If you want to know what’s going to happen in the economy, business and investment markets, look at population trends or demographics. If we can’t see the very long term coming, at least we can observe how people are changing their way to spend money. The biggest years for births in the baby-boom generation were 1957 to 1961. Spending on motorcycles seems to peak at age 45. Harley-Davidson started to flatten out in 2006 and declined last year. Now we are all concerned about the future. The United States looks a lot like Japan and Japan has been declining for the past 14 years. That means deflation. And if you look at Japan’s economy you see a decline in prices, in value of assets and erosion of the buying power of wages. As baby boomers move into retirement, service industries will grow. Productivity gains are more difficult to produce in those kinds of businesses than in production and technology. So what should we do? Pay down debt and save. Easier said than done. You don’t want to make long-term payments on assets whose values are declining with time. Cash becomes king in a deflationary period. The paradox: the longer we wait, more we will be able to buy. So, what about our motorcycle industry? Hard core bikers will continue to ride. Bikers who are also art lovers will still want a "state-of-the-art" custom motorcycle. And between these 2 groups? No room for motorcycle fads and "fashionistas" on 2 wheels. Discretionary money just evaporated. It’s really the way I see it for a long, long time. Now it’s your turn to tell me your perspective (This lady was seen participating to the Love Ride. Picture by Sheriff)
9 Responses to “Can You See Motorcycle’s Future?”
- 1 Trackback on Feb 9th, 2008 at 3:06 pm
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Deficit spending, government greed, nannyism, lack of support for a war effort and protection from “terrorism have all taken the toll.
It is unpleasant to stop spending for governments, corporations and individuals. (no matter whose money it is)
Supporting a government that treats the constitution as a “piece of paper” is very expensive.
Supporting a government that wants to collapse the middle class and change the lifestyle to the “haves” and “have nots” has taken its toll.
Supporting the government that attacks its citizens overtly and covertly in the name of patriotism is reducing expendable income to nil.
Supporting “charities” that use a large portion of received monies for operating expenses rather than for the cause has taken its toll.
Seems to me that many American motorcycle manufacturers have ignored the “government market” for combat and support vehicles. These vehicles were surplus after the conflicts and were reasonably priced and often chopped, bobbed and customized. I haven’t seen any of them even hit the drawing boards for possibilities. I haven’t seen any efforts toward making dual sport motorcycles a custom bike.
The longer that the mindset of the American motorcyclist is kept or contained in the realm of products that are not utilitarian as a base product, the smaller the market will be. A motorcycle should be standard issue to each and every soldier and ground support troop. A base vehicle that can be modified and adapted to the demands of all situations.
When you finish laughing, consider the amount of motorcycles that will be consumed and the amount of riders that will be trained. There is your new customer base and your new way of creating a customized motorcycle market. Take a second look at Roger Bourget’s Quad for the street and those made by others. Adapt those thoughts to what the military can consume and what is possible as a useful military vehicle. When you have come up with those solutions, you will see the market that will emerge for customization rather quickly.
Customizing has always been consumer driven and artisan provided. Shake out the pretenders in the market and bring forth the true craftsmen.
Last summer there was a Legends Lowlife frame kit on ebay for $7500-8000 if I remember correctly and it went in a flash. At this moment there are 2 such kits on ebay at $6400 and $7000 with no takers even though they have been on for 20 days already. Sign of the times in the US. But as i live in England and the $ is weak compared to the £ they are a bargain.
Thanks Cyril!
Everyone is talking about this issue. Your possition is engageing. The days of $30,000.00 and $40,000.00 production choppers and V-Twins are slim. I met with one of my dealers yesterday. He is a real small passionate custom bike builder. On his rack was a bobber just past the design stage. He was using recovered parts which he re-built to perfect working order. This bobber will be a hit at the Columbus, Ohio Easy Rider show. He is asking $15,000.00. He will get it. This is what I remember in the 70’s. The neighborhood guy in the garage or basement coming up with cool stuff for his bike everybody wanted and couldn’t get. You had to beg the guy in the garage to make you one. The neighborhood Biker of the 70’s will never go away.
I am a part of the generation you talked about. We were in our 20’s during the Reaganomics “Yuppie” days of the 80’s. In our 30’s during the .com boom of the 90’s and now, stretching our arms towards our 50’s. Kids are gone, we’re having breakfast by ourselves and scheduling our next time to get away to a beach somewhere. The bike is in the garage with a future “For Sale” sign to pay for the vacations.
When I use “We”, this does not include me. I RIDE MY HARLEY. It’s a dresser. Ahhhhhh. Comfort. Would I buy a “Bar Buzzer”? Yes I would. A little old school bobber with lots of cool moving parts from a guy with cool stuff in his garage.
Love to ride,
Andy
Yap,
As you say, “…years for births in the baby-boom generation were 1957 to 1961…” and that demographic was the customer base for “production v-twin customs” that supported “the industry.”
However, to those who follow trends, that one is old news. And the economy and age of the participants has helped the down turn.
From a market perspective, if the Liberals enact an energy consumption tax, then smaller displacement scooters powered by twins and singles may well get a boost. It happened during the 70s. But an after market parts industry for smaller scooters will probably never rise to the levels needed to support “the industry” currently struggling to survive.
Andy nailed it.
“…the 70’s. The neighborhood guy in the garage or basement coming up with cool stuff for his bike everybody wanted and couldn’t get. You had to beg the guy in the garage to make you one. The neighborhood Biker of the 70’s will never go away….”
Barn & garage builders will support an aftermarket industry, but not anywhere near the level we’ve just seen.
Look at the Hot Rod industry. It’s had it;s ups and downs. All the different types of cars have risen and fallen in value. But the one thing that is common, is that they have all re trenched back to a base constituency. On a recent trip to Vern Tardel’s shop (expanded barn behind his mother’s house, his son busy at work) i saw about 6 steel Highboy roadsters in various levels of completion, mostly traditional classic Flathead powered jewels. All with a customer waiting for them. And he’s got orders waiting in the wings.
The car guys figured it out. The high end builders (Boyd and Chip… etc.) have a steady market of “car art” buyers. But the heart of their market is the home builder. And those guys are getting more and more magazine space.
There will always be a buyer for a $90k scooter,,,,, just not very many of them.
The custom scooter industry needs to get back to it’s roots…. the guy in the garage.
With them it isn’t, and never was a fad.
The guy with a checkbook trying to be “somebody” is on to other things.
But that’s just my opinion…(?)
-nicker-
Nailed it on the head. Unfortunately, it will get a lot worse before it gets better, because deflation is much trickier to fix than inflation. Real estate prices will return to late 90’s prices- or even lower, as corrections tend to overshoot- and commodities prices will fall as demand wanes.
Credit markets are in much worse shape than people believe. Harley is a great example of how investment bankers tricked up relatively mundane financial entities with CDO voodoo, creating black holes of finance. In the late 80’s, I was involved in creating some earlier versions of these bastards, and frankly, we barely understood them back then, in their much more simple form- lol.
Whlie we’ve seen a few failures in the motorcycle industry, the historic reality is that we’re not at the bottom until we’ve see a 50% washout in an industry- perhaps even higher in a leisure industry such as motorcycling.; Right or wrong, cheap and easy credit leads leisure industries.
Check out “Soft Currency Economics” ( http://www.epicoalition.org/ ) by Warren Mosler- yes, the same Mosler that builds the supercars- turns out, he can build those cars because he has been one of the better economists/ money managers over the past 20 yrs. His paper lays out what the federal debt really is, how it works, and how monetary policy really works (or doesn’t)- good stuff.
wow,
The kind of economic pessimism that tells me it’s a great time invest in America.
Well, ya,
When prices are down, thats a good time to buy.
But buy into “value” no junk.
-nicker-
This is a great time for a biker. It’s clearing out the yuppy money that has made parts so flippin’ expensive. Maybe you can get some sheet metal now without taking about a second.