The first two months of 2020 weren’t that bad for motorcycle salesmen, but all of that changed in March, when the coronavirus panic started to spread from Asia into Europe and the American continent, and what followed was a tremendous slump in vehicle sales.
Consumer Confidence
Vehicle sales are often seen as a very accurate measure of consumer confidence, after all, most people wouldn’t buy an expensive car or motorcycle when they fear that they could get laid off within the next few months.
While most economic crises have a gradual impact on consumer confidence and the markets, a black swan event such as the coronavirus can be much more devastating for economies and consumer confidence.
The first evidence of plunging sales has become painfully evident in Southern Europe, where the virus has evaporated demand in Italy, Spain and France. In Italy, the lockdown has prevented dealers from selling anything at all, and year-on-year, motorcycle sales could come down 46% according to motorcyclesdata.com. Spanish and French dealerships expect similar results in what looks like the toughest market for two-wheelers since WWII. In Italy, not just sales are impacted, production has also come down with Ducati and Brembo closing their doors, following an emergency decree from the Italian government.
Northern Europe has seen less of a drop-off in March, but the worst is yet to come as countries such as Germany, The Netherlands and the UK are implementing tighter measures to combat the virus.
The panic in the U.S. might not have spread as fast as it did in Europe or in Asia, but dealerships are bracing for very poor results in Q1, and that after posting poor numbers for four years in a row. Record unemployment claims in the US are likely to worsen motorcycle sales throughout 2020, and the question remains if 2021 will be a better year for sales.
The worst impact can be expected in growth markets such as India, the Philippines, Pakistan, Malaysia and Indonesia, where light motorcycles are incredibly popular. In India, the biggest motorcycle market in the world, sales are set to fall by almost 25% in 2020,
Several manufacturers such as Bajaj, Royal Enfield, Suzuki and TVS saw a tremendous plunge, while Honda was the only brand to post positive numbers for March.
The coronavirus induced slump may have serious consequences for several motorcycle brands, some of which have even struggled to stay afloat during better times (Italian brands are notorious).
Another round of consolidation or cooperation between brands can be expected as the industry aims to reduce costs and increase profitability in times of crisis.
How have sales for Honda increased?