International Dealer News IDN 148 April/May 2019 | Page 4

• COMMENT • COMMENT • COMMENT • COMMENT • COMMENT • COMMENT • New motorcycle registrations off to a good start he latest batch of new motorcycle registrations from Europe's key markets show that sales in 2019 are off to a good start (see StatZone in this edition of IDN, pages 6-8). After the problems encountered with analysing 2017 and 2018 new model registration data arising from the 2016/2017 Euro 4 transition issue with motorcycle statistics (2017/2018 in the case of mopeds - so that data is still skewed), the year-on-year comparisons are now valid, and the YTD data untainted by artificially low or high official records. In Germany for example, the IVM has reported motorcycle registrations through February are running at +46.96 percent, reflecting strong February growth over the weather that triggered low volumes in February 2018 but, regardless, telling us, accurately and correctly, that the market there is off to an excellent start (12,877 units YTD; PTWs +43.86 percent/16,992 units). This despite the apparent economic softening there. Similarly in Italy, a market that has been a bulwark of growth in the past few years, ANCMA has reported new motorcycle registrations at +9.26 percent for the first two months of the year (14,447 units), with total PTWs (Powered Two-Wheelers) +12.11 percent at 29,597 total registrations for the first two months. While current data for France is not yet available, the monthly data for 2018 en route to a +9.00 percent (177,460) market performance showed growth accelerating as the year progressed, suggesting that sales in January and February should also have been robust, especially also given the better winter weather encountered there and elsewhere. In Spain, a market heavily impacted by the Euro 4 transition, ANESDOR has reported motorcycle sales for the first two months running at +9.71 percent (21,799 units), with total PTWs +13.85 percent/24,659 units). Even in the UK, where BREXIT issues are causing economic uncertainty all across the economy, the MCIA says new motorcycle registrations were +11.86 percent for January and February (9,640 units). In Poland new motorcycle registrations are +55.88 percent, albeit on low volumes (just 1,353 units), but new registrations are only part of the story there. Poland is still an important market for used PTWs from elsewhere in Europe that are receiving their first registration in Poland. Combined new and first time registered used motorcycle registrations were +36.28 percent for 7,596 units in total - meaning that 6,243 "new to Poland" used motorcycles were registered there for the first time. The Polish and French markets have been the slowest of the 'majors' to show recovery since the European market reached its 2013 nadir at 748,529 units, down from 1,014,775 in 2010. As we here at IDN have calculated (see IDN February/March 2019), the real growth rate for motorcycles in 2018 was probably lower than suggested by T the ACEM data at something like 3.12 percent (rather than the 9.89 percent officially recorded). The 2016 growth was, in reality, more like +6.5 percent (than the official +13.27 percent), and for 2017 the 50,000 - 65,000 (IDN estimate) of 2016 Euro 3 pre- registered motorcycles actually sold "as new" by dealers in 2017 mean the market was likely in the region of +2.53 percent rather than the officially reported -9.50 percent that sent the market into a tailspin. In percentage terms that is a radically different interpretation of market performance. While the units are still the units (the motorcycles concerned were sold and are on the road), the 2013 through 2018 five-year picture of +34.14 percent growth (255,534 additional new units sold) suggests a much smaller but perfectly healthy and, importantly, sustainable annual rate of growth (especially given what happened with the impact of the financial crisis). That trend led us to predict that 2019 growth would likely be a more realistic and, yes, more sustainable in the long term, +3 percent growth for the year - which would still be an entirely acceptable outcome for 2019, especially in the face of the growing economic headwinds. However, while I don't recommend anybody yet to start thinking that this year may see upper single digits of growth by year-end, let alone low double digits, the excellent start to 2019 is "units in the bag" for now and may, just may, point to another uptick in the rate of growth ahead. Something else that is also noticeable from the registration data is the trend towards increased demand for 'middleweights'. While some manufacturers are still doing well at the upper end of the market in terms of displacements thanks to new model initiatives - Ducati with its V4 Panigale, BMW with is 1250 GS series, and KTM with its "Daddy Duke" - the real action, the real jockeying for market position is in the 500 to 900 cc market. If, as Harley-Davidson now believes, pre-owned is the new "entry level", then 'middleweights' look destined to be the pathway for millennials to stay with the sport and progress to more ambitious spending patterns as they age. In this respect, watch out for the impact that Royal Enfield will likely be about to have with its new 650. And if only some of the other re-birth and other retro- brand middleweight projects materialise (Triumph/Bajaj, Norton/Zongshen, BSA/JAWA/Mahindra and others), then 'middleweights' at the kind of price- points being talked about could turn the market on its head in terms of who is buying what and at what price in the next 10 years. "radically different interpretation" Robin Bradley Publisher [email protected]