New motorcycle registrations estimated at + 5.5 % for January to June ; au revoir free trade

Well , a few months ago I warned that there was no room for complacency where the health of the motorcycle market in Europe is concerned - that although sales were headed in the right direction still ( despite the 2016 / 2017 Euro 4 bump in the road ), that at any moment any one of a number of industry or wider economic issues could come along and change all that . At the time I was mostly thinking in terms of global economic growth , inflation , employment levels , interest rates , the stock markets , exchange rates and currency stability , consumer confidence and enthusiasm for riding - those routine disclaimers that populate the disclaimers of fragility that characterise life in the international motorcycle industry . Then , just as everything appeared to be going well , along comes a trade war - and now , working as we are in a market that is almost entirely predicated on the import and exports of metal components and finished goods ( apparel and some accessories excepted of course ), we find ourselves looking at the possibility for any number of largely unexpected and unprecedented , unintended consequences to stop the music . The ACEM data for the first quarter of 2018 shows that while mopeds now have their turn to suffer the impact of their Euro 3 to Euro 4 churn , motorcycle registrations in the EU were + 4.7 percent , and that while many of the smaller markets were still showing declines , the ‘ Big Five ’ that account for some 80 percent of sales between them were all up ( France + 9.1 %, Italy + 1.4 &, Spain + 16.7 %, Germany + 1.9 % and the UK + 7.4 %). The stats for the second quarter of the year ( to 30 June 2018 ) were due for release the week after this edition of International Dealer News went to print and will have been published in the following edition of IDN ’ s MotoWEEK newsletter .

Spain ( at + 17.14 %, 79,217 units ) leads the way in 2018 , with Italy picking up strength again at + 9.76 , having had a relatively soft first quarter (+ 1.4 % Jan- March / ACEM ); France is probably third , but no trade association data had been published for 2018 yet at the time of writing this piece ( ACEM data showed the French market + 9.1 % for Jan-March ); the German and UK markets have also both strengthened following uncertain starts to the year at + 6.87 % and + 3.48 % respectively . Based on this , and taking into account the ACEM figure of + 4.7 % for Q1 , a forecast for new motorcycle registration growth for April to June and for the YTD of between 4 % and 7 % would appear to be robust . My hunch would suggest that forecasts for Q2 of around + 6.5 %, with the YTD at around + 5.5 %, should be robust , indeed conservative . Of course , by the time the print version of this edition “ hits desks ”, the ACEM data will have been published . So , also in this edition ( pages 22 and 23 respectively - American Report ) are the first industry statistics that show some impact of the first stage of tariffs - the increase to 10 % and 24 % percent respectively of U . S . import tariffs on aluminium and steel . Two days before I wrote this piece , the White House meeting between President Trump and EU Commission President Jean-Claude Juncker had resulted in a declared shared aim of working towards zero tariffs on a wide range of goods ( including some of America ’ s massively subsidised agricultural produce ), but NOT automotive whole goods or components .

The iconic status that Harley-Davidson has spent 115 years cultivating had seen it firmly placed up front and centre ( along with Levi Jeans and Jack Daniels whiskey ) in the crosshairs as culturally and geo-politically significant targets for EU response . As a consumer of aluminium and steel , Harley in particular has become the global poster child for the spat between Trump and the EU . In June the company made two very significant announcements . First , that it would absorb the average of US $ 2,200 per bike impact that the tariffs would otherwise have on their retail price , rather than asking their dealers in Europe to pass it on to consumers ( these issues also affect Polaris Industries ’ Indian Motorcycle subsidiary , but it is unknown whether they intend to do the same ). Second , that with 50 percent of sales targeted to be “ international ” by 2027 ( Polaris have also said the same about international sales for Indian ), Harley would move production of its EU inventory outside the United States . It may be that more on this will have been unveiled in a Harley investor briefing slated for July 30th ( again , after this edition of IDN closed for press ), but either way , speculation that it would involve extra production activity at the Thailand facility that is due to start producing later this year ( or its Brazilian assembly plant ) is likely to be short term at best . In all probability Harley will seek to find a production solution within the EU ( that would certainly be the smart play ) as a hedge against future economic issues and production needs . Polaris is already in Poland manufacturing ATV and Side x Side units , and with a major German and Polish pedigree in Milwaukee , my hunch would either be Poland ( maybe Hungary where Yuasa is producing Lithium ion batteries ) or Germany , where Harley ’ s originally UK based European head office is now located ..