It is therefore not surprising that the segment received a hit from the global economic crisis in 2009, resulting in more than 17% fewer motorcycles, or 137,045 units, being shifted compared with 2009, according to estimates from the German Motorcycle Association (IVM). Key players in the industry include Honda Motor, with a market share of more than 14%, followed by Yamaha Motor and BMW with respective market shares of 11. 9% and 11. 5% in 2009. Business Monitor International Ltd Page 48 Germany Autos Report Q1 2012 Segment News.
No Recovery In Sight For Motorcycles Segment BMI has significantly revised down its outlook for motorcycle sales in Western Europe in view of growing concerns about weak economic growth in the key markets of Germany and France, while the large markets of Spain, Italy and Greece are performing worse than expected. Estimates from the European motorcycles association (ACEM) show that the market for motorcycles has contracted by almost a quarter since 2008 and we expect further contraction in 2012 as the region comes under the influence of widespread austerity measures.
Although growth should return to positive territory from 2013, we see little likelihood of the market returning to pre-crisis levels at any time during the forecast period to 2016. Crisis Or Change Of Preference? Indeed, there is little optimism in the motorcycles segment, with sales for the first three quarters down more than 9% year-on-year (y-o-y), to 1. 23mn units, despite declines of 13% and 15% y-o-y in 2009 and 2010 respectively. The blame partly lies in a sharp reversal in demand from Germany and France, both of which were posting positive growth until H111.
To a large extent, this is the outcome of the general use of motorcycles for leisure rather than a means of transport in the region. It is therefore not surprising that as consumer confidence wanes owing to the eurozone sovereign debt crisis, households feel less inclined to make non-essential purchases. All of this comes at a time when sales in Italy and Spain which together account for over 40% of all motorcycles sold in the EU are reporting declines of over 15. 6% y-o-y each.
From Bad To Worse Europe Motorcycle Sales Growth (%chg, y-o-y) * BMI forecasts. Source: ACEM, BMI Business Monitor International Ltd Page 49 Germany Autos Report Q1 2012 We have accordingly revised down our 2011 sales forecast from a 2% y-o-y decline expected earlier to a much sharper 10. 5% decline. In 2012, we expect a clear divergence in motorcycle demand between the six markets. The likes of Germany, France and the UK are likely to return to positive growth, mostly helped by favourable base effects and relatively better economic conditions.
Meanwhile, demand in Spain, Italy and Greece will be hit by strict austerity measures adopted by their respective governments, mass unemployment and a decrease in consumer wealth. In total, this will result in a further 0. 25% contraction in motorcycle demand in the region, making it the fifth consecutive year of contraction for the segment. Regulatory Costs Although we expect demand to grow thereafter, recovery will be very modest, with the market growing an average of just over 3% y-o-y between 2013 and 2016.
Rising ownership rates and insurance costs coupled with an ageing population in the region will significantly dampen consumer interest in motorcycles. Far From Recovery Europe Motorcycle Sales: Historical Data and Forecast f = forecast. Source: ACEM, BMI Additionally, we expect the segment to face a slew of regulatory changes, all of which will lead to marked increases in motorcycle prices and will consequently mar growth. The European Commission (EC) is currently looking to improve technology in the sector and make it safer and more environmentally friendly.
A policy aimed at gradually moving to stricter emission standards is likely to be put in place, with the Euro 3, Euro 4 and Euro 5 standards to be made compulsory by 2014, 2017 and 2020 respectively. Meanwhile, the ECs plans to increase safety requirements for motorcycles is most Business Monitor International Ltd Page 50 Germany Autos Report Q1 2012 likely to lead to the mandatory fitting of anti-lock braking systems in medium- and high-performance motorcycles and automatic headlamps in all L-category vehicles (comprising two- and three-wheel powered cycles, mopeds, motorcycles with and without side-cars, on-road quads and mini-cars).
For a segment which will still be very fragile, such regulations will indeed be a spoiler. Business Monitor International Ltd Page 51 Copyright of Germany Autos Report is the property of Business Monitor International and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holders express written permission. However, users may print, download, or email articles for individual use.