Tag

business

Browsing

The motorcycle industry is still deep in the throes of trying to prevent the United States Trade Representative (USTR) from taxing small-displacement motorcycles from Europe with a 100% tariff.

The proposed tariff would double the cost of any two-wheeled vehicle manufactured in Europe, with displacements between 51cc and 500cc , but the real kicker is that the proposed tariff isn’t really about motorcycles…it’s about beef.

For roughly 30 years now, the United States (one of the largest producers of beef) has been trying to gain access to the European market, but the EU bans beef that has been grown with hormones, because of health concerns (the ban also has the nice side-effect of protecting European beef growers).

To put pressure on the European Union, the beef industry (through lobbying the USTR) has proposed a number of retaliatory tariffs on European imports in the USA, motorcycles being one of them. Welcome to International Trade 101.

However, a major breakthrough happened last week, one that could affect this bovine standoff, and it has to with Chinese chicken.

Dirt Quake, the grassroots flat track event, has been acquired by North One TV. The transaction sees North One TV acquiring both the Dirt Quake name, and the Dirt Quake events, with the core Dirt Quake team, including Gary Inman, staying on for the foreseeable future.

North One says that with the acquisition the media company plans to grow Dirt Quake internationally, with Dirt Quake already hosting popular events in the UK, Europe, and United States.

Presumably this means an expansion of Dirt Quake events into new markets, where flat track racing is already popular.

Did you just feel that? That movement was a tectonic shift in the motorcycle landscape, as India just surpassed China as the world’s largest market for two-wheel vehicles.

Just how big is the Indian motorcycle market? Last year, over 17.7 million motorcycles were sold in India. That is over 48,000 motorcycles sold…each day. Compared to China, that is a margin of roughly one million motorcycles per year (16.8 million units sold last year).

India has seen a sharp rise in the sales of two-wheelers within its borders over the seven years, growing over 32% during that timeframe. Transportation in general has been growing in India, but that growth has been fueled by the country’s two-wheeler market.

I woke up this morning to a message from a colleague, with a link to a story that linked Royal Enfield to buying Ducati Motor Holding. The story was from a fairly reliable news publication, but the headline read “Royal Enfield Might Consider Buying Ducati Pretty Soon” – the grammarist in me cringed.*

“Might consider” is the most nebulous phrase in the English language. Let’s think about that phrase for a moment, as it literally means that you are considering the possibility of considering something. Don’t get me started on the timeliness of “Pretty Soon” in the news realm, as well.

Metaphysics and meaningless headlines aside, for our purposes this narrative devolves further in that this story offers nothing new, beyond the story that Reuters published two weeks ago, which set off alarms in the motorcycle industry around the world.

Episode 51 of the Two Enthusiasts Podcast is out, and covers a variety of interesting subjects for your two-wheeled lifestyle. First up, we talk shop about going to track days, such as the benefits of using tire-warmers and how to slide a motorcycle in and out of a corner.

The conversation then gets more serious, and focuses on the recent financial news about Dorna Sports (media rights holder to MotoGP and WorldSBK), and how its investors are using the media company as a piggy bank.

We finish the show discussing some movements by GoPro in the action camera sector, as the behemoth video company tries to deal with its product increasingly becoming a commodity.

It’s worth pointing out that this show was recorded before our trip to the Circuit of the Americas, so we will be trickling out that content going forward…there’s a lot of it.

You can listen to the show via the embedded SoundCloud player, after the jump, or you can find the show on iTunes (please leave a review) or this RSS feed. Be sure to follow us on Facebook and Twitter as well. Enjoy the show!

For as long as we have covered the Pied Piper dealership rankings, one brand has stood above all others in customer satisfaction, and that brand has been Ducati.

But for the 2016 rankings, we have a new boss in town, as BMW dealerships have taken the top honors in the most recent Pied Piper Prospect Satisfaction Index.

For those readers who aren’t that aren’t familiar with Pied Piper, the company’s Prospect Satisfaction Index is sort of the Consumer Reports of a dealership network experience, and acts as a measuring stick for how a brand is performing when it comes to interacting with potential customers.

As such, the PSI takes into account a mixture of “mystery shopper” experiences, along with actual sales success for each brand, thus giving a mixture of subjective and objective measurement for a company’s dealer network.

We have been here before, with financial news outlets discussing the possibility of Volkswagen divesting Ducati Motor Holding from its collection of companies. Let’s be clear, this talk about talk…not talk about action.

The idea of VW selling Ducati isn’t new. We first reported on this rumor back in September 2015 – when VW was found fudging around with its diesel-powered cars. Many thought the ramifications of Dieselgate would mean a bevy of brands being unload by the German car company. Nothing came of that.

Then last year, around June 2016, more talk of Ducati’s divestiture came to the forefront. The rumors were so strong, that Audi AG (the direct owner of Ducati) had to publicly state that the Italian motorcycle brand wasn’t for sale.

So here we are today, again with reports that the highest levels of Volkswagen are considering looking into selling their little motorcycle brand.

The jockeying for manufacturers among satellite teams has begun. First out of the gate is the Reale Avintia Racing team, who have renewed their contract for another year with Ducati. Ducati will supply two Desmosedici GP17s to the team for the 2018 season.

The question of who will follow is still open. The Tech 3 team is firmly tied in with Yamaha, and the Marc VDS team has a strong commitment from Honda, though the results they have booked with the RC213V have not been as expected.

On the heels of Harley-Davdison’s lackluster first quarter results of the year, the American brand has announced that it will be laying off 118 employees at its vehicle operations plant in York County, Pennsylvania.

Harley-Davidson says that the staff reductions are coming as part of a “production realignment” and that the layoffs will begin June 23rd, with a completion date around the end of July 2017.

Though a couple brands are showing gains, 2017 looks like it will be a tough year for the motorcycle industry – a statement supported by Harley-Davidson’s Q1 2017 sales figures, which are down 4.2% compared to last year, with 70,831 motorcycles sold to consumers.

That figure gets worse when you zero-in on Harley-Davidson’s domestic numbers, with the brand’s motorcycle sales in the United States down 5.7% for Q1 2017. Still, it is important to note that Harley-Davidson maintains a 51.3% marketshare figure in the 601cc-plus category, in the USA.

Compare that to Harley-Davidson’s progress abroad, where on its face things don’t seem to be going too poorly, with sales down only 1.2%.

However, it should be noted that shipments abroad are down considerably, 14.7% to be exact, a sign that bikes aren’t moving as quickly as expected in markets outside of the United States.

If you think emission regulations in the United States or Europe are onerous, then you should see the hash of things that is being played out in India right now, as hundreds of thousands of vehicles have been sitting on showroom floors, flirting with disaster at the possibility of being declared unsellable in the country.

The exact figure varies from which source you believe (and their understanding that “lakh” means 100,000 in Indian parlance), so the affected number of vehicles ranges from 700,000 to 1.4 million units – most of which are trucks and two-wheelers.

As such, just days before the deadline 600,000 motorcycles soon-to-be non-compliant motorcycles were believed to be still unsold, the result of an interesting intersection of a rapidly changing environmental landscape, an unforgiving legal system, and a slowly reacting vehicle industry.