Motorcycle Related Discretionary Spending Is Back

All numbers, including a higher measure of consumer confidence, a lower percentage of credit card debt, a lower unemployment number and Wall Street positive results, have already translated in a big rebound in discretionary spending. Even if you consider motorcycles as ultra discretionary spending, major manufacturers are already benefiting. Just look at their financial reports for 4th quarter and full year of 2011. All positive for the first time since 2007, with revenues progressing faster than anticipated.

After too many published bad news about the health of our motorcycle industry, I want to point out evidence that most companies still in business are much better companies than they were a few years ago. Let’s take Harley-Davidson as example. Retail sales have accelerated all along 2011 and Harley has significantly increased its market share in the US (55% of US market for over 650 cc) and abroad, and on the segments of young adults (18-34 yo), women, Hispanics and African-Americans. The Harley brand is succeeding in keeping its aging core riding clientele with a choice of comfortable touring motorcycles and at the same time attracting generation Y with more affordable edgy looking models. The strategy started with the introduction in 2007 of the Dark Series, then Nighsters, Forty-Eight, etc is now paying off. Last week introduction of the Sportster Seventy-Two (starting at $10,499) and of the Softail Slim (starting at $15,890) has already attracted big crowds of bikers to Harley Dealer showrooms. All feed back I get from these dealers is extremely positive with most potential clients agreeing that Harley has correctly observed and adapted to mass production the style of bikes custom built in garages and shops all around the world, that bikers want to ride and be seen with…

The Milwaukee factory just created a new excitement around the brand with the launch of 2 models (instead of 1 last year) during what is considered the low season for motorcycle sales. Harley-Davidson is now offering a model to almost everyone in terms of price and style. During Daytona Bike Week I am pretty sure that I will observe this renewed interest at the Harley spots on Beach Street and at the demo rides located on International Speedway. I am convinced that the sales momentum demonstrated by Harley is going to continue in 2012. Same for Victory Motorcycles. Same for all major brands… And of course all those making a living in the after-market motorcycle industry are going to benefit directly and proportionally. Discretionary spending is more “reasonable” as it should be, but is back. I am convinced that 2012 is the year of re-birth for the American V-Twin motorcycle industry and that it will be remembered as such. And if you are an investor in the American motorcycle industry, it’s hard to suggest Harley-Davidson, like Polaris have been poor stewards of investor wealth. Just check again how much money these 2 companies brought to your portfolio from January 1st, 2011 to today February 8, 2012 (courtesy pictures @harley-davidson)

Zipper's

14 Responses to “Motorcycle Related Discretionary Spending Is Back”


  1. 1 rob Feb 7th, 2012 at 12:06 pm

    My small tax refund is goin’ into my bike……………………..

  2. 2 Sammy Feb 7th, 2012 at 12:12 pm

    Great article Cyril. Great analysis. Most bikers don’t understand much about the economy. You do. Recent Harley bashers are going to be very sorry…for not owning the stock.

  3. 3 CafeSportyTC Feb 7th, 2012 at 12:14 pm

    Rob , Atleast what ever you get is going into your bike…. Ive got lots of yard work and things for the Kids to do with mine….

  4. 4 Richard Semprey Feb 7th, 2012 at 12:19 pm

    Bravo Cyril for saying it loud via your website. The cleansing is almost completed. Better days have already started. But nobody should expect the boom days of 2000/2007. Slow growth is better because less risky.

  5. 5 Semper Feb 7th, 2012 at 7:36 pm

    It is well known that the public at large always realize that a recession is over 1 or 2 years after it’s over. The MC business is showing life. A friend of mine who has a shop in MN tells me that he did more business since january 1st 2012 than what he did in 6 months in 2011!

  6. 6 Matt Feb 7th, 2012 at 7:52 pm

    Indiscriminate spending on impractical purchases. America is BACK baby! =D

  7. 7 Jason Hallman Feb 7th, 2012 at 9:07 pm

    Hmmm…wonder if I can take a copy of this to my banker?-LOL

  8. 8 BlueStrada Feb 8th, 2012 at 7:15 am

    Well not only can all the OEM’s smile with that report… but the little guys making accessories will be realy glad to hear it… We’re looking for a great year with Wheel Jockey.

  9. 9 fuji Feb 8th, 2012 at 8:57 am

    Semper

    How soon we forget. and forgive for toys we think we need. The trials of life. At times we stumble in our life so one can walk better and hope we dont fall again. Some of us – LOL .

    Lets hope that HD doesnt pull the plug on the dealership that your friend owns. Loyalty right ?

  10. 10 MostChillin Feb 8th, 2012 at 9:33 am

    “All feed back I get from these dealers is extremely positive with most potential clients agreeing that Harley has correctly observed and adapted to mass production the style of bikes custom built in garages and shops all around the world, that bikers want to ride and be seen with…”

    From my perspective, nothing could be farther from the truth. But that’s only my opinion. If people are buying these new models, then who am I to say that HD and the dealers don’t know what they’re talking about…

    To me, it’s the same ol’, same ol’ at the Motor Company. And as usual, a year or more later to adapt to new trends in the market. I’m a young guy in Motor Company demographics — 39. I’ve owned a number of HDs but do not currently nor do I plan on owning another any time soon. While I’m not on the Victory-train, I give credit where credit is due and I think they are at least trying different things. HD needs to adopt a similar approach. Just my limited perspective of things based on the one comment above…

  11. 11 Sue Feb 8th, 2012 at 10:07 am

    @Matt – LOL!

  12. 12 Flying Piston Feb 9th, 2012 at 7:40 pm

    Bout time. With the exit of AIH, BBC, BDM, WCC along with countless other smaller players and the contraction of HD and S&S it seems there is finally enough demand in the market to keep most of the suppliers still left. All indications seem positive here as well.

  13. 13 motorcycle medic Feb 13th, 2012 at 9:07 am

    Cyril…really is an INDUSTRY Icon…Very savy wording always!
    Cyril …I personally thank you for ALL you do…FOR all of us!

  14. 14 Drake Feb 13th, 2012 at 9:33 am

    Cyril Huze knows better than his readers. Intelligent.

Comments are currently closed.
Crusher
S&S
S&S
Barnett
S&S

Subscribe

Socialize

Facebook Google+ Twitter