After what can only be described as a difficult and often disappointing first half of the year, total registrations were 2.6% down at 62,277 units. The market is essentially static. But motorcycles, the meat and two veg of dealer prosperity, managed a narrow 2.9% rise at 47,004, including a miniscule snack of electric steeds. Best of that was to be found in the 501-1000cc spectrum, which climbed by 17.3% to 19,553. Above, 1000cc-plus machines finished 1.2% in arrears on 11,129. Below, 126-500cc tackle, which was also inevitably polluted with some scooters, declined by 7.2% to 9292.
The mobility sector’s bread and butter, combining up-to-125cc ICE and up-to-11kW electric products, collectively sank by 13.9% to 22,163. And just to stir in some extra confusion, scooters (excluding moped scooters) were 13.2% down to 12,335.
As you might note from our “numbers crunch”, some brands have prospered. However, market leaders Honda and Yamaha are not really among them. KTM recovered well from a low base post-pandemic and Triumph’s made a more modest but still satisfactory advance.
Motorcycles, the meat and two veg of dealer prosperity, managed a narrow rise
However, BMW Motorrad stood out, and also enjoyed the benefit of premium pricing. Much of the opposition is rolling on the basis of rapaciously budget-conscious alternatives. BMW would theoretically be on course to hit its German supremo Markus Schramm’s 10,000-unit annual aspiration for the British Isles if the second half of this year didn’t look so grim. Speaking to BDN recently, BMW Motorrad UK marketing and PR manager Scott Grimsdall avoided specific predictions, saying: “It’s certainly tough at the moment. But we’re doing alright.”
The same cannot be said for prospects in general. The Bank of England was lamentably slow to respond when inflation started to spiral upwards, engendering the cost-of-living crisis. And although its base interest rate has now risen from almost nothing 18 months ago to 5%, this key anti-inflationary measure has been dubbed “too little, too late” by many economists.
Against an increasingly puerile economic and political climate, Prime Minister Rishi Sunak and his Chancellor of the Exchequer Jeremy Hunt have sworn faithfully to halve inflation before the year-end. But how they intend to achieve this objective, without undermining growth and causing a recession, is as much a mystery to them as it is to us. Their favoured pocket weapon of choice, blocking wage rises for already under-paid staff in the public sector, won’t work. It’ll just force more people into food banks to feed their children (and discourage them from venturing into dealer showrooms).
Headline annualised CPI inflation has ameliorated to 8.7% at the time of writing. But that’s nevertheless more than four times the BoE’s 2% target comfort zone. A BoE base rate of 6.5% is in the offing for this autumn, and may reach 7%, according to some analysts. The immediately deleterious effect is hammering fixed-rate domestic mortgages due for renewal with excruciating repayment burdens for householders – yet another obstacle to making discretionary purchases in motorcycling’s orbit.
Another knock-on is the mushrooming cost of retail consumer credit. Take a glance through some of the figures now on offer in our trading environment, for regular HP and PCP borrowing. The Honda Financial Services in-house funding arm is currently flagging 8.9% APR. Kawasaki’s K-Options Finance backed by Black Horse has climbed to 9.9% APR. Yamaha Motor Finance from Santander now tops the lot, reaching 10.9% APR for mainstream purchases and 12.9% for junior products. Don’t for one minute assume these rates are set in stone. When the BoE base rate goes up, margins have to be maintained and they will follow suit, savaging affordability further.
To conclude on a meteorological metaphor, stealing William Shakespeare’s immortal prose attributed to the unfortunate King Richard III: “Now is the winter of our discontent”. It’s just come a bit early.
HALF-YEARLY NUMBERS CRUNCH
These “magnificent seven” totals (if we forgive Kawasaki for being awkward) are extracted from MCIA top-ten brand charts destined for press consumption, whereby each featured manufacturer appeared in every chart for the full six months to June 2023. Percentage movements are calculated for those which also appeared in every chart for the six months to June 2022.
Kawasaki failed to make the grade in February 2022 and therefore lacks a reliable movement indicator. Suffice to say its recent full six-monthly performance roughly matched the same level as last year, in both cases due to intermittent supply-chain grief appertaining to the European market – freely admitted as a problem by the parent company in Japan – rather than purely weak demand.
In contrast, leading Chinese flag carrier Lexmoto registered 3038 units spread across every month of the relevant period in 2022 but dropped off this year’s radar briefly in March and is therefore absent. However, Lexmoto’s tally for the remaining five months amounted to just 1361 units. So sales have approximately halved. And severe inventory sourcing difficulties from factories in China aren’t exactly a trade secret.
Despite well-evidenced recovery driven by a bevy of new models, Suzuki is still missing too. The brand was a no-show in January and February last year, so we were only able to count 1590 units in the subsequent four months, and disappeared again from the MCIA chart in February 2023. However, a total of 2703 units spanning five months was very promising, and easily beat Royal Enfield’s weakening six-monthly figures. The plight of Royal Enfield, sole significant loser overall, is addressed elsewhere in this issue of BDN.