Is the Motorcycle Industry Dying or Changing?

Reports of the imminent death of the motorcycle industry have been flooding in, all thanks to millennials’ supposed disinterest in the industry. But, is this actually the case, or are things just changing?

A Dying Industry?

To be short and to the point, no, the motorcycle industry is not dying. The vast majority of articles which claim the motorcycle industry is dying point to industry sales figures today versus sales figures in the 90's (during the economic boom). This is ridiculous, of course, motorcycles aren’t selling like they did in 2006. To get a true view of the industry you must look back to before the boom started.

For most of the 1990s, around 300,000 motorcycles were sold in the U.S. per year, before massively picking up in 1999 and peaking in 2006, with 1.1 million bikes sold. In 2016 just under 500,000 motorcycles were sold in the U.S., nearly 200,000 more than any given year in the 1990s.

From 1992 to 2016 there has actually been an annual compound growth in the industry of 2.36 percent. So, this should put to rest the notion the industry is dying.

A Changing Industry

While the industry isn’t dying, it certainly is changing. A recent study on the motorcycle industry found, by 2022, the sub 250cc category should be the most lucrative, with the 200cc-500cc category behind it. The same study also found low-priced motorcycles would be the most attractive to consumers, and mid-priced bikes would be the second most attractive.

This industry forecast shows us the market is moving towards smaller, cheaper motorcycles. This is a stark contrast to the 1000cc supersport and 1200cc cruiser motorcycles which were so popular 10-15 years ago.

Why the Change

The real question isn’t if the industry is changing, we know it is, it’s ‘why is it changing’? One of Ridenow’s recent articles entitled ‘Are Millennials Riding as Many Motorcycles as Previous Generations?’, touched on some of the reasons the motorcycle industry is changing. So, this article will try not to repeat too much of that information.

A Matter of Finance

This was covered pretty well in the previous article, so this will be a short summary. The changing bike scene is somewhat down to the new buyers, millennials. On average, millennials have less disposable income and more debt than the generation did before them at the same age. On top of this, they have just lived through one of the biggest recessions in modern history.

So, big motorcycles which are expensive to buy and maintain aren’t exactly rating high for these buyers, understandably. Likewise, premium motorcycle brands are usually more expensive when it comes to servicing and buying parts, so could take a hit in their sales.

A Different Environment

Of course, urban areas aren’t just for the younger generation, but they are heavily populated by millennials who move to cities to start careers. Big, heavy bikes simply don’t make sense in this environment; large bikes are harder to manurer around traffic, can’t lay much of their power down on city streets and have poor fuel consumption in stop, start traffic.

It’s no surprise then that bikes like Ducati’s Scrambler and Triumph’s Street Twin have been so well received. These mid-sized bikes, designed for urban environments have been a big success, especially with relatively new riders.

Safety and Sense

There was a time when the motorcycle industry revolved around ‘more power, more speed’, however, this doesn’t seem to be the driving force behind many new riders today. Things like ABS rate highly for many new riders, as does an economical engine – with gas prices on the rise, this should rate highly for everyone.

People are aware now more than ever of their carbon footprint, leading some to question if a bigger engine with higher CO2 emissions is really necessary. An engine which produces more CO2 also costs more to tax and, for those who are looking for a cheap and cheerful way to get around, it just doesn’t make sense.

To wrap up, all industries must change in order to meet the demands of their consumers, and the motorcycle industry is no different. What we see now is the industry’s reaction to the most recent economic and societal changes around the globe. And, while the industry’s performance is nothing to write home about, it’s not dead just yet.