Jul 8, 2017

Sound Familiar?

Bloomberg just published an essay titled, “The Motorcycle Industry Is Dying.” Not a new concept and much of their analysis has been seen here first, but it’s slightly comforting to see some one else get it. The article puts a lot of weight on the new Honda Rebel 500 and I have to admit that is entertaining. I rode the Rebel 250 for the first time in a MSF class a couple of weeks ago and it is awful. There is nothing about that motorcycle that would have enticed me to get into motorcycling.

“Honda’s Rebel is the latest entry in a parade of new bikes designed for first-time riders; almost every company in the motorcycle industry has scrambled to make one. They are smaller, lighter, and more affordable than most everything else at a dealership and probably wouldn’t look out of place in the 1960s—back when motorcycling was about the ride, not necessarily the bike. They are also bait for millennials, meant to lure them  into the easy-rider lifestyle. If all goes as planned, these little rigs will help companies like Harley-Davidson coast for another 50 years.” Good luck with that daydream.

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I personally can’t imagine anything other than a hoard of electric bikes in the $5,000-territory that will turn the motorcycle economy around, but power to them for finally waking up and discovering Boomers are dying off. “A motorcycle is a picture of discretionary spending, and they can be tricky to finance even in a healthy credit market. Even now, with the stock market on a historic bull run and after the U.S. auto industry posted its best year on record, traffic in motorcycle stores has stayed slow. In 2016, U.S. customers rolled off with 371,403 new bikes, roughly half as many as a decade ago.”

Too little, too late has been my analysis for the last decade. This author sort of agrees, “The problem, however, with this sudden industry pivot to younger customers is that it may be coming too late. For years, it was too easy to just keep building bigger, more powerful bikes.“ It was easier and Boomers were dumb enough to buy into pretending that 60 was the age of midlife crisis. Ride down WI35 and look at all the Harleys out on the front lawns for sale. It’s over boys, now what are you going to do? One problem with a lot of these little motorcycles is that they aren’t as energy efficient as many cars. If anything makes motorcycles a purely recreational toy it is lousy fuel economy.

It could be a bigger trend than motorcycles, though. Driving, in general, has lost a lot of appeal to practically everyone.

5 comments:

  1. You are right on about the electric bike...

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  2. I think you're right about the sub $5,000 too. I have three college age kids and they are viewing driving as something that they'd like to not have to bother with, let alone a motorcycle and the obvious safety risk.

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  3. I'm going to modify my comment. I don't think it's money. A 1971 Honda CB350 was $900MSRP. At the Soc. Sec. wage index for that year it would take the average US consumer 286 hours of work to purchase one. You could buy a Rebel 300 today for 198 hours of work at the same Soc. Sec. wage index (most recent given is 2015). Motorcycles just aren't a viable transportation option any longer and certainly not in MN. I'm fairly serious about my commuting and my gear and at best I do 6-7K a year over 6-months. No one wants to bother any longer. Buy a cheap car or move to a City with decent public transport. My kids would rather have screen time anyway, despite my best efforts.

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    1. Last night, when we were walking the dog before calling it a "night," my wife and I tried to do our own "SS wage index" comparison. I can't decide if apples-to-apples is even possible, between 1971 and today. It is a whole different world with different economic factors and risks and so many more options for everything that I'm not sure a motorcycle would even be a consideration for me if I were 21 today. The fact that most of the bikes available get worse mileage than many of the small and low cost cars would be a deal-breaker. The lack of off-road riding options would kill about 90% of any motivation I might have. High repair costs, complicated machinery, awful dealer service options, and the likely lack of interest from my friends would dull the desire, too.

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  4. Interesting analysis, Brad. I haven't looked at the SS wage index to see how it compares to reality, but I wouldn't be surprised if all that is close to true. I keep hearing that Millenials have less expendable cash than we did, but I don't see how that is possible; since I was making $1.60/hour in 1971.

    I don't think it is money, either. It's risk, values, opportunity, options, and distractions. Honestly, most kids shouldn't be anywhere near a motorcycle. They're too easily distracted and too convinced they are capable of multitasking with no evidence to support that delusion.

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