According to statistical data released by ANCMA, Italy's motorcycle industry reporting body, the total sales of motorcycles and scooters fell 24.17% compared to 2009. Even with multiple rounds of government cash incentives amounting €131M ($170M) on new purchases, and OEM discounting and financing deals affecting about 65% of sales, every month of last year revealed double-digit losses except January and February. December represented by far the worst, dropping 46.7%, compared to the same month in 2009.
The scooter market faired particularly badly, shrinking by 27.8% for machines over 50cc, year on year, to just over 213,000 units. Scooters and mopeds under 50cc dropped 13.9% to 85,921 units overall.
Motorcycles (classified by ANCMA as machines over 50cc and featuring a manual transmission) did better, with unit sales leveling out at 93,589 units, a drop of just over 14%. One sector that experienced significant growth were motorcycles over 1000cc, in particular the touring segment, which increased by 24%. Specific model sales data suggests that this is attributable to the surge on adventure touring models, lead by the BMW R1200GS, which has been in the top ten sales charts for years.
ANCMA president Corrado Capelli stated in a press release this week that "this is a sector very sensitive to incentive campaigns, and these years of difficulty in getting financing severely limits the ability to make new purchases." ANCMA believes that more action will be neccessary to rebuild confidence in the industry, if the negative slide is to be stopped.
Italy has long been the largest western market in the world, with peak years selling more that 450,000 units, including a large volume of high margin, large capacity models. The pressure from 6 consecutive quarters of double digit percentage sales losses has forced OEMs operating in the region to restructure, from high profile factory closures like Yamaha's Belgarda plant last year, to downscaling production and significant reduction in margins.
Vectrix LLC, a Massachusetts, USA based company, has announced the launch of the VX-2, an "urban commuting" electric scooter. The company press release states that the product is an electric equivalent to a 50cc gasoline powered scooter, with a range of between 60-90 km, and a top speed of 50km/h. Specific details such as battery chemistry, were not revealed, but the company says that it benefits from the technology and experiences gained from the larger VX-1, launched in 2007.
Vectrix began operations in 2006 with the goal of bringing state-of-the-art electric vehicle (EV) technology into the powered two wheel sector. After initial excitement and a reported sale of more than 700 units, the company began to experience difficulties, leading to a bankruptcy in 2008. Emerging from the shut down with new management, and a new corporate structure, the new company is promoting itself as an early leader in the emerging EV space.
via Vectrix LLC
Ducati has released documents outlining a technical recall for the 2010 Multistrada 1200S model. The problem is with the fueling map of the ECU (Electronic Control Unit), which may cause some bikes to stall during shifting. Ducati will install new mapping that it claims will solve the problem.
The recall affects 1,196 units.
Norton Motorcycles UK Ltd., the latest resuraction of the storied British brand, has taken on Pierre Terreblanche as the new Design Director for the company. In a press release, Norton CEO Stuart Garner said "“Pierre’s experience of bringing innovative new products to the marketplace will be a vital factor in developing the Norton range, whilst paying due respect to its’ traditions. Combining his flair for original concepts with Norton’s sporting traditions, will allow us to create a range of motorcycles bearing the historic Norton badge that will be unlike anything else in the marketplace.”
Terreblanche was made famous as the sometimes controversial Design Director of Ducati, from 1995 - 2003. Coming on board after the takeover of Ducati by American investment house TPG, Terreblanche was promoted publicly as the face of the Italian brand's design identity. He was responsible for the sometimes controversial 999 superbike, first generation Multistrada and most famously, the MH900e, an homage to a historic 1970's Ducati racing model, that first introduced retro styling to motorcycling. While these products helped raise Ducati from enthusiast obscurity to a household name, the designs were often met with criticism. Since leaving Ducati, Terreblanche worked briefly as a consultant for Aprilia, focusing on the Moto Guzzi brand. His relocation to England's Norton marks an end to a long career as one of the most influential designers of Italian motorcycles in recent years.
Norton Motorcycles has been steadily ramping up investment since the launch of the Commando 961 in late 2009. It is assumed that with the hiring of Terreblanche, the company plans to add several new models to the lineup.
ChinaMotorWorld, a leading English language trade publication about the motorcycle industry, published a year end review. The article describes how the Chinese market has been the largest in the world by volume for 17 years, but it has also been synonymous with poor quality, and poor commercial performance overseas despite large unit sales. Traditionally this has been attributed to the lack of spare parts availability, after sales care, inconsistant distribution and a very low profit margin pegged at an average of just 2.7%.
Over the past few years a dramaitic improvement in many areas, from manufacturing qualtiy and the first factory supported export ventures, have increased the profile of many Chinese motorcycle brands and products in global markets, but says the report, a lingering problem is the lack of indigeneous R&D and original design and innovation. The report cites many examples of collaboration with western brands, such as BMW, Peugeot and Piaggio as examples of technology transfer, but also points out that despite this, and substantial Chinese government support, national brands are still struggling to compete directly with western OEMs abroad. Chinese exports fell by over 6M units in 2010, mostly as a result of shrinking demand and liquidity issues in developed markets.
ChinaMotorWorld.com is an online and print trade publication focused on the Chinese motorcycle industry. Supported by China Chamber of Commerce Motorcycle (CCCM), it reports on national issues, reviews products and offers insight into the world's largest motorcycle market.
Toronto - International Supershow
January 7 - 9
A regional dealer show, largely unsupported by motorcycle OEMs, the Supershow is large and popular with the mainstream public. It is best known for shopping for north eastern North American motorcyclists during the middle of winter
Rio de Janeiro - Salão Bike Show 2011
January 13 -16
A regional dealer and exhibition show, largely focused on shopping, specialty motorcycle clubs, and some participating OEMs
New York - Progressive International Motorcycle Shows
January 21 - 23
A regional OEM and dealer show, part of the Progressive show circuit that feature in several US cities throughout the year.
Verona - Motor Bike Expo
January 21 - 23
A regional Italian OEM and dealer show, formerly held in Padova. This is Italy's second largest motorcycle show, and is best known as a debut venue for small, niche and custom European manufacturers.
The electric motorcycle market is growing at a phenomenal rate. With increasing pressure on consumers, governments and OEMs to reduce fossil fuel consumption and operating costs, the electric vehicle (EV) has quickly been taken up as the paradigm shift technology solution. But what is the true global picture on this emerging category, and it’s impact on markets? MMW explores the mass market electric scooter.
Shocking, not Disturbing
In 1995, the government of China declared the development and production of electric scooters and motorcycles to be a national priority, many years in advance of the current fashion for all things electric. The reason behind this bold initiative was not ecology in the idealistic sense, but economics. With more extreme population density mega-cities and exponentially increasing commuter traffic than anyone else, the Chinese were faced with an urban pollution problem of disastrous proportions. Respiratory sickness due to poor air quality and it’s subsequent negative effects on productivity and health care costs lead leaders to recognize that a newly mobilized Chinese middle class hungry for new motor vehicles would quickly undermine future growth.
Turning to wide scale electrification and zero emissions technology, was therefore a purely practical policy decision. Focusing on motorcycles and scooters came as a natural extension to a country with a long heritage of single occupant two-wheeled transport, bicycles, and the a nation with the world’s largest motorcycle manufacturing industry. As of 2010, China made more than 21M electric powered two-wheelers, including pedal assist bicycles, scooters and motorcycles, by far eclipsing production of all other countries in that area.
Net benefits of electrification are sometimes obvious, like increased energy efficiency, quiet operation and drastically lowered emissions per km traveled, but there is a much wider, more commercial benefit that often goes unnoticed by pundits. Encouragement of EVs has dramatically increased R&D spending on improved batteries and electronic propulsion, and tapped into the very advanced and developed computer and mobile electronics industries. The first truly practical EV car of the century is the Tesla roadster, a vehicle that leveraged this advantage by utilizing 6000 laptop batteries to deliver performance and range on par with its gasoline equivalent. The motorcycle industry, particularly in consumer electronics centers like China, Taiwan and South Korea will benefit tremendously by cross pollinating technologies in a similar manner, with the result being highly accelerated improvement in the EV space. Already today, these countries are the world leaders in affordable, high energy density batteries.
The original Piaggio Vespa, the archetype for the modern scooter, got its name for the sound its 50cc engine made, or so goes the story. The Vespa, like other iconic vehicles of that era, endeared itself to millions because in a post-war Europe with shortages of money, fuel but a quickly urbanizing economy, simple personal mobility was in growing demand. The modern scooter and its basic architecture has not changed since those early Vespas more than half a century ago. A compact engine is mounted on the rear swingarm, freeing space under the seat for storage, while the question-mark shaped spine connects handlebars, to protective shield, to the rear volume. It is a simple formula, one that is space efficient, comparatively light and very cheap and easy to produce. Copies of 1970’s Vespas are still in production today, a testament to the enduring quality of the basic design.
Electric scooters are currently derivative designs, utilizing for the most part identical frames and architecture, with only the gasoline engine substituted for an electric one. Some designs incorporate the electric motor in the rear wheel hub, freeing up more space for precious batteries, while others relegate battery storage to external luggage boxes.
The important development of authentically specialized electric scooters promises to make a leap forward in capability similar to that made by the first Vespa. By designing a vehicle from the start with batteries and electric components in mind, weight and cost can be dramatically reduced, the way the Vespa’s monocoque construction did 50 years ago. Several OEMs have presented prototypes of advanced EV scooters, while many others are forging ahead with incremental improvements.
If At First You Don’t Succeed…
The first genuine attempt at making a ground up EV design was by American-Italian start up Vectrix. Utilizing nickel-metal-hydride battery chemistry, the same that powered the famous GM Impact electric car of the 1990’s, and drive most rechargeable power tools, the Vectrix V-1 promised a staggering improvement in range and speed over typical lead-acid battery powered scooters. The chassis was purpose designed to contain the batteries in a structural spine along the floor, while the rear hub motor freed space for storage. A top speed of 100km/h and a maximum range of 60km suggested that the Vectrix was on par with maxi-scooters in the 125cc class, a staggering achievement. The product was also handsome, with contemporary styling, seated two in comfort, and was backed up by tantalizing promises of even better future products, including a dramatic electric superbike.
However, faults quickly overtook expectations and sales stalled. Reporting initial shipments of over 700 units, customers discovered that range was highly variable, falling to as little as 34km when driven on motorways, and production problems surfaced with the assembly plant in Poland. Additionally, the roaring economy of the early 2000’s meant that inexpensive fuel and powerful maxi-scooters offering a superior value proposition completely negated many reasons for buying the expensive V-1, priced on par with premium, 160km/h 500cc scooters like Yamaha’s sales leading T-Max. The Vectrix story ended with inevitable bankruptcy, and the assets being sold off to various companies, hoping to revive the brand with newer technology.
EV Scooter 2.0
Today the market is flooded with cheap, Asian made electric scooters, powered by conventional lead-acid car batteries, often sold in supermarkets and department stores. Many of them feature pedals linked to the rear wheel via chain, making them in effect mopeds, despite styling and promises to the contrary. However, an ever increasing number of quality, innovative and realistic designs are appearing, often from global OEMs looking to capitalize on growing demand. This new breed of EV scooters utilize the latest Lithium battery chemistry to develop power and range that easily matches expectations for the 125cc class of gasoline scooters. At last year’s INTERMOT and EICMA trade shows, nearly every major manufacturer from the Japanese Big Four to European legacy brands showcased some type of alternative energy motorcycles.
Peugeot, Honda, Suzuki, BMW all boldly feature EVs in their respective automobile portfolios, and most have developed real world EV motorcycles s well. The specialty two wheel OEMs in the western world like Yamaha, KTM and Rieju have followed suit, and some companies are exploiting hybrid technology such as Piaggio with it’s ground breaking MP3, and Bombardier with its similarly three-wheeled Spyder.
The EV scooter will inevitably overtake it’s gasoline counterpart in the coming years, as fuel costs continue to climb, battery costs tumble, and more and more commuters discover that shifting noiselessly through traffic without ever arriving at your destination smelling of two-stroke fumes make more sense. The manufacturers, for the most part, have only to continue to feed the consumer with choice, style and performance that meet reasonable expectations, to reap the sales benefit.
MMW World Electric Motorcycle Comparison
Honda Motorcycle & Scooter India PVT, the wholy-owned subsidiary of Honda Motor, has announced it plans to expand production in that country to 5M units per year in five years. The plans call for aggressive expansion of existing facilities in Rajasthan, as reported in May off this year, with the opening of a second plant there expected to ramp up production to 2.2M units per year by 2012. A third plant to be constructed in the Andhra Pradesh state, will complete the plans, according to the company.
Honda has announced several large volume expansion programs globally in the past 12 months, in India as well as Brazil ( see MMW Oct. 19, 2010 ) suggesting that the OEM's focus is shifting away from premium western markets to the fast-growing developing economies. The success of exporting low cost motorcycles such as the CBR125 and CBF125 from Thailand to Europe and North America has spurred other Japanese and European OEMs, and even Harley Davidson to explore offshore SKD and CBU production.
The Indian motorcycle market continues to grow, with 2010 sales have exceeding 7M units, an incease of about 17% for motorcycles and 32% for scooters, according to the figures released by the Society of Indian Automobile Manufacturers (SIAM).
via HMSI, Economic Times of India
According to a report in Bike India magazine, Yamaha's popular R15 sport model in the hotly contested 150cc segment, has been seen with new bodywork on public roads. The images accompanying the article show fairing designs closely related to larger European sibling the YZF R-125, and R6 middle weight super sport. Yamaha has been reported in various media outlets to be considering exporting Indian market vehicles to western countries, to take advantageof growing demand for low cost, small displacement motorcycles, as Honda has done with the CBR125 and CBF125 from Thailand.
Bike India claims to be India's largest motorcycle monthly publication, with an international reach throughout south Asia.
Photo, and information courtesy of Bike India
Last week, JD Power identified reaching customers in a new, younger demographic as one of the key challenges currently facing the motorcycle industry. As high-margin, high-capacity bikes like the BMW R1200GS became the major focus of the industry in the run up to 2008’s financial market collapse, the basic-but-appealing, utilitarian-but-exciting motorcycles that had brought about the initial success of many manufacturers were forgotten. Now that we suddenly need to rediscover them, motorcycles like that aren’t coming from the traditional players, they’re coming from relatively unknown companies using Far East manufacturing to deliver niche products at an affordable price.
JD Power reports that the average age of a motorcycle buyer in the US has increased to 49 years old, 12 years older than the median age of the US population. That shouldn’t come as a surprise, the western motorcycle industry chose to focus exclusively on high-disposable-income, older riders over the last several decades. Now, with those same riders aging out of riding over the next decade or, worse, unable to afford new motorcycles in the short term, we suddenly find ourselves needing to return to that young buyer. The thing is, those younger buyers have different needs and different tastes than the product mix currently on offer caters to. Enter ATK and Cleveland CycleWerks.
Both companies intend to combine western product ideals — high quality and high style — with the low cost manufacturing that’s available in countries like Korea and China. But, they’re pursuing that similar idea in very different ways.
Utah-based ATK sees its major advantage as being access to a large proportion of Harley’s dealer network, something it plans to exploit with a range of entry-level motorcycles assembled in America from components made by S&T motors (formerly Hyosung) in Korea.
Cleveland CycleWerks’s business model couldn’t be more different. Its 30-year-old leader is designing bikes specifically to cater to the tastes of his peers, then relying on an existing network of alternative-brand dealers to reach the young customers he hopes are ready and waiting for an appealing, small-capacity product. CCW’s model looks like a mirror of Honda 30 or 40 years ago. Their 250-500cc products are a response to the excess of Boomer-oriented 1,200cc v-twins and 1,600cc, six-cylinder tourers. UJM could become UCM as CCW designs, then imports bikes that are appealing on their own, yet ripe for customization. CCW’s second product, the 250cc, sort-of-cafe-racer-style Misfit looks and feels like a quality western product, just one that, at $3,195, retails for $800 less than the CBR250R Honda is pinning its youth appeal push on. Ironically, it’s the CCW, not the Honda, which most feels like a product of our time, meeting American youth consumer expectation far more successfully than the fully-faired CBR.
ATK suffers more from the burden of the negative image unsuccessful attempts to introduce Far East products to the American market have created. Currently offering re-badged bikes from Hyosung’s cut-price range, it’s hoping that a presence in major Harley dealers will be enough to move bikes in the short term. Still, ATK’s CEO, industry veteran Frank White, claims it’s the dealers’ desperate need for entry level products that’s motivated ATK’s push to sell them products. Where Harley is investing $60 million in a three year project to develop a new, entry-level learner bike intended to appeal to its Riders Edge program, new riders and women, the re-badged Hyosungs are giving dealers an immediate product to sell to those to whom 883cc or $8,000 is simply too much. Of course, the re-badged Hyosung Aquila is both more powerful and lighter than that Sportster 883, but there’s also an even lighter 250cc version that retails for just $4,000. The thinking is, that someone buying a 250cc Korean cruiser now, might come back to buy a Harley in the near future. Starting someone off in motorcycling creates new customers, even if the payback to the The Motor Company won’t come immediately.
While ATK’s plan to build American-style bikes from Korean components won’t bear fruit until 2012, CCW is importing and selling bikes right now. In fact, it plans to bring no less than six models to the American market next year (it also sells in Europe, Africa and Asia), of which it hopes to sell around 3,000 bikes a year, for each model. CCW’s business is unique; the company only employs its designer and executives in the Cleveland, plus a handful of quality control people at its Chinese factories. Distribution is handled by New Jersey’s PIT Motors Ltd, a company that services over 100 dealers nationwide with Asian products. This leads to very low overheads and therefore unprecedentedly low prices.
But, unlike Kymco, QLink or Hyosung which have tried and, largely, failed to penetrate the American market with low-cost Chinese products, CCW hopes to become a significant player. Even at two-thirds its projected sales volume, CCW will likely eclipse BMW in overall sales in the North American market next year. The way they hope to do so isn’t just with products that tick the cheap and reliable boxes, but with a quality product that appeals to western sensibilities.
“We’ve investing in quality where other people only invest in making the cost as cheap as possible,” says Cleveland’s Scott Colosimo, the 30-year-old designer behind the company. “The consumer is the one pushing for cheaper, cheaper, cheaper. We push for better quality. Good companies only want to work with other good companies. If we find, say, a gas tank manufacturer that we’re happy with, we say, ‘Hey, do you have any other factories that you work with?’ And we go visit that factory. Are they ISO certified? What quality controls do they have in place? Can we see some samples? Can we talk to their customers? And we have our own quality control engineers over there monitoring everything too.”
It’s designing products to and for American tastes rather than hoping products intended for the Far East might find some fans here that will be the key to CCW’s success. The ability to leverage large-scale Chinese manufacturing in order to adapt quickly to trends will also help. Next year, Cleveland will have a bobber, cafe racer, supermoto, as well as a 500cc v-twin cafe racer and muscle bike at a time when a manufacturer like Honda is still churning out large-capacity adventure tourers and cruisers. CCW can afford to follow trends where Honda has to make major marketing pushes to sell bikes competing in the same classes as everyone else.
“What we’ve found is that people in the US want to ride,” continues Scott. “It’s a purchase that people are willing to make some sacrifice for, but many can’t quite make the stretch to an $8,000 price tag. Dealers are left having to stock used bikes, there’s a huge hole in the market for this.”
Someone buying a $3,195 CCW today could become a lifelong rider and purchaser of new motorcycles tomorrow. Where there’s someone buying a CCW at 21 years old, there might be a someone buying a CBR five years later. Of course, they won’t be buying into an established brand, they’ll be buying into a new one. One that values them as a customer and caters specifically to them. With brand equity like that, will the next step be a Big Four product or will it be another CCW? You can bet Scott’s penning that next step up the ladder as we speak.
“That’s kind of our key, taking this person that wishes they could afford a motorcycle and showing them that they can,” concludes Scott. “You can afford a cool bike that makes you feel good, it doesn’t have to be a dream.”
Kawasaki has announced that the technical hold on the 2011 ZX-10 Ninja superbike has been dropped, after the company voluntarily fixed the problem. In early december, Kawasaki revealed that an undisclosed manufacturing defect related to the engine had been identified, after the initial market release of the motorcycle. As a result, the company shipped all unsold units back to the factory, and purchased back units already in customer hands to correct the problem.
The ZX-10 had a long and careful market debut last year, building up to the announcement that the bike had taken the prestigious title as the world's most powerful production superbike, with a reported 197hp. This quality issue had been widely reported in the final weeks of 2010, creating a high profile public relations disaster for the firm, taking considerable shine off of the brand's image. Kawasaki clais that the issue never endangered the users, and that the problem was strictly to do with longevity.
The 33rd Dakar rally, a world famous stand alone off road race, began today in Buenos Aires, Argentina. The event covers more than 9000km in 13 stages of varied terrain, from motorway to desert pistes and mountain tracks, with 445 competitors on cars, motorcycles, trucks and ATVs. With 180 entrants, the motorcycle category is the largest. Austrian firm KTM has been the dominant machine in past years, when rules allowed large displacement motors (900cc +), but with new restrictions limiting engine size to 450cc, the brand's monopoly may be challenged. Yamaha, Honda, Suzuki and Kawasaki are represented without direct factory support, while many European OEMs such as Rieju and GasGas have fielded official teams.
The event, named for its original destination of Dakar, Senegal in west Africa, has taken place in South America for the past three years, after mounting concerns about rider safety in politically disturbed areas of Africa caused several high profile incidents. This year the race runs in two countries, Argentina and Chile.
via A.S.O Dakar
According to ANCMA, Italy's motorcycle industry reporting body, the numbers for unit sales and registrations in November show "significant signs that of respite", referring to the market slide that has plagued the country since early 2009. The latest data indicates that total sales are down 12% across the board, relative the same month last year, with scooters trailing by 27%, and motorcycles over 125cc losing 13.8%.
These figures are dire, but ANCMA insists that they represent a upswing in comparison to previous months, where losses were far greater. In addition, the council claims that with the Italian government's cash incentive program expiring on November 3rd, these figures show that at the very least, free market sales are stable.
Italy, long Europe's largest market, has been unable to recover from the economic crisis which has crippled retail sales in most sectors. Recent doubts about the country's liquidity, and fears that it may join Greece and Ireland in requiring bailout from the European Central Bank have lead to lower than expected consumer confidence, further disabling sales of motorcycles and scooters domestically.
via ANCMA, The Economist
The biggest and most obvious trend observed in the new models released at October’s Intermot continued in Milan. Nearly all major OEMs released small displacement, premium entry-level machines as part of their 2011 development strategies.
From global leader Honda Motor, no less than three junior CBR sport models were introduced, in 125, 250 and 600cc capacities, each offering sophisticated styling and premium finishes, but also user friendly performance and prices. KTM branched into the 125cc on-road market with the smallest Duke model, made in India by the company’s parent Bajaj Auto. Even BMW unveiled downmarket models in their 650 range, and a concept scooter, promising to enter the lucrative high-volume commuter market.
This may seem like an unlikely development for western markets, where the industry in recent years has been typified by premium lifestyle brands like Ducati and Harley-Davidson, but in fact the less-is-more tactic has gaining ground since 2005. Back then, Honda introduced to the UK and southern Europe the Thai-built CBR125, which stunned marketers and pundits by rocketing to best seller status in those finicky markets. Follow up products like Kawasaki’s 250 Ninja and ER-6 family have similarly topped sales charts, often in unlikely places such as the United States.
For the legacy brands and Japanese OEMs, The main threat to continued growth over the past five years has been cheap imports from Asia, mainly China and India. With their increasing size, sophistication and quality, the only way to combat these up and comers is to leverage superior brand equity and technological strength, and meet them head on in the lower register of the markets.
So far this strategy has worked for Honda and Kawasaki, adding vital sales in a deeply recessed retail environment, and boosting image among young and casual enthusiasts as brands that are in tune with the new reality. At EICMA 2010, and the introduction of the budget Honda CBR600F faired standard, it appears that the majors are ready to play in entry-level middle capacity markets too.
Cheap and cheerful, it seems, no longer has to mean a choice between comforting established brands or unknown generic motorcycles.
Formet Yamaha Motor Italy general manager Enrico Pellegrino was appointed as the administrator of Peugeot Motocicli Italia, a subsidiary of French OEM Peugeot. Mr. Pellegrino had recently stepped down from his long standing position at Yamaha, and was expected to resume work within the industry shortly. He brings many years of international expereince, having worked for Ducati and Ford previously.
The Indian Government, together with Society of Indian Automobile Manufacturers (SIAM), announced the implementation of a Rs 95 crore ($21M) incentive program to help domestic manufacturers develop electric and alternative fueled vehicles. The plan requires OEMs to source at least 30% of the vehicles components domestically, to encourage indigenous technology and boosting local economies.
The move is part of the governments wider National Electric Vehicle Mobility Plan intended to integrate large scale use of electric vehicle (EV) use in the country within the next ten years.
via Indian Ministry of New & Renewable Energy (MNRE), SIAM
According to data released by JAMA, Japan's industry reporting body, motorcycle production in November was 58,205 units, up 7187units from the same month last year, indicating growth of 14.1%. This result is represents the eighth consecutive month of year on year increases in domestic production. More impressively, exports have risen, on average, 114.1% over the same period in 2009, with the largest increase attributable to Suzuki Motors, which enjoyed a 127.7% increase in demand. Domestic sales also saw healthy increases, with the 50-125cc class rising 59%, possibly due to large manufacturer incentives.
Bloomberg is reporting today that Harley-Davidson has reached an agreement with its national distributor, Grupo Izzo, to appoint new dealers in Brazil. The American OEM already has a firm market presense in the country since it began operating htere in 1993, retailing through 9 existing dealers, and assembling certain models in SKD fashion in Manaus.
Grupo Izzo is a well established distributor and motorcycle industry player in Brazil, which was in the news recently in connection with a proposed deal to handle manufacturing and distribution on KTM's new small displacement products. The city of Manaus is well known for its large concentration of motorcycle OEM factories and regional headquarters, including Japanese giants Honda, Kawasaki and Yamaha.
According to BikeIndia, a news magazine, Yamaha is reported to begin importing the FZ-1 Fazer sport model to India later this month. The FZ-1 is among the flagship models that the Japanese company typically reserves for premier western markets, aiming primarily at Europe. The report continues to say that although the machines will be imported from their factory in Japan, there is a possibility of bringing them in SKD form and have Yamaha Motor India assemble them to get around tarrifs.
Motom Electronics Group, an Italian reseller of mostly Asian sourced scooters under various brand names, announced the arrival of a new retro-styled Lambretta line of scooters. The new body style, reminiscent of the iconic original TV175 series from the late 1960's, is set to enter the Italian market sometime in 2011. Technical details, as well as manufacturing origin are not known, but two models are planned, in 125 and 150cc engine displacements.
Motom Electronics has been selling a 50cc low cost model known as the "Pato" under the Lambretta nameplate for some time, with limited success.
WTR TEN10 Racing, a company from Bangalore India, has formally announced its participation in the FIM Grand Prix World Championship in the 2011 season. The new team will be built as a collaboration between Ten10 and Italian WTR Racing, currently racing in the 125cc class. Team principles stated in a press release on the official FIM website that the goal is to introduce Indian racing talent to a world stage, initially on the 125cc 2-stroke platform, before the new 4-stroke Moto3 class takes effect in 2012.
Western markets are in a state of redefinition. With economic pressures, lack of credit, and the massive sales collapse in the premium sector since Q4 2008, an industry stuggles to rehabilitate, with subsequent lack of new product. MMW examines the fallout the crisis has had on R&D, new products, and the future of premium motorcycles for 2011.
In Western markets, motorcycling is a enthusiast driven sport, where even the vast number of practical commuters take their cues and pay homage to the recreational bikers who pay significant premiums to enjoy performance, status and image. The profits gleaned from sales of premium motorcycles, motorcycle accessories, and related products in a handful of European markets and the US generate such high margins as to render all others of seemingly secondary importance. While a small urban dealer in a volume market such as Indonesia or Brazil may need to shift a dozen vehicles a month to be considered cash rich, a similar dealer in Britain, Italy, or California may only need to sell three. Additionally, the typical new motorcycle purchase in rich markets also includes the sale of apparel and accessories worth upwards of 30% the total price of the motorcycle (in developing countries helmets or other dedicated gear do not have the same status or legal requirements). With mark-up on such items often in the 40-80% range, the Western dealer could expect to make a handsome profit on a relatively small investment of sales time.
With this profit structure, and in the climate of pre-recession times when easy credit and status-driven purchases flooded the market with eager consumers, dealers expanded facilities and inventory, often beyond reason. In North America, a worrying trend was the steady decline of the low volume, multi-brand dealers that had been a sustainable model of distribution since the motorcycle market crash of the early 1980’s. Several of the biggest OEMs, such as Harley Davidson, Honda and Yamaha began insisting on single brand franchises with hefty minimum investment and an inventory buy-in that eliminated many of these smaller dealers in favour of “big box” style super showrooms. Other brands, like Ducati began to create boutique dealerships in high profile urban areas to boost their image to the high income city dwellers they wanted to attract. While these strategies undoubtedly increased brand presence and consolidated messy overlap in some territories, they drastically increased the fixed overheads and the break-even point to keep them profitable.
The very sudden disappearance of regular new customers and existing ones making periodic upgrades put an immediate strain on a dealer network stretched out on credit and on a business model dependent on a reliable stream of revenue, just like most consumers themselves. Within the first 6 months of 2009, it became clear that stock of unsold new motorcycles was unmanageable and all OEMs dramatically cut production and shipments of new motorcycles, notably Suzuki USA which declined to import any new motorcycles for the 2010 model year. Many traditional, small mutli-brand dealers made do by peddling lesser known, low cost Asian imports and accessories while many of the independent super showrooms began to collapse.
The international trade show circuit and new product launches in 2008 and 2009 were severely curtailed in this environment. Press releases in the winter of 2008 from Kawasaki and Honda revealed the extent to which cuts had to be made. Not only were the entire racing programs scrapped, but so too was support for most existing contract teams. Neither they nor any other Japanese OEM attended the EICMA motorcycle show in 2009, and the tiny number of new models launched by the majors were trickled into the public consciousness via discreet press events, a far cry from the extravagant product launches of a few years ago, when OEMs would wine and dine members of the media for days in exotic locations as far afield and the Canary Islands, South Africa or Australia.
The public that feeds the industry in developed world markets is, as stated, the affluent enthusiast. Now on the cusp of financial recovery, the market is opening up slightly, revealing not only a fraction of that former staple consumer, but also a newer, cost conscious and needs-focused one. As MMW has reported in the past, the intersection of a reinvented economy, the arrival of electric start ups with tantalizing new products, and a hungry consumer base after a two year dry spell, creates a scenario that should point to a bumper year for exciting new models. Unfortunately, the severe cuts by OEMs at the start of the recession - particularly Yamaha, which had to buffer the worst year in their history with a staggering losses of over $45 million - also meant an almost complete halt to new product development.
Knee-High by July
As with agriculture, in industrial development you reap what you sow. The average new motorcycle program for a major OEM takes 36 months, for a clean sheet design. This means that for the 2011 model year, any new models we will see in this autumn’s harvest at the EICMA will have to have been started in late 2007, 2009 at the earliest for derivative models. Given what we know about the state of investment during that period, and the lack of teasers, leaks or hints coming from major OEM press releases as of mid summer, it is safe to assume that this will be a poor year for new motorcycles.
Of course, this pattern has not been the case for the smaller Legacy brands, most notably BMW and Ducati. Both have surprised and delighted the premium buying public in recent years with significant new model launches, such as the class leading BMW S1000RR superbike and Ducati’s reinvention of the all-road Multistrada. Both showcase world-first technological innovations, like traction control and active suspension, as well as a feature not normally connected with European Legacy brands : attractive pricing. The response from both press and public to these and other European novelties has been overwhelming, highlighting the vacuum left when the Japanese stopped punching out new products at their usual fast pace. It has also served to shift public expectations and momentum towards these medium-sized companies for the first time since the 1970’s. Globally, as MMW reported in Q1, Japanese brands still dominate sales, but if the consumer base in the US and western Europe is focused by a so-called hard core of enthusiasts, then the Japanese brands have lost their position of perceived authority. Only new and genuinely exciting motorcycles will tip the market’s favour back towards them, but those new products are not likely to be seen anytime soon.
Two significant new products launched by leading manufacturers in the past 12 months have presented a window into the last of the good times R&D. In 2009, Honda finally presented the long awaited and long hyped VFR, promising to deliver a technological tour-de-force in the Honda tradition. Now uprated to 1200cc, and with a novel dual clutch electronically controlled transmission, it was meant to crush the opposition with its ease of use, comfort and radical new styling direction. Similarly, Yamaha unveiled the Super Ténéré, a new take on their classic Ténéré sub-brand that invented the modern all-road adventure motorcycle genre in the early 1980’s. Like the Honda, Yamaha filled the spec sheet with impressive numbers, performance and hype that purported to boast of its impressive capabilities, and ground-up new design.
Both of these products are the result of many years of R&D and planning, but it is immediately clear that they also represent obsolete industrial thinking. An over-dependency on focus groups, past market performance and a myopic view of specification that exaggerates the importance of features has bloated these and many other Japanese flagship models into overweight, overpriced and over-designed white elephants. Both these examples and other recent models have met with wide criticism, notably concerning disappointing performance, the traditional Japanese strong point.
Of course, currency fluctuations and the suddenly high dollar-yen exchange rate inflated prices for Japanese-manufactured motorcycles, but this is a only part of the problem. Both Honda and Yamaha in the proceeding good years failed to capture a brand status that could absorb premium pricing in the upper market sectors. Where there is no genuine competition, like for example, against Honda’s Goldwing, they can charge generously. Elsewhere, prices being near equal, customers will generally favour Legacy brands.
As we head into the fall international trade show season, first with CIMA Motor (China International Motorcycle Trade Exhibition) in October, then Intermot and finally EICMA, the entire industry is bracing itself for another year of collective disappointment. Already editors of magazines in the US, Canada, Italy and the UK, have made it clear that expectations are low. The new austerity seen in everything from political policy making to individual spending, has all but eliminated the once lavish new product launches and splashy press introductions. Trickle-in press releases, grass-roots social media campaigns and blogged video “leaks” are the new direct route to the public. They are effective, but don’t yield the same “wow” or immediately measurable response OEMs have depended on for years.
Clearly, examples like the VFR and Ténéré show that the key drivers of new motorcycle model success are no longer add-on specification. But neither is today’s motorcycle market concerned only with pricing. Each new purchase demands more consideration, so any successful model must embody not only rational advantages such as cost of ownership and usefulness, but appeal to the raw emotional needs intrinsic in riding any motorcycle. Simply offering a technologically solid product at an attractive price is not enough in the post-recession Western world. and the competition will for their attention will be fierce. The brand that discovers the right message, and finds a gentle balance between tangible versus intangible needs will reap a bountiful market for the next generation of consumers to come.
While we all know that the Internet is merely an unfortunate trend that will eventually pass, it's become disappointingly obvious that publications distributed through it now wield significant influence even outside the young demographic we, as an industry, have otherwise successfully disenfranchised. While we wouldn't dare argue that the specialty print press aren't the only media outlets deserving your full attention, the ease with which new media outlets, in particular "blogs," can be manipulated makes targeting them, while distasteful, a potentially successful means to disseminate your brand message. Let's explore the various types of "bloggers" in an effort to formulate a series of best practices for manipulating their message.
The unemployed moto journalist
Who they are
Ingratiated into a life of free motorcycles and economy-class jet setting, this blogger saw the minor trade magazine he worked for going out of business as only a minor bump along the rode to never living a lifestyle within his means. Now equipped with free publishing software and a site named after himself, the unemployed moto journalist is busy espousing conventional wisdom and toeing the party line, all in an effort to keep the freebies flowing.
What value they represent
Invariably equipped with virtually no readers, the unemployed moto journalist’s willingness to unquestioningly regurgitate corporate messages nevertheless represents a potential feather in the cap of mid-level management. Continuing to invite them to product launches and providing them with motorcycle loans guarantees the ability to include in your reports glowing write ups from names the executives will recognize and enables you to use them as an example when asked what your new media action plan is.
Recommended course of action
They’re already on the list, keeping them there represents little risk and a guaranteed, if small, reward. Include on launches and provide motorcycle loans, but exert control by reminding them they serve at your pleasure.
The enthusiastic child
Who they are
The democratization of publishing caused by this Internet fad is perhaps nowhere more evident than in the rise of the enthusiastic child blogger. Not necessarily defined by their frequently young age, but rather their immature approach to publishing, the enthusiastic child honestly believes that they have a future in motorcycle publishing, but will move onto something more immediately profitable the second their mother begins to hint that she might start charging them rent for that basement room.
What value they represent
Through the competent manipulation of basic Internet tools like search engine optimization that comes naturally to their generation, the enthusiastic child can boast of a larger audience than the unemployed moto journalist, but what they won’t tell you is that once most readers realize they’ve accidentally entered the domain of an immature mind, they flee, never to return. Having said that, their enthusiasm can easily be manipulated to flatter them into thinking that you share their belief in a bright future. An occasional response to one of their frequent and annoying emails won’t just get your own name into “print” but your unfiltered and unquestioned agenda too.
Recommended course of action
Ignore as irrelevant until such a time as a minor controversy or turn of events requires a manipulated message. At such a time, a brief email will be received so overwhelmingly positively that it will surely be published in its entirety, if only as a way for the enthusiastic child to demonstrate their importance to the world.
Who they are
An honest motorcycle enthusiast who’s seen their career evolve to the point where they have a modicum of free time just as the alienation by their family has reached its peak. Possessing both the professional skills to produce interesting content and the money to indulge their love of bikes, blogging has allowed them to find a way to impress their own particular vision of motorcycles on the rest of the world.
What value they represent
Frequently obsessed with the motorcycles they lusted after in their youth, but were unable to purchase until now, the hobbyist is largely uninterested in the modern motorcycle industry. This is a shame because their publications often boast respectably large readerships. Rather than acknowledge the disconnect that’s suggested between the industry and potential customers by these publications, it’s probably best simply to enjoy their content without thinking too deeply about what it represents.
Recommended course of action
Strike up a friendly relationship with the hobbyist thanks to your mutual interest in motorcycling’s past and use it to remember why you got involved in this industry in the first place.
The mainstream media outlet
Who they are
Publications that possess millions of readers by virtue of writing about a topic other than motorcycles will, occasionally, feature motorcycle content on the infrequent occasions that it’s relevant to the outside world. Unfortunately, the effeminate, New York-based editorial staffs of these publications know about as much about bikes as they do about the part of their country that exists between the Hudson and Los Angeles.
What value they represent
Sure, they reach millions of readers and even the young people and women we keep getting told we need to find a way to include in motorcycling, but whenever they do write about bikes, they tend to focus on off-message aspects like speed or danger. Would you believe that mainstream publications have even been known to give more editorial space to alternative brands and motorcycles from outside the industry than they do the big four?
Recommended course of action
Dismiss as irrelevant.
The apex predator
Who they are
In another world, at another time, these are the people who would have quickly risen to positions of authority at successful print publications. Primarily motivated by a journalist’s calling to disseminate factual information and inform the masses, the apex predator seems immune to traditional propaganda. Fortunately, those two things — the focus on actual journalism and their ill-advised unwillingness to bend to corporate will — have alienated them from today’s print media environment and banished them to the wastelands of the the Internet.
What value they represent
Despite successfully reaching large audiences in a new demographic for motorcycles by trailblazing a new style of editorial content and through tireless hard work, the value these “journalists” represent to the industry is miniscule due to their refusal to toe the corporate line. By refusing to play by established rules, they render themselves irrelevant to our companies. Having said that, there is a certain negative value that has to be acknowledged; through foiling attempts to keep stories exclusive to our inner circle of friendly publications and an annoying predilection to publish off-message content, they often spoil our attempts to fully manage messages.
Recommended course of action
Avoid at all costs; hopefully industry-wide ignoring will make them go away. If contact is necessitated, attempt to undermine, but be wary, apex predators can often see through our clever ruses.
Reported on November 3rd in the Kansas City Star, Harley-Davidson is asking workers at its Kansas City plant to accept cuts in order to keep thier jobs. The plant's current contract extends until July 2012, but the company said it would make a decision about the future of the production facility by Q1 of next year. According to Harley Davidosn, there are “significant cost, efficiency and production flexibility gaps” that need to be attended to before a future can be secured.
Early last week, the OEM announced that it was opening an overseas assembly plant in India , its first in decades, as part of expansion plans into Asia. However, it has been speculated that this move, together with doubts about the Kansas City operation, are part of a wider restructuring plan to reduce costs and increase global competitveness.
via Kansas City Star
Data released by AISI (Indonesia's Motorcycle Industry Association), domestic sales in September increased 14% over the same period last year, to a total of 479,240 units. Some predictions, notably by PT Astra International, the country's largest vehicle producer, estimate that motorcycle sales could reach as much as high as 6.8M units this year, representing an increase year on year of over 17%, according to a report by Reuters.
The Indonesian motorcycle market is the third largest in the world after China and India, and increasing rapidly. The volume leaders in order of size are Honda, Yamaha and Suzuki, all of whom maintain rpoduction facilities there. The economy of Indonesia is the fastest growing in South-East Asia, with foreign investment rising along with consumer confidence.
Suzuki Philipines Inc. senior marketing manager Benedict Martin T. Arreola told the Mindanao Times that the Japanese brand has a five year plan to leap from the bottom spot to number one in sales on the islands. Suzuki branded motorcycles have been sold in the Philipines since 1959, with SPI, a wholly-owned subsidiary being established in 1985. Among the most poular models are mostly scooters and commuter motorcycles in the 100-150cc range.
Kawasaki Motor do Brasil LTDA, a subsidiary of KHI, has announced that three versions of the large 900cc Vulcan cruiser will be manufactured at the OEM's factory in Manaus. These models will join other medium and large displacement motorcycles already made there, such as the Z750, ER-6n and Ninja 250, since the facility initiated operations in Ocotber of 2009.
It is unclear if the Vulcan will be limited to local markets, or if the intension is to export to the lucrative US custom market.
Bajaj Auto, importer of Kawasaki Motorcycles in India, has announced that it is considering adding the ER-6 Ninja 650 to the line up following the success of the smaller 250 Ninja in the Indian market. Kawasaki recently opened its first wholly-owned subsidiary on the sub-continent with aggressive plans for expansion. In recent months, the rapidly maturing Indian market has attracted some prestige brands such as Harley-Davidson an BMW, long absent.
via Bike India
According to Hubert Trunkenpolz, Director of Sales and Marketing at KTM in an interview with Motociclismo Brasil, the company's new entry-level road bike will likely be produced in the Brazilian city of Manaus, in the Amazonias region. The new 125, was developed in conjunction with Bajaj Auto of India, KTM's largest shareholder.
"This is certain, we are going to produce the Duke 125 in Manaus. We are in final negotiations with a Brazilian company." According to Trunkenpolz, the company is also seeking a new representative in the Brazilian market, and that negotiations with a new partner, indicating that it was "probably Grupo Izzo", but that no further details would be given until the deal is signed.
The Manaus / Amazonias region is home to Brazil's motorcycle industry, responsible for producing over 2.5 million units annually, and including factories from Yamaha, Honda, and a substatial tier 1 supply network.
According to SUFRAMA, the regional economic development agency for the industrial Amazonia region of Brazil, motorcycle production this year is expected to reach a record of $33B in revenues (including all sectors), a 10% increase over last year. The area is home to Yamaha, Honda, and domestic motorcycle producers, with an annual production in excess of 2M units.
The Brazilian market has expanded steadily this year, despite growing liquidity concerns at the consumer level, and dropping exports.
Mission Motors, of California released a press communiqué announcing complete B2B electric drivetrain solutions for other OEMs. The two year old company revealed few technical details, but suggested that the performance would be similar to the competative Mission One racing prototype campaigned at the inaugural Isle of Man electric TTx Grand Prix in 2009, and recently tested by international journalists.
Products offered would be complete EV drivetrain systems for motorcycles and light vehicles, including AC motor, motor controller, and control software that would be customizable by clients, or programmed to bespoke specifications.
via Mission Motors
According to a statement by BMW India in a press release, the German OEM has made a new dealer and importer arrangement for the growing Indian premium motorcycle market. Hendrik von Kuenheim, General Director BMW Motorrad said "The BMW Group has already established itself very successfully in India with a local BMW automobile production and a sales network for BMW Group automobiles. Now the market for premium motorcycles is beginning to develop, too. The sales activities now commencing with our two experienced BMW Group partners are of long-term significance to BMW Motorrad. We are confident our motorcycles will swiftly become established in timely preparation for the growing market."
BMW will re-start operations with two official importers, Deutsche Motoren in Delhi, and Navnit Motors in Mumbai in the southern part of the country, as of December 2010. Previously, the brand had sold its F650 model in India but had not reached large volume success. The new plan will not involve local production or assembly, but import complete motorcycles from Germany.
via BMW, BusinessWireIndia
Harley-Davidson Inc. announced that it will open an assembly plant by Q2 2011, in Haryana India. The factory will assemble several models in a CKD form, with primary components coming from the company's root facilities in the US, and secondary parts from suppliers globaly . This move comes on the back of a Q1 announcement pointing to India as a key part of the H-D global growth strategy, having opened its first Asian subsidiary in India earlier this year.
India will be only the second country outside the US in which Harley-Davidson has a factory, after Brazil where another CKD plant has been operating since 1999.
South Korean giant Hyosung announced its return to the Indian market with a new joint venture. Partnered with Garware Motors, in Wai, near Pune, the venture will produce the GT650 roadster and ST7 cruiser as CKD products, on a new dedicated assembly line. Hyosung also communicated a strong commitment to after-sales care and customer support, suggesting that it will investigate the possibility of mobile, service at home options for new customers. This is a sharp contrast to previous years when the brand was distributed by TVS, and suffered continuous spare part and customer care shortages. Hyosung plans to launch initially from ten principal cities, then expand as demand and reputation grow.
via Times of India
Yamaha Motor Brasil released official images of a new enduro model, the XTZ250 Tenere. The single cylinder entry-level adventure machine is visually linked to the premium XTZ 660 and 1200 Super Tenere models, launched in Europe last year. Prices start at 12,900 BRL.
Italy's Ministry of Economic Development confirmed that the cash incentive program, already in place on motorcycles and scooters since spring, will be continued this fall. The measure stems from ANCMA -Italy's motorcycle industry reporting body- statistical information showing that sales of new motorcycles have fallen an average of 22% over last year, despite aggressive pricing and previous incenties of up to €750 per bike. The scooter sector, the largest in Europe, has collapsed another 26%, year on year, for the period of January to September. Motorcycle (categorized as gearbox driven, above 125cc) has dropped 12%.
Growing concerns about Italy's weak economy, towering state deficits and sovereign debt have dried up credit, as lenders on both retail and international level fear the country could tip into a Greece-like default. Consumer confidence inside Italy has reached all-time lows, so the current govenrment is injecting up to €110M ($154M US) in additional retail stimulus on certain goods, motorcycles being on that list.
market data courtesy of ANCMA
On Sunday, May 16, 2010 the first national electric motorcycle racing series in history kicked off at the Infineon circuit near San Francisco. The TTxGP series, based in England, hopes to run three parallel series this year, 16 events, in five countries culminating in a finals round in Albacete, Spain, to crown the first electric motorcycle world champion. On June 10 a small American firm won the second annual electric class of the famed Isle of Man TT race. These high profile events and many new electric bike product debuts over the past 12 months have highlighted the coming of a new breed of motorcycle. Detractors say the technology is unrealistic, while proponents hail them as a harbinger of a new, clean, exciting revolution. MMW examines the joys and pain of the new electric motorcycle industry.
Electric motorcycles are not new, but full electric products offered by the worlds major manufacturers are. After decades of lingering in the background, the electric power train is being taken seriously, at the forefront of the industry. As with most new vehicle paradigm technologies, the electric motorcycle has to plow through the long, dark shadows of doubt, before being accepted by the mainstream marketplace. These doubts are many, and not trivial, ranging from questions concerning the concept’s commercial viability, overcoming inferior performance, or its ability convince common motorcyclists that it can meet the long established norms regarding the daily practical use of the motorcycle. This initial trial period, again like most new technologies, consists of the usual industrial drama of wild claims, colossal disappointments, false starts, cruel new realities, ending finally with the euphoria of enlightening potential and decisive conviction.
This first quarter of 2010 marks the turning of this corner, the ending of the first difficult chapter in the story of the modern electric motorcycle, and the beginning of a new parallel motorcycle industry. This new breed almost certainly has its roots firmly entwined with that of the gasoline motorized motorcycle, but its future may lie closer akin to the world of consumer electronics.
What Just Happened?
Since the onset of the economic recession and its disastrous effect on the motorcycle industry, the public has been presented with a surprising number of start-up OEM’s claiming to have found the Next Big Thing. A decade of performance oriented excess, where ultimate horsepower and exclusivity married to drive even commuter-class scooters and entry-level machines into ever higher price and market categories, has left a market saturated with motorcycles that are fundamentally out of touch with the deep seeded needs and realities of common motorcyclist. This upmarket creep was particularly evident in western markets, the industry’s most lucrative profit center. When the downturn came, sales revenues quickly vanished. Leading Japanese OEMs resorted to quick fix solutions, such as by filling the lower end of the product register with cheap and cheerful, lower displacement and lower cost models, often imported from far East markets like Thailand, India and Indonesia. For the Legacy brands (Europeans plus Harley-Davidson), the response was to concentrate on core products, streamline production and emphasize brand values in a hope to renew interest.
As a consumer group, European and North American motorcyclists demand high perceived value, not just dollar value, from most products. Prestige can fill any numerical gap in a given machine, ranging from added exclusivity, to glamourous fit and finish, to brand equity. Often, technology is a principle pillar of this perception, such as Ducati’s famous steel trellis frame architecture, Yamaha’s Deltabox, or BMW’s Telelever front suspension. Such high profile mechanisms stir the consumer to “buy in” to the brand’s presentation as an industry leader, and by believing in it, the owner assumes a share of credit in its’ success.
Shrewd entrepreneurs and analysts saw the opening of a new segment in western markets. Rather than taking on the vast sea of cheap Asian-imported conventional motorcycles whose sole advantage is price, or the Japanese who can leverage brand, quality and volume, the timing was right to enter the marketplace with electric drive. This new propulsion system, if presented as a high added-value package, could create a new class of users by promising novelty, innovation and efficiency to rival traditional products.
Alignment of the Planets
Electric propulsion in motorcycles is an old thing. In China, it has been a stated government goal to be a global leader in this industry since 1995, according to the China Chamber of Commerce for Motorcycle (CCCM). In that country alone, over 21 million electric motorcycles (defined as two-wheelers, driven by electricity only, with and without pedals) were produced in 2009. That figure is set to almost double within the next five years, according to Pike Research, a consultancy. These vehicles are by and large mostly moped types, with a top speed in the 25-45 km/h range and with limited autonomy between charges. But they are a huge success because they are cheap to produce ($350-450 on average), easy to ride, economical to run and emission free. In highly congested Asian super-cities, where smog and noise are beyond acceptable levels, these vehicles offer an easy solution.
On the face of all this, the green movement of environmental responsibility is a strong emotional motivator, one that is exploited heavily by politicians and corporations. Zero emissions from the vehicle itself, the lack of intrusive noises while in operation, eliminating tune-ups and engine maintenance, and not having to use petroleum products at the user level are hugely attractive qualities to the marketplace. Green technology is prolific, the new must-have quality in all products and services. Vehicles in particular, are under scrutiny for the pollution and hazards they cause, making the recent boom in electric vehicles (EVs) the most hyped about subject in transportation.
Below the surface, an electric motorcycle OEM can greatly reduce investment and manufacturing costs, by divesting itself from the hugely expensive power plant business. Internal combustion engines (ICE) have hundreds of precision, moving machine parts, compared to just one on an electric motor. Similarly, electric drive eliminates the gearbox transmission or CVT, another complex and expensive mechanical component. Smaller OEMs often purchase ICE’s from a limited number of specialty companies like Piaggio, Minarelli and Rotax, because developing competitive power trains is beyond their resources. This makes rapid changes in products difficult, as the OEM is forced to either buy generic customer engines, or tie themselves up for indeterminate years to justify an exclusive engine program. By contrast, electric motor manufacturers numb er in the hundreds, making finding efficient partnerships easier. Similarly, the various electrical and digital parts needed, such as motor controllers and switches, are part of the colossal commercial electronics industry, once again allowing economies of scale to work in favor, rather than against, the relatively small volumes associated with motorcycle production.
The most critical component, and the single biggest barrier to electrification, is the battery. Every electric vehicle until recently has been hampered by the gross size, weight, and lack of energy density of its batteries. From the first electric cars that dominated the 1890-1910 period, to world war 2 submarines, to the failed GM EV-1 electric car of 1995, limited energy storage has been the achilles heel that sent all EV’s to an early grave. Vectrix, a pioneer in modern, mass-production on-highway EV scooters, very nearly proved that the electric motorcycle was viable. Using the same battery chemistry as the GM EV-1, it had good range and performance, but was hampered by high price. Conversely, Chinese lead-acid battery (SLA) powered scooters are cheap and offer decent range, but are painfully slow. In the EV world, the problem has been that between performance, range, and price, you could have any two qualities, but not all three.
This situation is changing. The advent of Lithium-based battery chemistry (such as lithium polymer or lithium iron phosphate referred to as LiFePo), developed for rechargeable consumer electronic devices such as laptops, cell phones and power tools, has drastically reduced weight, size and most critically, the price of battery storage. According to Boston Consulting Group research, the price (measured by cost per unit of storage) for one kilowatt/hour is set to drop from the current average of over $1000 in 2009, to under $800 by next year. Several automotive concerns such as the American Battery Consortium (ABC), Panasonic-Nissan and others, have set a goal of reducing this cost to under $400 by 2015. With their enormous volume, and billions in R&D resources, the automotive sector’s move for superior battery products is advancing the technology in a way the motorcycle industry never could.
These are the factors that have aligned creating the right conditions to incubate the modern electric motorcycle: the market opportunity of green-eager consumers; their willingness of some to spend more for a less performance-focused machine; and finally the more affordable, superior battery systems trickling down from automotive applications.
Who’s On First
At the 2007 EICMA motorcycle show in Milan, the electric banner was carried almost exclusively by Vectrix, and a handful of far east scooters. A Swiss company, Quantya, had produced limited numbers of an electric motocross bike based on an Asia imported 125cc chassis, but no major manufacturer was taking the idea of alternative propulsion seriously. Barely two years later, Honda and Yamaha have revealed plans for large volume production of refined, EV motorcycles, starting as soon as 2011, Suzuki claims to have hydrogen fuel cell drives in the works, and KTM has launched a pair of near-production concepts of an electric enduro.
But that is all still speculative. The excitement lies with the crop of new OEMs that are currently selling volume production electric motorcycles to customers. Zero Motorcycles of California has been building an off-roader since 2008, and this year has four models to choose from, including two road legal versions. According to Zero, they will ship 2000 bikes this year, a big increase over last year. Brammo, another American company, has been selling it’s Enertia for about a year, reportedly having made “about 700 units” according to one report. From Europe, Vectrix (the company had its base in the US, but manufactured the bikes in Poland) has faded into bankruptcy but Quantya sales are growing. Like Zero they have launched a road legal model as well.
Today these are the only genuine, modern electric motorcycle OEMs, companies that are solvent and regularly mass-producing alternatives to the generic Chinese and Asian scooters in any significant volume. Dozens of companies are announced each month, each proclaiming to be a manufacturing company, but most are either rebranding other OEM products, typically in the low end spectrum (such as Zap), or are little more than cottage industry businesses, making small runs of bikes usually based heavily on existing motorcycles (such as Native Motors, a small volume brand based in California selling EV conversion of an Asian 150cc standard).
Still more are all hype and public relation exercises, aiming to capitalize on the immediacy of the EV movement, and inflate their company value. Examples such as Mission Motors and Lightning Motors have made bold performance and range claims, often using the phrase “production motorcycle” in communications, but a finished production model has yet to be seen or publicly sold. Beyond a handful of prototypes or individual race machines, companies such as these have little industrial credibility unless they can produce what they have promised. The general public is currently open minded and optimistic about the prospects of electric propulsion in the next generation of motorcycles, but each loud public failure or false start begins to hurt the overall positive momentum in the marketplace.
And the market has many difficult questions and demands for this nascent industry as it is. Current motorcycle technology is refined to such a level that consumer satisfaction is a given, at least from a function point of view. The constraints of EVs introduces two different but equally important challenges : convincing the user of the reliability and safety of electric propulsion; and overcoming the faults inherent in battery electric vehicles (BEV), namely range anxiety and cost. Presently, a Zero X motocrosser costs 30% more than a conventional 250cc gas powered equivalent, its nearest performance competitor. However, it can only be ridden 45 minutes before requiring recharging, a process that can take up to 3 hours. The gas bike runs for about the same time, but can be refueled in minutes. Also, the high cost of the batteries means the EV suffers from cost cutting in other areas, using inferior cycle parts (brakes, suspension, wheels), and unpainted vacuum molded body panels to keep the price down. A typical motocross consumer has to weigh these faults against the advantages and be willing to change the way they ride and live with the bike in order to be satisfied.
Sales trends reveal that Motorcyclists are by and large conservative consumers, knowing what they like, falling into pre-defined categories of motorcycle preferences, and being almost universally resistant to big changes. Electric motorcycles present a fundamental shift in the motorcycle experience, from purchasing and ownership, to daily use and maintenance. Brammo sells its bikes through electronics retail giant Best Buy, while Zero sells directly to the public via its website. Electric bikes have no gears to shift, no oil to change, and need almost no tuning or mechanical work. On the surface, these are wonderful improvements for the user, but motorcyclists are not always easily understood.
The relationship and bonds between western consumers and their motorcycles are complex and delve into the realms of social science and philosophy, not confined by the strict needs of a person versus the abilities of a product. Tuning and maintaining a motorcycle is often considered a vital part of the motorcycle experience, as discussed in the famous book Zen And The Art of Motorcycle Maintenance, by Robert Pirsig. In it, the author draws parallels between keeping an imperfect vehicle roadworthy to the efforts people make to attain goals in life. Bikers are proud of their technical knowledge, skill with tools and ability to understand and improve the performance of their vehicles. With largely maintenance free motorcycles, electric propulsion takes away part of most intimate interaction users have with their vehicles, and takes motorcycles one step closer to being mere appliances.
Design too, must be rethought. Electric motorcycles are visually and architecturally dominated by their batteries. They comprise the single largest volume, and are normally square in shape once individual cells are linked together. Unlike conventional motorcycles, whose cylinders, radiators, fins, ducts and bolts have been pressed into our collective conscious as representational of power and sophistication, this clean “box” appears underwhelming. A recent magazine criticized the Zero for its’ “beer cooler” styling. KTM’s recent Freeride electric concept was disappointingly similar to its gasoline powered cousins, with the “box” concealed behind otherwise conventional mechanical architecture. Clearly, a new aesthetic must emerge, one that emphasizes electric power in a manner pleasing to motorcyclists, otherwise the EVs will blend into the mainstream motorcycle, where they will be judged directly, each fault highlighted in glaring comparison.
The road ahead for the EV motorcycle is long and bright, but most of the serious development is still to be done. The current start-ups leading the way are to be commended for their bravery, innovation, and for proving the potential of the electric concept. If the automotive world is any template, some of the start-ups will survive and grow, others will be absorbed by larger conventional OEMs. Most will disappear, the victims of bad planning, poor products and other typical market forces. However, it will take the majors, the Japanese Big Four, some of the Legacies and the Chinese to guide the EV into the realm of general acceptance by the west. Only when enough R&D resources are spent, and the technology and themes matured enough, will the average western consumer be tempted away from a gas powered motorcycle or scooter, to a future of power cords, recharging stations, and planning your day around charge times.
Electrification offers almost unlimited possibilities for change, from the design of the vehicle itself to the business of making them. It is the most exciting new development in this industry in decades, potentially the most paradigm-shattering thing to happen since the arrival of the first four-stroke, large displacement Japanese machines in the 1970′s. No other technology has promised to alter the way bikes are made, sold or used since the scooter CVT, and even that did not radically change the layout of the machine itself.
Electrification could dramatically democratize motorcycling, increasing the sales exponentially by making owning and riding one as easy as using a cell phone, thus attracting a new public audience. It could lead to a decentralized manufacturing scenario, where dozens or even hundreds of power train OEMs offer plug and play components directly to consumers, who buy rolling chassis from traditional brands. But there is the danger that all this rationalization could also sanitize the machine and the experience, diluting it into another disposable mass-market urban product. The appeal of riding a motorcycle has always been partly irrational, the need to prove with skill the ability to overcome the inherently unsafe and risk filled riding environment. This desire forms the core of any motorcyclist in the west, and though largely unspoken, forms the basis of the buying decision. The electric OEM that understands this first, shall more than likely reap the benefits.
The past year has been extremely turbulent for the entire motorcycle industry, particularly in Western markets. But there is a silver lining: the rediscovery of the humble Standard, the all-in-one multi-purpose motorcycle. Can this once dominant two wheeled tool help rebuild sales and public interest, or will it commodify the motorcycle, stripping from it the mystique of adventure that attracts so many? Market Watch examines the Standard motorcycle in 2009 - 2010.
The Way We Were
The motorcycle was born from the modest bicycle and the need to move faster and farther than human legs could peddle. Over the century that the motorcycle has existed, it has enjoyed the status as one of the simplest and most efficient forms of motorized transportation available. To hundreds of millions it is nothing more than that, a form of daily transport that allows them to commute, work, visit friends and relatives, conduct business and occasionally ride for sheer enjoyment. This pure functionalism is lost to most Western motorcyclists and industry personnel, because in the developed world the motorcycle has evolved from the transportation alternative to a car in the post war period, to a thrill used almost exclusively for pleasure. As a result, the past 25 years has seen an over-specialization that has split, re-split and regrouped categories into a maze of niche segments that are often difficult to understand, and not always commercially robust.
For nearly a hundred years, the differences between a basic motorcycle and one with a more dedicated purpose were almost invisible to anyone but experts. One look at typical 1960's era examples: a dual purpose Greeves Scrambler, a BMW R60 Tourer, and a street legal Velocette Venom, (see picture below), reveal how slight their respective architectural differences are, even if mechanically they share little. And within their respective segments, technological solutions aside, there too was little diversity. The top selling bikes within any category were largely variations on a theme. For brands to stand out, the products needed to perform better or offer a better value proposition. As a result, the motorcycle consumer had to understand mechanics and performance, or take the word of the dealers and press at face value in order to choose what was best for them. Unsurprisingly, the vast majority of sales went to machines that offered the greatest versatility in real world conditions. Any nods toward specialty use were just that, largely superficial add-ons like larger fenders, windscreens and saddlebags for touring; clip on handlebars, larger brakes and hot cams for sport; and so on. Today, we would call these accessories, or platform extensions, but until the 1970's, this product plan was considered a line up.
In the largest volume motorcycle markets today, this is still the case. In India, Brazil and the ASEAN region, the Japanese Big Four market a wide array of 150-300cc models, all based on a few common platforms. In the lucrative developed world markets, platform sharing had all but disappeared from the mid 1980's on, as increased margins on large displacement bikes allowed ever more chassis and engine platforms to develop for specific vehicle types. The vastly divergent market needs -maximum line-up economics vs. maximum model performance-per-segment- lead to the death of the multi-purpose street motorcycle. The so-called standard.
Over Breeding vs. Natural Selection
The strategy of self-defining motorcycle categories has been successfully used as a marketing tool to help differentiate brands and sub-brands from the competition. For example, intentional or not, the first Aprilia Scarabeo ignited a the modern "big wheeled" commuter scooter phenomenon by doing just that to an otherwise stagnant category. Offering a vertical, cute and purely utilitarian experience to the small wheeled, aero-styled scooters that were then fashionable created an instantly recognizable alternative. The Italian commuter class flocked to what was seen as a new, unpretentious un-motorcycle, creating a vogue for large wheel scooters of this type that still dominate the sector, such as the Honda SH "Scoopy" family. Not content to enjoy this success, Aprilia steadily expanded on this theme to create an entire Scarabeo product line, eventually marketing them as a separate sub-brand that reached from 50cc to the expensive 500cc maxi-scooter class. Competitors from Piaggio (prior to their acquisition of Aprilia in 2004), Peugeot, Honda and others all pounced on the sector, each spinning the look and marketing to create sub-sub categories in the hopes of standing out further still. Retro big wheel (Cagiva Cucciolo), sport big wheel (Honda SH300i), premium/luxury big wheel (Piaggio Beverly), utility, sport utility, and so on.
The modern Western consumer is accustomed to and expects this hyper specialization, yet a vast majority of first time buyers and even experienced motorcyclists don't understand the relative merits or weaknesses of these fragmenting categories. The result is a mixed message that often directs people to machines not ideally suited to them or their needs. A disappointing brand or product experience has a multiplicative negative effect on image, as word of mouth advertises what was perceived as the brand's false promise. This has ultimately led to ever more adherence to brand DNA-focused product alignment, that allows for virtually no deviation from a few key elements: a superbike has to be only the most extreme execution of a race track performance tool; a supermotard has to maintain all of its motocross architecture; a cruiser has to reflect chopper culture with no attention to comfort or robust usage. This despite all being primarily road motorcycles. The super-specialized, modern genre-motorcycle has become caricature of itself
The risk of this product planning model is more than alienation, but intimidation. The vast majority of potential motorcyclists admire and even desire the edgy personality projection that riding one suggests, yet secretly they are afraid of injury to themselves, their reputations, and bank accounts. The point of entry for many newcomers inevitably tends toward machines that look outwardly like the aspirational motorcycle they desire, but have the size, price and performance they can handle. When this type of bike is absent from the market, as it largely has in North America for the past two decades, then the consumer wishing to buy new faces a choice: purchase something beyond your capability, or don't do it at all.
The cycle became a familiar one to product planners and marketing in the industry. There were no strong sales of entry-level, middle displacement motorcycles, therefor there must be no demand. Dealers and enthusiasts complained that the only choices were 20 year old designs like the Suzuki GS500 (start of production 1987) or the Kawasaki GpZ/EX 500 (1987), or the Yamaha XJ600 "Diversion" (1991). Of course these machines with their outdated styling and technology made little sense in a marketplace that offered astonishingly superior hardware for only 20% more in price, so many brave new entrants purchased much larger and heavier models to save their pride. Today in the US a beginner motorcyclist is likely to consider a sport model of at least 600cc and weighing more than 175kgs, or cruisers of 1100cc weighing considerably more.
The sad truth is that they needn't have worried about their pride. Hundreds of world class motorcycle racers and a fair few World Champions began spectacular careers on humble Honda Cubs, Yamaha FS1s and Kawasaki AR50s, practicing riding techniques as they trundled to school, work, home or scrambled across fields on these accessible and forgiving machines. But the motorcycle is an irrational vehicle often sold for irrational reasons. It would take a standard with sex appeal and good performance to turn around the moribund image of the all-rounder.
The New Breed
Since the late 1990's the Standard has been making slow inroads back into OEM planning lists, dealer showroom floors and the motorcycle market's heart. Helped in no small part by the introduction of desirable aspirational models like the original Ducati Monster and 1998 Honda Hornet, the everyday motorcyclist in the Western markets has begun to enjoy an increasing variety of modern standards that performed as well as the more extreme sport models but offered everyday practicality and versatility. Of course, old and obsolete warhorses like Suzuki's venerable GS500, the Kawasaki EX500 / GpZ500, and Honda CB500 soldiered on in the bottom end, but the Suzuki Bandit series, Yamaha Fazer, and Kawasaki ZR7 and ZX12R plus numerous others highlighted the new era of attractive, performance all-rounders and reasonable prices.
Since 1996, these machines and their successors have earned the respect of the hard core sport enthusiasts, incubated and bred thousands of new comers to the sport, and widened the appeal of modern motorcycling to not only the young and adventurous, but to previously reluctant Baby Boomers and Born Agains (riders returning to the sport after many years hiatus). There is no doubt that if a consumer has to choose only one street machine to do everything, irrational brand perceptions and social pressures aside, a modern standard will fulfill that role admirably.
In 2008 the most important debuts were not the niche hyper performance motorcycles but a surprising array of modern standards. Suzuki's much publicized Gladius was easily the most impressive. Heir to the SV dynasty, a family of attractive, high quality V-twin road bikes that stormed the sales charts since 1999, the Gladius presented the consumer with a contemporary equivalent to the UJM (Universal Japanese Motorcycle- a slang term for Japanese all-rounders from the 1970's). Honda unveiled a pair of low displacement standards imported from Brazil and China, and Kawasaki continued to impress journalists and test riders with the all new ZX250R "baby Ninja". Late last year, Honda revealed that it would introduce the pretty CB300 Twister to European and possibly North American markets, billing it as an entry-level Hornet, while premium standards came from BMW with the versatile F800, and Ducati with an all new Monster. All are good looking, with low seat heights, reasonable prices, and performance that could at once be handled by a novice but satisfactorily pushed by an expert.
Borrowing the automotive "crossover" argument that something can truly be mutli-purpose and still desirable has also been successful. The Yamaha T-Max maxiscooter, by delivering sport performance and looks, finally made it acceptable to fashion conscious, but hardened European motorcyclists to ride a "mere" scooter to work each day with ego intact. It has enjoyed a position of sales leader not only in the maxiscooter category, but has been one of the best selling bikes in the Italian market overall for nearly ten years. Similarly, the Kawasaki Versys and BMW GS800 have allowed point-of-entry all day riders something that does not look nor feel like a crude enduro, but have largely the same versatility. This "SUV" approach is beginning to spiral into the realm of hyper-specialization as the premium brands try to out-do each other to create a two wheeled Hummer (Yamaha Super Tenere 2011, KTM LC8R, Ducati Mutlistrada 2010), but the original intent -a multi-purpose, multi-road motorcycle- is still there.
The US and European markets have been dominated by high performance, large displacement motorcycles for decades, with the entry-level into the sport often considered to be nothing more than a niche opportunity. But recent high-volume success of some humble, small capacity motorcycles, and the severe economic downturn has caused many to rethink this paradigm. MMW examines, the market's missing link.
The demographic group with the most influence on North America’s motorcycle industry are the Baby Boomers. When the Boomers were in their 20’s, they caused a surge in motorcycle sales by buying all the high-strung two-strokes and small displacement Japanese bikes then available. Peter Egan, the famed Cycle World columnist, is perhaps the most symbolic of his generation. He regularly writes romantically of his first new motorcycle, a Honda CB350, that he owned as a young man in the 1970’s. Like most Boomer bikers, those humble, cheap and accessible motorcycles were the key that allowed them to develop their passion and skills so that they could later upgrade to ever bigger and more expensive fare.
Today the Boomers are the driving force behind our industry sales, in particular big V twins. Even with the Great Recession, Boomers almost single handedly define the bikes available in US showrooms, and guide the product decision making in corporate boardrooms. They want more power, more features, more exclusivity and generally choose more conservative styles of bike that reflect their tastes and financial position. The average age of a buyer of a new motorcycle is pegged at 46, which is why so many attractive middle weight or niche bikes from the major brands are unavailable in North American showrooms. The wisdom says : there is no market for small, entry level motorcycles except for the most plain and basic. I believe, based on experience in Europe, that there is no market because we offer nothing to attract young riders.
According to the mainstream press, kids interested in motorcycling in urban America only want Hayabusas with stretched swingarms and a NOS kit, so there is no point in bringing in anything small and hot. Entry level at your friendly neighbourhood dealer means boring, old tech bikes like Suzuki’s 650 Savage or some other old nail. That is, until a few years ago when Honda brought us the Thai and Indonesian made CBR125, and Kawasaki brought in the new 250 and 650 Ninjas. Suddenly the littlest Ninja is the 5th best selling bike in America, ahead of any other sport model by a wide margin. In the UK, where biker peer pressure is much higher than here, particularly among sport riders, the little CBR was the best selling motorcycle for two years, period. The press and the purists both gave this 11hp whizzer the approving nod. It got a lot of new British biking.
Just because you can make monthly payments on an R1, but are so afraid to ride it fast that it sits in the garage most of the year, does not make you a motorcyclist. You may laugh at the guy (or girl) on the Ninja 250 or SV who rides in a rain suit late in the year, but they are the real thing. Three years from now they’ll be on your R1, and know how to handle it properly. They’ll also enjoy buying and riding high dollar bikes for decades to come, because they are confident, and have the skills to enjoy a much broader riding experience.
Absolute power might be the only cure for the hard core purist, but for most, just owning and riding a motorcycle is exciting enough. No one is completely fearless when they start out, so that 9 year old KLR with 29 hp is going to be plenty to get your heart racing. Why? Because it feels fast. And feel you can enjoy daily is a lot more attractive than talk about the Hayabusa with the chrome add-ons in your garage. Month after month of Boomer dominated press with yet another 180 hp superbike shootout is not particularly responsible messaging to youngsters, just like reviews of $35,000 cruisers is not getting new people on bikes.
Ducati’s best selling bike ever was the original 600 monster. Rated at between 48-52 hp, it was hardly earth shattering, but it looked and sounded ferocious, was easy to ride, and most importantly, it felt good. So what that the top speed wasn’t so high? Riding a Monster at 50mph was a grin inducing experience. The people it attracted ranged from newbies, to returners, to Boomers. Knowing that it didn’t cost much made it sweeter. Now what if you could buy a 250 with that kind of feel? What if a 400 could make you feel like a superhero without breaking the bank, or your neck?
What the US market needs are cheap, cheerful and just plain hot small bikes. In Europe, the champions of tomorrow get started mastering road craft on 4.5 hp scooters and gearbox street bikes (like the Yamaha TZR50) before graduating to 125cc hotties like the Aprilia RS125, and Yamaha YZF R-125. By the time they are getting their first professional jobs, the typical European has been riding on the street for up to 8 years. Over here, every great American motorcyclist begins on dirt, and every World Champion we ever produced cut his teeth in motocross. If you can handle a 250 lb, 40 hp motorcycle on rough ground then mastering wheel spin, power slides and trail braking on pavement is easy. The key to widening the market is not more power or more exclusivity, its getting our teens after the motocrosser, and new riders on road bikes so that skills, riding maturity and a lifelong love of motorcycling can continue.
Some think this is impossible because small displacement motors can’t handle the long distances of North America and highway speeds.
A modern 250 four stroke (Ninja 250) has the same top speed as a Harley 883, which no one will argue is insufficient for highway use. It also accelerates faster and turns more easily thanks to light weight and better balance. Obviously, the Ninja - 883 comparison is silly, because the person attracted to one won’t like the other, but the point is that new technology, small to medium displacement motorcycles are capable, and can be hugely attractive if offered in a variety of forms. In terms of durability, 150 - 250 cc Japanese motorcycles ply the highways of India and Asia often carrying heavy loads and on roads that make Baja tracks look like the Interstate. On average, these small engines can take over 40,000 miles without being opened up (with regular maintenance.
The main missing ingredient is raw motorcycle appeal. If a bike is good looking, handles well and reasonable in price, it sells. The entry-level fare available here is limited, but getting better. As we reported in The Return of the Standard, Honda’s CB300 Twister could be 2011’s answer to Peter Egan’s CB350, if Honda of America were to bring it here. Honda quality, contemporary design and a $3000 price tag would do more to boost motorcycling in the US than another product placement in a Hollywood movie. The good news is that these small, modern and fun bikes exist, but not here. It is only a matter of time and pressure before those Indian, Spanish, and South East Asian machines end up getting the spotlight they deserve, and into the hands of the deserving American public.
The Skeptic’s List of Hot Entry Level Motorcycles available in 2010
Rieju RS3 125 - Spain
Bajaj Pulsar 300 - India
Honda CB 300 Twister - Brazil
Honda Veradero 125 - Spain
Yamaha YZF R125 - Spain
Yamaha XJR 400 - Japan
Yamaha YZF R 15 - India
Kawasaki ZZR 400 - Japan
Suzuki GSR 400 - Japan
Honda Motor Europe announced that the CBR150 will be presented at EICMA next month, as a possible import for the European market. Already heavily anticipated, the replacement for the best selling CBR125, and larger NSR 250 is also expected to present the Western public a complete line of modern small displacement, 4 stroke sport models, long missing from the European market.
Like the current CBR125, the new models will be manufactured and imported from Thailand, where this class of motorcycle is highly popular. Technical specs for the 150 are modest, but will likely be sufficient for the youth and beginner markets they are intended to targer. The 4 stroke, 4 valve DOHC motor features PGM fuel injection, and makes a claimed 18 HP. Styling is representational of the flagship VFR1200.
Further information on the larger NSR, standing for New Standard Racing, is not available, but it expected to be a much higher performing, semi-expert motorcycle like it's namesake 2 stroke predessesor NSR family.
courtesy of Honda
The Piaggio Group announced in Italy yesterday that it would match the Italian federal governments 10% cash incentive on new motorcycles by matching it with it's own 10% discount, bringing the total price cuts to 20% on all group brands (including Piaggio, Vespa, Moto-Guzzi, Aprilia and Derbi). The move comes to stem the continuing domestic sales decline that has crippled Italian new bike sales since Q2 of 2009.
Piaggio is Europe's largest OEM, with a broad range of manufacturing and distribution channels around the globe, but depends heavily on Italain domestic market sales for revenue. Increasing pressure on the Italian economy, lack of consumer confidence and intensifying competition from Asian brands, particularly in scooter segments, has eaten away at potential sales.
Rieju, a small family owned an operated OEM with over 80 years of history, has launched an electric scooter concept, together with the University of Barcelona. The Mius, which will be presented formally, along with detailed technical specifications and price at next month's EICMA, represents a bold move by the company, better known for its performance based youth motorcycles, such as the RS2 and extreme motocrossers. A press release states that power comes from a German made lithium-ion pack, and in a break from others, a chassis mounted brushless DC motor, also sourced from Germany.
Rieju entered the scooter market for the first time in 2007, with Chinese imported budget products: Toreo 50 and 125. Currently, the company does not have a significant market presence in that sector.
Yamaha Motor Italy (YMI), a subsidiary of Yamaha Motor Europe B.V, annouces the resignation of Director General Enrico Pellegrino after 8 years of service. YMI president Hiromu Murata said in a statement to the Italian press "I would like to thank Enrico for his deidicated work during his years of intense commitment at Yamaha." and went on to attest to his contributions in making YMI one of the star divisions within the Yamaha corporate family. For his part, Mr. Pellegrino did not cite specific reasons for his departure, other than a desire to "...pursue other paths". The statement also did not confirm whether a suitable replacement candidate had been chosen, or whether indeed the post would be replaced at all.
YMI suffered deep cutbacks and staff layoffs in the wake of Yamaha's disasterous losses in FY 09, culminating in the closing down of the assembly line earlier this year. Currently, the subsidiary contains European R&D, design, and racing operations centers for MotoGP, and European production. Products formerly manufactered in Italy are now assembled in Spain.
Polaris Industries, manufacturers of Victory brand cruiser-style motorcycles, released its Q3 report, revealing overall positive returns. The company, better known as a maker of snowmobiles and ATV's, reported 116% increase in revenues for the quarter, year on year over 2009, and overall 81% improvement for the whole year ending september 30. The company also reports that unit sales increased over 50% year on year in this quarter, with particular popular emphasis on the Cross Country and Cross Roads touring models. Outside of North America, Polaris says export sales are up over 100%, although it is understood that these totals are small.
Overall, Polaris Industries is reporting strong growth, with sales up 33% to $580m, and net income increasing 51% to $47.2m. The report cites consolidation, favourable currency rates resulting in lower product cost and increased margins for the strong performance.
courtesy of Polaris Industries press release
Harley-Davidson sent a press release citing optimistic figures yesterday, indicating an net increase in income of 66% year on year, largely due to better performance of the HDFS financial services unit. Sales of motorcycles continues to decline, 7.7% worldwide and more than 9.4% in the vital US market, despite overwhlming dominance in the US premium, heavyweight segment. The company forecasts that total unit production will range from 207,000-212,000 units for 2010, a significant decrease from 2009.
Bajaj Auto, India's largest automotive and motorcycle manufacturer, released pictures and a statement for colourway updates on the popular Pulsar lineup. The Pulsar, by far the best selling sport model in the 180 - 220 cc range, will be available in metallic orange. Bajaj claims the vibrant colour is an attempt to energize youth consumers and attract them to the brand. In recent years, increasing competition from technically sophisticated Japanese models such as the Honda CB, and Yamaha R150 have stolen the youth market from the Indian giant.
The Pulsar (180 to 220) range retails from Rs. 71,430 ($1600).
Moto Honda da Amazônia, a subsidiary of Honda Motor Company, announced that thier factory in Manus was adding another production line to increase the production capacity of the market leading manufacturer. The new two-shift line will build the Biz 125, Pop 100 and Lead 110 models, finishing one motorcycle about every 45 seconds. The new line has a total capacity of 500,000 units, with first year production forecast at 300,000 units in 2011, ramping up to an eventual 415,000 units in 2013.
Honda has operated in Brazil since 1976, and is the absolute market leader in Brazil, accounting for 77% of motorcycle sales. The Manaus factory complex is on target to make 1,430,000 units this year, up from 1,241,543 in 2009. The facility also boasts en increasing environmental sensitity, including closed cycle chemical and waste management, and No Packing Delivery (NPD) shipping systems.
courtesy of Moto Honda da Amazônia
Honda Bazil released photos of new colours and prices for the market leading CB 300 line. The CB300R continues unchanged but for the introduction of a new blue metallic colourway, while the XRE 300 enduro variant gains a metallic red, and new rearview mirror design. Both models will be available with ABS brakes as an option. Prices announced range from R$ 11.490,00 ($6900) for the CB 300R and R$ 12.890,00 ($7700).
courtesy of www.moto.com.br
According to ABRACICLO, Brazil's industry reporting body, sales of new motorcycles increased by 14.83% in october, year on year. Factors that are being cited are a loosening of credit availability to consumers, particularly for "traditional brands", like Honda and Yamaha, says Sergio Reze of the Federação Nacional da Distribuição de Veículos Automotores (Fenabrave). According to Reze, there is an overall increase in confidence, both on the consumer level, and by banks, which has seen an overall increase in spending.
ABRACICLO and Fenabrave project a year on year increase in total motorcycle sales to be in the region of 8.5%, for a total of 1.7m units by december.
In Milan, BMW revealed studio photographs of a new colourway for the top selling R1200 GS model, in all black. The monochrome treatment covers all painted surfaces ina a satin black, and will be available as an option as of January 2011. Technical specifications remain unchanged to the standard GS. The price for this option will be €470 ($650).
Via Motociclismo magazine
The Australian MotoGP race on Phillip Island provided two bits of great news for Ducati. Casey Stoner won the event after dominating practice and qualifying, helping round out the end of what has been a difficult season for the Ducati star. The young Australian's positive performance soothes a relationship that had soured earlier this year, when after poor performance, Stoner signed with Honda for 2011
More importantly for the team, Yamaha has officially released their star, Valentino Rossi to test for Ducati as early as the after the next race in Valencia, Spain. Rossi, a 9 time world champion, signed on to race for Ducati next year, but speculation that Yamaha would not release the rider to test with his next team created tensions among the three stakeholders. Yamaha, wanting to maximise the publicity impact and money invested into retaining Rossi's services, signaled that it would not allow the year end test for rival Ducati, a courtesy typically permitted.
Ducati, and Marlboro -the title sponsor- are eager to promote Rossi as soon as possible after paying a reported €15M for the Italian champions services.
Marketing in the motorcycle industry has rarely been particularly creative. Whereas we all expect high production value commercial campaigns in the automotive sector, the bike business has been largely left to the quiet arenas of magazine print ads and lobbying the specialty press. Once and while, motorcycle marketing is seen on television, but even there, perhaps especially there, the advertising tends to be conservative, with a male voiceover bestowing the bike's virtues during the inevitable beauty shots of a motorcycle on either a twisty road or impossibly cool urban landscape. The net takeaway for the viewer is almost always weak, with the advertising manufacturer concluding that television is not a cost effective means of reaching the motorcycle consumer.
The economic crisis has crushed most OEMs enough that advertising budgets are a pale shadow of what they were before. Simultaneous to this, many traditional, even some highly venerated cycle magazines have shrunk, or disappeared altogether. In this climate, and with very few genuinely new motorcycles to offer the public, marketing departments have had to radically alter the way they communicate to the customer base. Fortunately, lack of money, loss of print exposure and pressure to re-energize stagnant product portfolios has forced inventive and, for our industry anyway, innovative advertising ideas.
Enter the teaser. As recently as 2009, all new motorcycle launches were of the big bang variety. A manufacturer with global pretences would invite the specialty press to a launch event, typically at some beautiful venue, with either historic symbolism or at least some flattering roads, and wine and dine the media while carefully unveiling press kits, studio photography, specs and of course, allowing test rides. The journalists would all go home and almost simultaneously the whole world got magazines full of news. One week the world knew nothing, the next your motorcycle was on every news stand.
With budgets cut, the old idea of teasing consumers has emerged as the new must-have marketing campaign tool. Yamaha has been perhaps the most prolific with physical teaser concept bikes on show stands, going back to the 1986 Morpho 1 and continuing pretty much up to 2009's Tenere concept at Tokyo's Motor Show. These physical teasers foreshadowed new products, or at least new product ideas and certainly generated news, but more for the brand as a whole than for any given machine. Without definitive details most consumers lack the imagination to foresee their potential for real world products. Also, they are expensive to produce and demand a lot of patience of consumers, who have to wait anywhere from one to five years to see something tangible they can actually buy.
Providing instant gratification to a consumer world rotating around the internet is the marketeers new mantra. Movie industry-style trailer videos, with actual products in real world conditions can be generated quickly, and distributed for free via social networking sites like Facebook and Twitter, which quickly get republished by an army of bloggers around the globe. Static images, accompanying quotes, or specifications fired off in short bursts add fuel to the flames, inciting curiosity and interest. 2010 has seen the teaser campaign dominate the premium motorcycle market, with literally every major OEM sending out a steady trickle of information over the many months leading to show season. Consumers and enthusiasts now expect to see some sort of news about upcoming products on a weekly basis, and track them on dedicated forums.
Another new guerilla marketing tactic that is booming is the so-called "leak". In this case, a magazine or blog breaks out a scoop, usually featuring a photo of a new motorcycle caught in a secret test. Genuine leaks are not new, but in past years manufacturers went to considerably lengths to protect confidentiality until the big bang press launch. This year, it is clear from the sheer number of leaks, that they have become another low cost form of excitedly building interest and hype, and are being orchestrated by the manufacturers themselves. There simply is no logical way to explain how all of a sudden, OEMs with decades of experience keeping projects secret, have collectively all sprung leaks.
In any event, teaser films, images and specs, whether released intentionally or leaked have replaced the traditional big bang product launch. So far, they appear to offer the best combination of exposure for a reasonable investment, and have had the spinoff benefit of introducing hype, via repeat blogging, to a wide audience of non-enthusiast consumers, something traditional specialty press could never do. Also, since most of the information is being repeated by ordinary individuals, any commentary made is given extra credibility, since it is not originating from the usual manufacturer propaganda machine. Effectiveness in the long run will require at least another year to measure accurately, but early indications are that while high profile, not all campaigns are definitively positive.
Triumphs recent long winded teaser trail for the Tiger 800 dragged on so long that it risked alienating enthusiasts and curious consumers by teasing them into irritation and apathy. On one Triumph fan blog, many posters openly mocked the lack of substantial new information in each new teaser, while others had terse words for what they perceived to be "a never ending joke". Another major campaign, the BMW K1600GT, was more straight forward, with only a few teasers released at sensible periods, but each providing genuinely revealing information and imagery. While actual statistical information on each campaign's audience awareness and market penetration are not available, informal polling taken by MMW to a pool of 22 industry professionals reveals that more than 75% viewed the BMW campaign favourably, compared to under 30% for the Triumph.
One large potential risk brands face with guerilla marketing tools is losing control of the message. As each teaser is launched into the internet, it takes on life of its own, forming in whatever direction public opinion chooses. Of course, this is possible in every public product launch, but without the tightly controlled first impressions of the traditional big bang, it is easy for vital information to get overlooked, misunderstood, or worse, presented erroneously. An example of this was seen with the Ducati Diavel campaign, and its controversial 240 section rear tire. Original leaked images revealed an extremely wide chopper-style rear tire, which immediately split the public blogsphere down the middle, either for or against this radical design. Each side debated loudly whether it would improve or hinder performance, citing largely uninformed heresy and speculation to support their arguments. Ducati intervened eventually with a short quote to assuage fears of the naysayers, but the court of public opinion and its negative insinuations had stained the campaign somewhat.
Marketing motorcycles in a social-network-centric world is going to take time to perfect. The car industry has had several successful such introductions, such as the one for the new Ford Fiesta, and it opens powerful possibilities in a cash poor environment. It will also take considerable study of the impact this style of marketing will have on the traditional base customers, who have come to cherish the conservatively established norms in motorcycle media. Making these two, disparate universes work together will be a terrific challenge.
On display at INTERMOT, Apache Quads, a UK distributor of low-cost minibikes and miniquads, revealed a deal to distribute products for the historic Italjet brand name. Italjet is an iconic Italian OEM that has produced high performance street bikes, avant-garde scooters and racing type motorcycles since the late 1950s. Like many small boutique European OEMs it has struggled to remain viable over the past decades. Motorcycle production ended in 2006, and the current product portfolio comprises of Asian-sourced minibikes, quads and pit bikes.
As MMW goes online, the Intermot motorcycle show winds up and already the media are reporting leaks for upcoming EICMA. It is show season, and that means its time for excited speculation amongst designers and engineers about what new and fantastic hardware will their rivals unleash on the world.
New technology and emerging trends in styling are normally hotly anticipated at this time of year, but with two years of disappointing shows, lack of genuinely new models and the ongoing financial troubles, it seems like motorcycle design is in a deep rut, with almost nothing even remotely engaging being revealed for 2011.
Legacy brands like BMW, Triumph and KTM all have completely new bikes in the top end of the market, but styling is derivative and anodyne. The new speed Speed Triple, BMW K1600GT, and Duke 125 appear like mild makeovers of other models, despite being completely new. The much hyped Tiger 800 adventure model is less flatteringly a copy of BMW’s winning F800GS. Of course adventure-touring bikes are a hot segment that every OEM is trying to get into, but a company with as much original design material as Triumph really should have done something more. Besides, where is the wisdom is imitating the brand that defined the genre?
Even the Italians, so often described as the purveyors of style above all else, have released little in the way of innovative styling. Ducati’s Multistrada, while technically brilliant, is not pretty. Launched in a series of teases over a long period, the controversial styling had sunken in somewhat prior to its public testing. No one questions that it is an original design, and one that attracts as much attention as the stunning technology and specification. Equally, only praise has been heaped on its fantastic performance and initial sales seem to confirm that it will be a success for the brand. But serious criticisms have been leveled at the ungracious twin-nostril nose, bulbous, plasticky flanks and fuel tank whose shape digs into one’s stomach. In any case, it too represents derivative body styling, borrowing cues from both the outgoing Multistrada and most other adventure bikes. Viewed from the rear, or painted a colour other than red, no one could distinguish the seat/tail from a Kawasaki Versys, or a BMW F800.
The Japanese OEMs have done even less. To call Suzuki’s new GSX-R new is like calling MV Agusta’s aged Brutale new because of invisible specification changes, something that manufacturer has done for a decade. Suzuki is not alone in the drought of new design influence, but it is perhaps the most surprising. Until 2008, they more than the other big four pushed ahead with a glut of fantastic concept models, from the inline 6 cylinder Katana, to the fuel cell powered Crosscage. Of course the street production machinery was diluted, but a consistent, and competent design language based on the unmistakeable GSX-R style was everywhere. This year’s product catalogue is stylistically weak. Even the naked GSR750 looks like it could have been a 2007 model, with nothing new in proportion, technology or detail design.
Similarly, Kawasaki’s ZX-10, while perhaps mildly shocking in proportion and performance, leave no lasting visual impression over its competitors. As noted by other publications and in forums, the repetition among 1000cc superbikes has become a joke among enthusiasts, with colour and minor mechanical design details often the main distinguishing feature.
Will EICMA reveal some exciting design? It is doubtful that the Japanese will bring much to the table, not because they aren’t capable of creating spectacular designs, but because as in past years, they chose to show their cards at Intermot. Honda has stated that it will have an adventure concept, and Yamaha may reveal some scooters, like a new Majesty, but this is hardly earth-shattering. Italian industry, the loud promoters of high style and design in the motorcycle industry must come to the rescue if any new and inspirational trend is to emerge for 2011. Of course, most will expect this to come in the form of Ducati’s new power cruiser (tentatively named Diavel), or MV’s purportedly upcoming F3 700cc middleweight, but must these flamboyant and expensive be the source of good design?
MMW Clinic believes that Italian design may indeed come to the rescue, but not with the traditional Legacy brand names. Studios like Engines Engineering in Bologna, and Marabese Design near Milan have been working with big Legacy names for decades, but in recent years have spread their talents and services to Asian brands, whose increasingly sophisticated motorcycles have begun flooding western markets. Indian brands like Mahindra and TVS, and Chinese makes Loncin, Keeway and others have enlisted Italian designers and set up studios in Italy since the early 2000’s. This, in combination with their financial strength and increasing global sales suggests that if there is to be surprising good industrial design, it will likely come from them.
Of course, small displacement, entry-level motorcycles do not enjoy lavish attention by traditional western media, nor do they benefit from outrageous performance, exotic materials or historic names like Legacy brands do. But trends don’t always start from the top, where values tend to be conservative. The original Vespa was hardly inspirational as a pure machine, nor was it a premium product when launched. It did, however, define scooter style and inspire a legion of imitators ever since. As EICMA approaches, MMW Clinic will train its eyes east, and downmarket. If fresh design trends come this year, it is our prediction that it will come from the lower register of the price and brand equity spectrum.
A press release and accompanying Facebook page widely circulated in North America introduces Druid Motors, an American motorcycle startup. Druid Motorcycles claim to be ready to launch a line of hybrid cruisers on their prorietary "Prophet Platform", beginning with the Sorceror model. Little information is available about the products or the company, other than the use of nano-technology, a shaft final drive, use of carbon and kevlar composites, and variable chassis geometry. The short Press Release, promises to reveal more details in the coming weeks.
Druid Motors website features only a home page with a prominent investor log in button, which suggests that like many others, this is a startup with lots of ideas but lacking capitalization. MMW contacted Druid for comment, but is yet to receive a reply. With a premium cruiser market in severe decline, and scarcity of venture funding due to the ongoing economic climate, it will be a difficult a steep climb ahead.
Motorcycle Market Watch is proud to begin online operations, with news, market data and analysis of the international motorcycle industry.
The mission of MMW, is to provide global insight, news, and up to date analysis of the international motorcycle industry. Until now, trade news has been limited to national magazines, and government agencies, often with limited perspectives and in dozens of languages. It has never been possible for industry professionals to easily locate and update data, for all key markets, without resorting to either translating obscure regional publications or purchasing very expensive reports from private think tanks.
MMW is the first, all English international news and data outlet, with a global view, including all major markets. It is our goal to provide professionals with the information needed to compete in the integrated global marketplace of the 21st century. MMW is divided into three main categories: news, special reports, and editorial.
MMW news will feature all the latest Press Release information concerning new products and services, but more importantly, it will provide up to the minute market data, national sales figures, industrial and business development news. Finally, trades people will have access, at a single glance, to information not only about the products, but the OEMs and Tier 1 suppliers that are making news today.
MMW Special Reports are articles that present in-depth professional analysis of trends and markets that are evolving the industry and the way we do business. Each report will feature a hypothesis based on recent news or facts, and examine the causes and effects that have shaped these developments. Typically, these will include fact sheets, comparison charts, diagrams and other media tools to help communicate the data in an easy to understand format. Occasionally industry professionals from major OEMs will be asked to contribute opinions or analysis to underline alternative views on the same theme. Special reports will be made available in PowerPoint™ and PDF formats on request for industrial professional use.
MMW editorials are written by industry professionals with a sharp eye for context. Three editorial streams : Billboard, an examination of markets and marketing; Clinic, an examination of design and technology; and finally, Hell For Leather, our featured editorial. HFL is one of the most influential motorcycle news blogs in the world, with a large and far reaching readership. HFL will deliver sharp opinions of style, culture and design in the motorcycle universe. We are very proud to provide the best, international data, news and context about the motorcycle industry in the world.
We hope that MMW will be a valuable informational tool for all manner of industry professionals across the world.
Hell For Leather is the featured editorial of MMW. Founded by Wes Siler and Grant Ray only a few years ago, it has quickly grown to be one of the premiere sources for editorialized motorcycle news in the world. As an online magazine in the motorcycle industry, it has no equal, delivering a daily dose of crisp writing, exceptional visuals and a stand alone attitude to reporting that is altogether rare in journalism. MMW will feature a new, original Hell For Leather op-ed every month. In thier own words, here is the Hell For Leather mission.
You’ve probably figured out by now that HFL isn’t an S&M fetish site, but that’s usually people’s first reaction when we tell them our publication is called Hell For Leather. No one seems to know exactly where the term came from. Some claim Rudyard Kipling coined it, some think it was cowboy speak for an unruly steer. To us it represents an approach to life, one where we push ahead through society’s mundane conventions and look ahead to where we want to be, not where we were. It means going fast; it means breaking rules; it means doing things people tell us we can’t. It means riding motorcycles.
Hell For Leather was founded for a singular purpose: to give you the motorcycle magazine you deserve. You deserve something more than formulaic bike reviews. You deserve something more than conventional wisdom. You deserve something more than marketing speak rehashed as editorial content. Hell For Leather is committed to bringing you exciting, original, creative stories about motorcycles.
Why do we call ourselves a magazine? That word describes any periodical that publishes a variety of content about a specific topic. Sure, it’s more commonly used for print, but we publish feature stories, news, adventures, interviews and even original videos and we do it daily with a lead time of minutes instead of months. Instead of simply consuming, you get to be a part of it too; conversations are content.
So that’s who we are. A publication with a funny name that’s made by people who like bikes for people who like bikes.
Wes Siler & Grant Ray