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Old 23-Aug-2009, 10:13 PM
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Global motorcycle sales slump hits Ducati

> http://www.guardian.co.uk/business/2...-credit-crunch

Motorcycle sales are being hard hit as credit crunch Britons cut back their spending on bikes. High youth unemployment is keeping many first-time riders out of the market, while the gleaming superbikes that appeal to fortysomething executives are stuck in the showrooms as potential buyers bank their redundancy cheques, rather than blow their bonuses on dream rides.

According to the Motor Cycle Industry Association (MIA), while much attention has been focused on car sales, UK motorcycle registrations fell by 26.8% to 10,465 in July, and have plunged by 16.8% in the first seven months of the year, compared with the same period last year.
Sales of the smallest bikes, of less than 50cc, have dropped by a third in the first seven months, hit by rising unemployment among youngsters, their most likely buyers. "We're influenced by the wider economic situation it will improve when the job market improves," said Sheila Rainger, at the MIA. "Young people, aged 18 to 21, are big purchasers of bikes and they are finding it hard to find jobs."

Sales of the biggest motorbikes, of more than 1,000cc, have been a bit more resilient, but are still down 8.7%. "That's the enthusiast part of the market," explains Rainger.

The entire $50bn global industry is suffering. Japan-based Yamaha, the top selling brand in July, has seen its global sales fall by 33%, while Honda's revenue has fallen by 29%, and Suzuki's by 27%, according to Bloomberg data.

Last week, Ducati, the Italian superbike maker said it is slashing production by a fifth or more than 8,000 bikes and its bosses have taken a 10% pay cut as the market for luxury rides has reduced by almost a third in the first half of the year. The drop-off has been particularly dramatic in the US, which, along with Italy, accounts for half the company's sales, as buyers are finding it more difficult to get credit for their purchases. Luxury bike sales in North America have halved.

In July, American bike manufacturer Harley-Davidson, whose low-slung motorbikes defined a generation of American rebels, cut 1,000 jobs and closed four of its plants amid falling demand. The company said it will ship about 220,000 bikes this year significantly down on last year's 303,479.
Selling a secondhand motorbike ranging from a 1,000 scooter to a 10,000 Harley Davidson is also not easy. Jacek Rzeznik, an investment banker, posted a sale ad for his Triumph Daytona 675 Sports Bike on the Bloomberg financial information service on 29 June. With an asking price of 5,400, by Friday last week he had received no enquiries. But he had three offers for his BMW car. "I guess motorcycles are more of a luxury than cars," Rzeznik said.

In a bid to boost the market, the industry association is planning a 1m campaign to encourage consumers to get on two wheels. "It is about stressing the freedom and the flexibility and the economy that a motorbike gives you you save time and money, you have a lot of fun," Rainger says.
The Association is also debating whether to push for government aid, following Italy's example. Italian scooter sales jumped by 31% in June, spurred by a set of government incentives, according to the country's industry body Ancma.

Other manufacturers, such as Italy's Piaggio, plan to expand in Asia in an attempt to generate new sales. But others, such as Harley Davidson, are forced into cost cuts as they face credit downgrades that make their interest payments more expensive.

Fitch, a ratings service, believes the outlook is far from good. It recently downgraded Harley Davidson to reflect concern that sales could "remain at depressed levels for a prolonged period" and worries that "consumers trade down to less expensive models."

Cheers - Frank
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