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Can Millennials Save the Motorcycle Industry?

FCBH

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Article from Bloomberg suggests major trend changes, including a diminished number of motorcycle riders, is happening to the industry.

"The new breed of small bikes, meanwhile, has quickly become the most promising part of the business. Between 2011 and 2016, sales of motorcycles with engines smaller than 600cc increased by 11.8 percent, while bigger, more powerful bikes managed only a 7.4 percent gain."

RB
 
Article from Bloomberg suggests major trend changes, including a diminished number of motorcycle riders, is happening to the industry.

"The new breed of small bikes, meanwhile, has quickly become the most promising part of the business. Between 2011 and 2016, sales of motorcycles with engines smaller than 600cc increased by 11.8 percent, while bigger, more powerful bikes managed only a 7.4 percent gain."

RB

I would not be too worried unless the big bikes were seeing a negative growth rate. After all, it seems silly to expect that year after year the number of bikes sold should constantly increase. It makes more sense that they might grow initially and then perhaps fluctuate around some kind of average point.
 
After all, it seems silly to expect that year after year the number of bikes sold should constantly increase

I think the adventure market might be a stronger segment though...including the smaller bike cohort.

RB

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I think the future millennial rider is looking for an electric scooter. For them, practicality and perceived ecological impact will rule the day.
 
I think electric is the future and that it will not be electric scooters but regular bikes that take over the market. Think of the advantages of an engine that almost never wear out. No valves to deal with. The service bays will be empty.

Wait until the electrics start winning the races and the crowd will follow.
 
I think electric is the future and that it will not be electric scooters but regular bikes that take over the market. Think of the advantages of an engine that almost never wear out. No valves to deal with. The service bays will be empty.

Wait until the electrics start winning the races and the crowd will follow.
I think the bays will still be full but it will be wiring harnesses, communications and software issues to deal with.

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As a general business rule of thumb, an industry should be growing at or faster than the general pace of the economy and a business should be growing faster than the industry or they are not gaining market share. Flat sales are declining sales with cost controls and weak investment on the horizon. Millennials were not as quick to drive as us Boomers were. They have different ideas about transportation and entertainment from us. Whether it is electric power or hipster tinkering, the industry will have to match their product to the customer, not the other way around. It is quite possible that the golden age when everyone wanted a personal car/motorcycle may be over.
 
My wheels were my freedom. It was soooo important to me. Less so w my kids.
 
It is quite possible that the golden age when everyone wanted a personal car/motorcycle may be over.

You made some good points, but I doubt this last part. I hang around with millennials as often as I do my own Gen-Xers or boomers (sometimes more often) and I can tell you that they value individual autonomy greatly, even though many of them mistakenly think government should be the one to facilitate it for them. That said, they don't want to be told what to do or how and when to do it. And if anything, they may prize personal transportation and money more than X-ers and boomers, though their reasons are totally different.

The big cultural shift with millennials regarding these things lies in their version of utility. Believe it or not, these kids really do know how to save money and build a nest egg. In stark contrast to previous generations, they'll happily live at home until they're 25 or even 30, just to work and build up plenty of F.U. money so they can be in control of their lives. And that's the big picture for them in my experience; they want money not to buy fancy things or to keep up with the Joneses, but to live freer (yet more minimal) lives. I believe that's why they aren't buying expensive motorcycles and making huge ancillary purchases; at least not right now.
 
I'd think that most millennials have to pay off crushing college debt before they can move on to investing in the toy box department?
 
I'd think that most millennials have to pay off crushing college debt before they can move on to investing in the toy box department?

Well, I wouldn't say most. While the percentage is higher than with previous generations, only about 30-ish percent of millennials get some kind of degree. That leaves 70-ish percent without the "massive" college debt the media loves to play up.
 
... I can tell you that they value individual autonomy greatly,...

Oh, I think we're on the same page with our observations about their habits and goals. The ones I know either from business, on campus or family all seem to think that selling their future labor is a serious threat to their personal liberty and are very cautious to do so, especially if they don't identify with the product as a part of their lifestyle. That's why I think the future is not good for motorcycling.

Where we may diverge is on the impact of disruptive technology. Zipcar, peer-to-peer auto rental, Uber, and the like may cause some major changes in the transportation industry. If my family and friends are any indication, most of the kids did their best to arrange a car free life for aas long as they could, preferring instead to use public transportation and Uber. Of course some millennials may embrace motorcycles as fair weather transportation since they are relatively cheap to buy and easy to park. It'll be interesting to watch.

m
 
The millennials I run across tend to crunch numbers well and the cost of more frequent maintenance of motorcycles compared to a good used car, or even an occasional rental, rules motorcycles out. Especially so if one does not wish grease under his or her nails. Full coverage insurance also favors cheap cars.
 
Well, I wouldn't say most. While the percentage is higher than with previous generations, only about 30-ish percent of millennials get some kind of degree. That leaves 70-ish percent without the "massive" college debt the media loves to play up.

Don't underestimate the size of the student loan problems. IIRC, it's about $2T in default. And growing rapidly. When I was deep in debt it was hard to sleep at night and I'll bet it haunts them too. Hard to look at the pretty cars and bikes when you can't sleep at night.
 
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I'm a millennial, and there's just no possible way that I could buy a new expensive bike. I only know a handful of people around my age that can afford a new motorcycle, car, house/rent, etc.

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The industry will change, morph, and appeal to different people for different reasons than in the past. That is simply the way of the world. One of the changes is that bikes and cars are much less about the love/hate relationship of drive/fix/drive than vehicles of my era were. That's partly because all vehicles are magnitudes of order more reliable than vehicles of eld, but also because they're just darned hard to take apart and work on, now. Even if you can figure out how get inside your engine, you're probably breaking about a hundred federal laws. That's good in general, but it also tends to make them come across more as appliances - big, rolling toasters - than as semi-faithful companions.

Lots of businesses are in flux. The taxi industry is running scared of Uber and similar business. Shopping malls are declining rapidly because it's just too easy to click a button on Amazon. CDs are going the way of the dodo bird; it'll be interesting to see if they totally collapse and disappear as fast as phonograph records did.

I began to realize, about 20 years ago, that restaurant chains have a life cycle. They pop up, peak, decline, and disappear. That cycle now moves much faster. The same is happening in other industries. This means a couple of things: (1) more and more, people are going to change careers several times during their working lives, and (2) successful "business owners" will be those who are opening a new business to ride the next trend, while being willing to fold the old business before it becomes a boat anchor. Successful employees will be people who are prepared to retool themselves every few years. Changes to the motorcycle industry simply reflect the reality of the world today.
 
They like hiking and biking from what I see. Nothing wrong with that. The electrics are going to appeal to them if the price is right. Have you guys noticed the electric engine assist bicycles? Keep an eye on that as it might be the transition device.
 
Yeah, I've seen them, Mike. Not for me because a bicycle is purely an exercise device in my world. But if I were a commuter, that would be a totally different story. And as opposed to a moped, no license requirement, no insurance, and pretty much bicycle-style maintenance as long as the motor itself behaves.
 
Relatively few Europeans can afford fuel for cars, so many have scooters and small motorcycles instead. Been that way for a couple or three generations. That is where millennials are heading.
 
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