United States. BMW, Triumph & KTM shine in a Market down for the 4th year in a string

United States Motorcycles Market

United States Motorcycles Market is moderately declining in the 2019, following the previous three years decline. Both motorcycles and ATV segments are losing terrain. Harley-Davidson is still the leader in the motorcycles while the gap towards the top challengers, Honda, could be closed in a couple of years. KTM, BMW and Triumph project the 2019 at new all time record.

 

Market Overview

New Motorcycles sales figures in the United States peaked in 2006 over 1.1 million units and took a huge hit with 2008’s financial crisis, which saw them plummet to less than half that figure. As the stock markets have recovered, bike sales have recovered marginally during the 2010-2012 and then stayed absolutely stagnant. Worse still, it seems that the sector is being propped up by an aging demographic, with precious few youngsters entering the mix with recent years figures moderately declining while over 500cc motorcycles segment lose terrain partially balanced by the smaller displacement and scooter growth.

In US, the ATV segment has always been very relevant and the country is the homebase for the top global player like Polaris, BRC (Can-Am) and Arctic Cat. These three, together with Honda and Yamaha represents the 90% of global and national sales. The ATV market in the last years declined from 230.000 units in the 2012 to a 2019 projection of 203.000.

Looking at the motorcycles segment, in 2003 only about one-quarter of U.S. motorcycle riders were 50 or older. By 2014, it was close to half. The market has been cruising on a demographic that may only be able to buy one more bike and the trend is not changing.

Indeed the market trend is dictated by Harley Davidson, the local giant, which is losing customers and sales year after year, while the others competitors are stable as total, with recently arrived brands, like Sym and Royal Enfield conquering customers.

A new challenge is against Harley, due to the aggressive pricing approach of Royal Enfield, (which is offering Harley-like motorcycles at prices lower by fifty to seventy percent. So, while the key question to survive for Harley Management is “How to encourage youngsters to buy a bike”, and Indian company found the answer, apparently easy: “Offer a choice with low displacement (350-650cc), easy to ride, affordable but not cheap, while caring about Brand image and heritage”. 

Approaching the US market, Royal Enfield people have been not only smart and aggressive, but ironic as well. Indeed, while in the process of re-building their brand outside of India, they have decided to open the first subsidiary, the best location found was in Milwaukee, Wisconsin, just few miles from the Harley’s global headquarter and historical museum.

To complete the picture, while Harley-Davidson management is working to expand the customer base and renovate the uniqueness of the brand, protecting the outstanding net margin level, the new policy launched by Mr. D.Trump, called “American first” is creating risk for Harley in the international business. Indeed, both China and Europe have immediately identified Harley-Davidson as the brand representing the American style and could increase duties on this motorcycles import as action in the commercial war in place.

 

Recent Market figures

In the 2018 total US Market figures have been 664.769, down 2.3% from the previous year. The motorcycles/scooter segment sales were 457.373 (-2.6%) while the ATV segment sales were 207.396 (-1.6%).

In the 2019 the trend unchanged and the steady decline continue. Indeed, after the first nine months of the year total industry volume was 482.286 (-2.1%) with motorcycles at 328.296 units and ATV at 154.000 units.

In these years, Harley Davidson has lost from 160.400 sales reported in the 2012 to 132.864 in the 2018, which was awful with a double-digit lost. In the 2019 Harley-Davidson sales in the first nine months of the year were 103.617 (-2.3%) and the gap to Honda is further reducing, while the Japanese projected to be market leader within a couple of years.

Indeed, considering the total industry, including ATVs, Honda already is the leader with over 145.000 sales in the 2018, and a full year 2019 projection at 140.000.

US market is one of the most relevant for any premium brands. In recent years the winner was KTM, able to increase total sales by over 10.000 units between 2012 and 2018.  Triumph performance as been very positive as well, with a record volume of 12.600 units in the 2018 and a full year 2019 projection for the first time above the 13.000.

BMW is a star in North America, reaching a record of 13.848 units in the 2018, but projecting the 2019 over the 15.000 units.

For many years, US has been the top market for Ducati and while actually is the second (after Italy) with 2018 sales at 8.100 units and 2019 steady.

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