August marked the eighth consecutive month for positive YTD motorcycle registrations, with an increase of 2%. However, industry experts reported that dealers experienced a small-volume month in relative terms because of the downturn in showroom traffic. This was likely caused by “factory fortnight” and a surplus of customers taking a summer holiday or looking after children on school breaks. writes Neil Richardson, head of the motorcycle division at Close Brothers Motor Finance.
Despite this, last month’s used bike sales performed well, defying the cyclical lull in demand usually experienced at this time of year. Some manufacturers even responded to this uptick by adapting their finance options accordingly, allowing dealers to switch used bike customers to new. Interestingly, whether we are talking new or used, consumer sentiment towards niche models is up and we’re seeing more and more bikers purchase the “bike of their youth”, a trend which we expect will continue in the coming months.
August saw the tail end of the hottest summer since records began, helping bike registrations gather strength and putting dealers in good stead for September. This has boosted optimism with many expecting the market to remain buoyant in the coming months.
Nevertheless, dealers shouldn’t rest on their laurels as it can’t be ignored that the motorcycle industry has been undergoing an unprecedented amount of change in the finance sector, particularly in the area of costs and commissions. Dealers are having to contend with high street banks which are offering lower rates and 0% offers to get customers through the doors and although this isn’t a new phenomenon, the trend has accelerated over the past few months.
Dealers also need to consider the fact that any older stock they hold depletes in value when manufacturers offer promotions on new models. These incentives drive customers towards new bikes as there is minimal difference in the monthly payment between new and used. To overcome this We have seen some dealers reduce the amount of used stock they have and concentrate on more specialised and classic or niche models such as The Café Racer Instead.
Brexit is currently the hot topic on everyone’s lips, however, dealers have not shown too much concern at this stage. There are concerns around threats of a tax shake up in the US and it would be wrong not act with caution. If the proposed tax hikes hit Indian and Harley-Davidson, we could potentially see ramifications on pricing in the UK.
While the only real option is to wait and see, dealers can protect themselves by diversifying their stock and exploring the range of finance and aftersales available to them within their current customer base.
The bike market has performed well this year and is expected to continue doing so in the coming months. The key for dealers to continue riding this positive wave is to remain engaged in where customer demand lies and stock the relevant bikes on the forecourt.
motorcycle market 'performing well'
