Part of a new series for our A&R Pro readers, we will be providing regular digests of motorcycle news, topics, and issues from key regions around the world, in an effort to make sure our readers have a firm grasp on the pulse of the entire industry.
Our first edition looks to our friends to the north, where our colleague Zak Kurylyk tell us how the Canadian motorcycle industry is handling the coronavirus outbreak. Look for more installments, from other regions, in the weeks to come. -JB
The ongoing COVID-19 pandemic is hurting the bike industry as a whole, but for the Canadian motorcycle scene, it is potentially disastrous. Think 2008 financial crisis, but on steroids. If the 2008 recession was King Gong, then COVID-19 is going to be Godzilla.
The timing couldn’t be worse, due to the seasonal structure of the riding season in Canada, and due to the massive drop in oil prices. As a result, most of the problems faced by the American industry are intensified in Canada.
Very few Canadian motorcyclists are actually riding this time of year, but March-April is when deals get done, and money changes hands, Without this, all the major players are going to take a big hit. Retailers, rally organizers, race teams – everybody’s looking at having 2020 essentially wiped out.
As a result, most of the problems faced by the American industry are intensified in Canada. With all the questions surrounding the economy, it’s likely some major players are never coming back.
Coronavirus in Canada – The Silent Spring
The spring selling season is important in all of North America, but it is especially so for Canada, as that is when the bills are coming due for the parts, accessories, and gear that were ordered the previous year.
It is also when the majority of new motorcycles are sold, and a lot of new gear; if the shop isn’t selling snowmobiles in the winter, spring is when the money finally starts rolling in. Now, that is not happening in much of Canada.
Although the rules vary by jurisdiction, every province and territory has declared some sort of emergency in the past couple of weeks. Many motorcycle dealerships have closed their doors to the public as a result – as some saw which way the wind was blowing, and shut down to the public even earlier.
The trouble is, not only is spring usually when Canadian dealers see the most traffic, but this spring was looking particularly good for the industry. It should come as no surprise, Canada’s motorcycle sales are closely tied to weather.
A late spring means fewer sales, an earlier spring means more sales, and the most populous regions of Canada were seeing an early spring this year, after a couple years of late starts.
An insider from Ontario told me dealers were expecting to see strong results in 2020, after the tough years, and now that opportunity has vanished.
Still, even when closing the doors was a voluntary decision, many dealerships saw this not only as a necessity to reduce expenses through tough times, but also as necessary to protect their employees.
A dealer in eastern Canada told me it was tough to have his business closed on a warm Saturday in March, when he could have had 50 customers stopping by, but he also realized the risk his workers would have faced.
So, for now, he’s only taking drop-off service work, by appointment only, and all his parts and accessories sales are being dropped off at customers’ houses. This business model seems to be the new norm for many Canadian dealers.
But while this is tough across all Canada, the damage is doubled in the oilpatch, especially Alberta.
The past few years have been tough on the Canadian oil and gas industry, with petrol-barons’ plans for pipelines and other expansions thwarted at every turn. It has hurt powersports sales, as oil workers and their economic spin-offs were driving sales.
“It’s all trickle-down from that,” one laid-off Albertan dealership insider said. “Rig pigs like their toys, and their bosses buy bloated adventure bikes with 10 grand in accessories bolted to them right out of the crate.”
Now, those sales are gone, and there is talk of financial skullduggery sinking major dealerships, as banks get a better picture of what is really going on with the money they have loaned out.
Manufacturers Holding Firm
Despite the grim outlook at the dealership level, the manufacturers are holding firm, at least for now. The larger players seem intent to ride out this mess without panic.
There are some changes; much of the Canadian press fleet has been locked down, so journalists aren’t riding madly off in all directions for test rides. But, David Grummett, director of communications for Canada’s Motorcycle & Moped Industry Council, says he hasn’t heard of any layoffs inside the organizations of BMW, Suzuki, Honda, etc.
“When you deal with the bigger companies, maybe it’s a little easier for them to weather the storm,” he says. And although one insider told me the parts and accessories distributors have taken their reps off the road, Grummett says he figures this year’s gear should be basically in-place for the season.
If there’s any disruption in the supply chain, he imagines that will come next season, when the industry assesses what is left over after a tough 2020 selling campaign. Having said that, not everyone is staying steady.
One employee of a major distributor told me employees were scrambling to figure out supply chains in the wake of China’s COVID-19 shutdown, and another dealership employee had tales of management panicking and buying up consumables, anticipating an imminent shortage.
Online Coming Out Ahead
There is one player that is looking like they will come out ahead in all this. Canadian Internet retailers have both their major competitors restricted, with local dealerships and American retailers both facing setbacks.
While some dealerships may be delivering phoned-in orders to customers, it seems like a clunky system. Internet retailers can flex their muscles now, with their streamlined websites and express delivery.
Traditionally, Canadian web stores could not only poach customers from dealers, they could also get customers from US-based outlets. With most Canadians living within a short driving distance of the border, it has been common for riders to buy parts and gear in the US, and have them shipped to a PO box or some other stateside mail service.
A quick trip across the border to pick up the parcel, and you have got your order at less cost than buying in Canada (and sometimes much quicker, too).
Now, that cross-border shopping has been shut down, thanks to travel restrictions from the coronavirus pandemic. If customers want to shop online for motorcycle parts and gear, they have to buy from a Canadian website.
If the online retailers in the Canadian market exercise good business sense, this is their time to really pull ahead.
The Race Scene
Outside of the retailers and dealerships, what is the Canadian moto scene looking like? It’s going to be a hard year.
This week, the Canadian Superbike series announced title sponsor Mopar has pulled its money for the season. It was no surprise, as perennial front-runner Jordan Szoke had already lost his Mopar Express Lane sponsorship at the start of April.
Now, CSBK is looking at a revised schedule, with the first three race weekends (Shannonville, Grand Bend, ICAR) cut from the schedule. At this point, the first scheduled race is the two-race Shubenacadie round in late July, followed by Mosport and then a Shannonville doubleheader. However, CSBK czar Colin Fraser said it is too early to be certain the summer races will be allowed to run, thanks to social distancing rules.
It’s an especially hard blow, as 2020 marked the 40th anniversary of the first Canadian superbike racing championship, and CSBK had big celebration plans. That first title was decided in a two-race series; it’s highly possible we will end up seeing the same for this season, if authorities continue to enforce provincial border quarantines and clamp down on public gatherings, and sponsors continue to back out.
Most of the regional roadracing series aren’t making any closure announcements yet. If social distancing rules remain in place when those seasons start (in May, mostly), then it’s hard to see the schedules running as planned, though.
Now, complications of inter-provincial quarantines are also possibly going to disrupt the racing, and as most Canadian tracks are shared with car events, it will be tough to re-jig the schedule if needed.
Hangouts on Hold
The other big moto-culture casualty is Canada’s growing hipster rider scene. The quickly-spreading events organized by The Moto Social are now in doubt. More organized gatherings like the Backroad Ball and Freedom Machine are also iquestionable.
The casual riding scene seemed to be gathering momentum in Canada in the past couple of years (although that may sound like a paradox), but a combination of reduced riding season, a crackdown on social events, and considerable job losses are going to be a setback in this segment.
Expect to see a major increase in the amount of cobbled-together bobbers, brats, and cafe racers showing up for sale in coming months.
On a much more informal basis, many riders are headed out on two wheels and meeting up with friends, saying it’s for their own mental health.
They are also being told by authorities that if this keeps up, there will be consequences, and citizens ignoring social distancing rules are already being ticketed. There will be no more meet-ups at Tim Hortons for the foreseeable future, it seems.
The Waiting Game Continues
For now, there is little that anyone can do about this miss. The federal government’s instructions are changing daily, and the news hasn’t gotten better since the COVID-19 outbreak started in Canada.
If you are a racer, a retailer, or you just want to ride your machine without being hassled by the police, there is really only one thing you can do right now: hurry up and wait, and hope there is still a good chunk of riding season left when this has passed.
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