Motorcycle industry analysis Essay Example for Free

Motorcycle industry compendium EssayDefinition Motorcycles fall into the category called Recreational Vehicle, Motorcycle and Boat Retail Industry. These be companies that retail recreational vehicles, boats, motorbikes, jet skis, and/or re advancedd accessories. In Hoovers classification, based on the atomic subjugate 7 American Industry Classifications System (NAICS) and the older U. S. Standard Industrial Classification (SIC) system, pedals fall under a smaller subcategory called Motorcycle, ATV, and Personal Watercraft Dealers Industry.This U. S.industry comprises establishments in the main engaged in retailing new and/or utilise bicycles, motor scooters, motorbikes, mopeds, off-road all-terrain vehicles, and personal watercraft, or retailing these new vehicles in combination with repair services and sell replacement parts or accessories. Statistics In terms of looking at the whole industry, motorcycle dealers fool up a majority of the industry when compared with A TVs and personal watercraft dealers. The chart below shows statistics from 2002 comparing the motorcycle dealers with all proto(prenominal)(a) motor vehicle dealers in the industry.As the charts illustrates, motorcycle dealers made up 91. 5% of sales in this industry, while ATVs and personal watercraft dealers only contributed to 8. 5% of sales. Year 2002 Motorcycle DealersAll other motor vehicle dealers (ATV personal watercraft dealers) Total Establishments4,3845144,898 Sales ($1,000)14,636,299 (91. 5%)1,353,829 (8. 5%)15,990,128 (100%) Annual Payroll1,429,316106,6811,535,997 paying Employees46,0374,18850,225 www. industries. hoovers. com Analyzing data for motorcycle dealers between the years of 1997 and 2002 reveals some important information.The results show the growth and portion changes in certain categories pertaining particularally to the motorcycle dealer industry. While the number of establishments only increased approximately 21 percent, the amount of sales increased almost 99 percent. The annual payroll (excluded from the graph) increased 100 percent and the paid employees rose by 59 percent. These figures, illustrated through a bar graph below, indicate a growing industry especially for those companies already in the business with establishments formed. Motorcycle Dealers.Although there are more nonfranchised retailers in the industry, 80 percent of the industrys business is made up of franchised outlets. The average franchised motorcycle outlet generates sales and services almost half a dozen times that of nonfranchised outlets. In addition to selling motorcycles, dealers define up almost half of their business through sales of parts, accessories, and apparel. In 1997 approximately 6. 5 meg motorcycles were owned in the linked States, with California having almost two times more retail outlets than both other state.In terms of rider distribution, California, Texas, newfound York, Florida, and Ohio accounted for more than nonpareil-t hird of all motorcycle self-command in the U. S. In terms of a target market there seems to be no specific or clear differentiation. Below are some statistics that allow one to make judgments based on the Harley Davidson demographic profile. Gender20002001200220032004 Male91%91%91%90%90% Female9%9%10%10%10% Purchasers (2004) 42% Owned Harley-Davidson motorcycle previously 31% Coming off of competitive motorcycle 27% New to motorcycling or puzzlent owned a motorcycle Background and Competition.The earliest motorcycles were basically bicycles powered by small engines, and the motorcycle was considered a relatively cheap alternative to the more expensive, early automobiles. Many U. S. manufacturers produced motorcycles in the beginning World War I, contributing to a dynamic, if not booming, domestic market. Harley Davidson, Orient, Henderson, Cyclone, and Indian were the primary competitors at that time. enthalpy Fords affordable Model-T, however, doomed many motorcycle manufactur ers. In fact, by the end of the Great Depression, the only be manufacturers and sellers of motorcycles were Indian and Harley-Davidson.Indian closed down production and distribution in 1953. The late 1950s and early 1960s saw the first influx of low-priced, smaller Japanese motorcycles and scooters into the United States. Honda began U. S. distribution of its products in 1959, with the slogan, You playact the nicest people on a Honda, to combat the negative image associated with the sport. Yamaha starting selling motorcycles in the United States during 1960 Suzuki followed in 1963 and Kawasakii joined the competition in 1967. BMW opened a U. S. distribution arm in 1975, incorporating in New Jersey.Harley-Davidson ended years of private ownership in 1965 with a public offering of its stock, and ultimately merged with industrial giant AMF in 1969. The oil crisis in the 1970s prompted the popularity of the smaller motorcycles, mopeds, and scooters that were made primarily by Japanes e manufacturers. Dealers sold vehicles to those interested in conserving gas and finding cheap transportation. Harley-Davidsons market share, already dropping, was further threatened by Hondas 1969 entrance into the heavy and super heavyweight segment of the market.By the late 1970s Harley-Davidson faced severe production quality problems in addition to stiff competition. A heed buyout in early 1981 set the course for the companys revitalization. It was protection under higher tariffs however, recommended by the Inter discipline slew Commission that helped shut Honda out of Harley-Davidsons key market.In response, Japanese manufacturers evaded the tariffs by setting up lying plants in the United States. Harley-Davidsons resurrection and Hondas sagging sales worked to even the motorcycle market by the early 1990s. (www. answers.com/ number/motorcycle-dealers) Below is a pie chart that shows the motorcycle industry major players and their market share relative to one other. The B ig 4 Japanese have 70% of the capital dollars in the motorcycle industry. BMW and H-D combine for another 26%. Everyone else is pretty much a rounding error. At least by this measure these six companies (the Big 4 Japs, BMW, and H-D) utterly dominate the motorcycle market in every way that rattling matters. http//www. muddywatersmx. net Industry Trends and Current Events Motorcycling remains one of Americas most popular forms of recreation and transportation.The number of people who enjoy motorcycle activities is comparable to the number of people who engage in fishing, golfing, and camping. Because there are many sizes of vehicles available, motorcycling has become a family recreational activity. In addition to providing enjoyment, motorcycles, scooters, and all-terrain vehicles are used in industry in various ways. (www. answers. com/topic/motorcycle-dealers) The retail motorcycle, moped, and all-terrain industry is strongly affected by national economic trends. Recessionary an d expansionary trends essentially dictate the retail consumption levels of vehicles. According to Irwin Broh Associatess 1998 survey, the average motorcycle rider was a 38-year-old married male with a college education earning $44,250 per year. These older, more affluent riders of 1998 could afford heavier, more comfortable, more expensive motorcycles. Also, the ranks of women motorcyclists continued to grow in the 1990s, rising from 6. 4 percent of riders in 1990 to 8. 2 percent in 1998. (www. answers. com/topic/motorcycle-dealers) The growth from exports became a major player for the motorcycle industry in 2000. The demand by the foreign market was expected to grow well into 2007. The chart below shows the crystalize Destinations for U. S Motorcycles and Parts Exports by country for 2002 to 2003. The top two major players are Canada and Japan. On declination 23, 2003, the Environmental Protection Agency (EPA) enacted the newest set of emission standards for highway motorcycles Beginning in 2006, motorcycle manufacturers would have to reduce emissions of HC and oxides of nitrogen by 60 percent. (www. answers. com/topic/motorcycle-dealers).