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Friday 3rd July 2015

Now we only have 95% of a recession

THE new motorcycle registrations data for Europe so far this year confirms the fragility of the recovery that last year's market statistics started to show.

While some 65 percent of Europe's motorcycle registrations remain based on just seven markets (Italy, France, Germany, Spain, UK, Switzerland and Austria) the variables within those individual national markets have international significance - for motorcycle manufacturers and for parts, accessory, performance, and apparel product manufacturers and brand owners.

It can be no coincidence that macro-economic factors and motorcycle regulatory issues are at their most challenging in the one of the 'Big Seven' where there is still very little sign of growth yet - France.

While there are signs that the rate of decline is now slowing down in France, leading the motorcycle industry trade association there (CSIAM) to forecast a possibly slightly improved market by the end of 2015, at -2.8 percent for the first five months of the year, the peak selling season for larger displacements, the French market remains conspicuously and comparatively weak.

The year started equally uncertain in Germany, where trade association data shows sales down in January and February, before recovering to +4,75 percent up for the year-to-date by the end of May.

With Italy up by a very encouraging +10 percent for the first five months of the year, the UK a very healthy +13.57 percent, +14.36 percent in Switzerland and Spain up massively by nearly 18 percent, the trend data for the major markets is robust.

However, while upward trends are to be welcomed, they have to be seen in context - trends don't pay bills, results do, and context is king.

The ACEM data puts new motorcycle registrations for the 28 EU member states plus the two members of the European Free Trade Zone for which data is recorded (EFTA - Switzerland and Norway) at just over 840,000 units in 2014. That compares to a pre-recession peak of nearly 1.6m in 2007 - a near 100 percent decline - so while welcome, growth rates of between 5 percent and 18 percent in markets that have declined by nearly 100 percent clearly still have years and years of recovery ahead before we get anywhere near the market we had a decade ago.

Market growth remains fragile

The ACEM data for France shows motorcycle registrations there peaking at nearly 240,000 units in 2007, down to a low of 148,000 in 2013 and, according to their methodology, slight growth in 2014 to just over 153,000 units.

While the UK and Germany are going to get closer to their 2007 figures sooner, if current trends are sustained, the decline was brutal in Spain, where 270,000 sales had collapsed to around 92,000 by 2103, but of the "Big Seven" the Italian market has seen the 434,000 motorcycle registrations recorded in 2007 go into complete freefall - bottoming out at 154,000 in 2013.

With manufacturers such as BMW, KTM and Ducati regularly reporting all-time production and sales records currently, other manufacturers such as Triumph, MV Agusta and Harley-Davidson, Kymco and some other Asian brands doing well and looking at European expansion, and while there are still casualties (EBR and Gas Gas/Ossa being two recent ones), even some of the traditionally "poor men of Europe" such as Moto Guzzi and other Piaggio brands doing better than has been the case at times in their storied histories, it is the originators of the superbike boom, the authors of what until recently was the "modern market" story, the Japanese "Big Four", who have suffered most.

Here too though, check this out for context. In April this year Japanese motorcycle exports to Europe were down by nearly 8 percent year-on-year at 12,742 units; in May of 2007 that figure, by no means the largest month of that year, was over 52,000 machines.

For the whole of 2003 Honda, Yamaha, Suzuki and Kawasaki exports to Europe totalled over 420,000 units compared to under 158,000 last year.

I realise that most of you reading this will know all this, it is not "new news" after all - but sometimes you have to just take a moment and a deep intake of breath to contemplate the sheer size and vertiginous slopes of the mountain the motorcycle industry in Europe has just started to climb.

As I have been saying regularly the past 24 months, "better is good", and like any first gear, the first steps are the toughest and require the greatest of effort.

I am not negative about the coming months and years, just suitably cautious. It is worth remembering just how far we still have to go before anyone thinks that the recession is over; it isn't - all that has happened is that this year we "just" have 95 percent of it left to endure.

I don't want to rain on anyone's parade, but don't put the umbrella down quite yet!


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