United States. Motorcycles & ATV market down for the fourth year in a row

united-states-motorcycles-market

United States Motorcycles Market in the 2019 reported the fourth decline in a row hitting the lowest level in decades, with 640.608 sales (-3.6%) in the combined moto & ATVs segments. While Harley-Davidson and the top 7 brands have lost, KTM kept growing. BMW, Triumph and Ducati have lost, moderately.

 

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 continued. Indeed, year-end total industry volume was 640.608 (-3.6%) with motorcycles at 443.388 units (-3.1%) and ATV for the first time in this decade below the 200k, at 197.220 units, down 4.9%. The motorcycles sector (which includes motorbikes and scooters) is at the lowest level in decades, confirming the lost of attractiveness of the sector for young americans.

In these years, Harley Davidson has lost from 160.400 sales reported in the 2012 to 125.955 in the 2019 (-5.2%), losing 22.1% of volume between 2016 and 2019.

In the 2019, the top seven brands have lost volumes, not only the leader. So Honda was down 1.5%, Yamaha 3.5%, Polaris 5.9%, Kawasaki 6.6%, Suzuki 4.9%, Can-Am 1.2%. 

US market is one of the most relevant for any premium brands. In recent years the winner has been KTM, by far the leader in the imported premium brands, which was able to grow in the 2019 as well. After the record scored in the 2018, both Triumph and BMW declined moderately in the 2019, while Ducati and while has lost for the 4th year in a row.

United States Motorcycles Market

Market Overview

New Motorcycles sales figures in the United States peaked in 2006 over 1.1 million units (including ATVs) 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 home base 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 only 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.

 

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