in 1947.

That was followed a decade later by what would become the most-produced motor vehicle in history: the Super Cub. Set to surpass the 100 million-unit milestone this year, it originally sold with a four-stroke, 50cc engine, but now is available with a variety of engine sizes in more than 160 countries. The 50cc version remains only in Japan.

According to the Japan Automobile Manufacturers Association, moped sold in the 2018 have been only 143.129. Honda takes 60% and the rest in slit between Yamaha and Suzuki.

 

Emission Standards are killing the cube

The final nudge toward extinction coincides with the imposition of tougher environmental regulations. Japan, like other nations around the globe, has adopted European Union vehicle-emissions standards as the basis of its own. Those regulations started solely as limits on pollutants in exhaust, but the fourth version — coming into full force this fall — requires on-board, self-diagnostic systems to make sure engines run cleanly for at least 20,000 kilometers (12,427 miles). That contributed to the purge of models such as Honda’s Z-Series and Little Cub.

The fifth iteration, effective in 2020, extends that requirement to the life of the vehicle. That should halve emissions within 20 years yet add as much as 111 euros ($130) to the cost of each vehicle, according to a 2016 study for the European Commission. That’s about 10 percent of the sticker price for some Japanese models.

“Toward 2020, product development is going to be extremely tough,” Yamaha Chief Executive Officer Hiroyuki Yanagi said. “Instrument controls will become more complex, and costs will go up.”

Japan’s Environment Ministry said it discussed the new emissions standards with car and motorcycle manufacturers, and concluded it didn’t make sense to adopt different local standards because of the global nature of the industry.

Bicycle related services catch up with bikes

The bicycle market is showing vibrancy year after year in light of the slumping motorcycle industry. Electric bicycles, whose performance has been dramatically improved and prices have become reasonable, are now commonly found in the city. In addition, the government regards the bicycle as safe, secure and environmentally friendly mobility, and decides on the “Bicycle Utilization Promotion Plan” to promote the spread of the share cycle and connections with public transportation, and the installation of cycle ports in June 2018 And we are still pushing forward. Companies that responded quickly to government policies have developed share cycle services one after another, and in Tokyo, which is waiting for the Olympics, there has already been a fierce share dispute.

 

 

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