The global motorcycle market is ever changing, and we are entering what I think could be a very exciting period of time. China and India are playing a bigger role in the industry in the western world and as time progresses this influence will inevitably grow.
We have had periods when the British, American and European brands were the kings of the road. That changed into an era when the big 4 Japanese companies became the monsters of our industry. Now we have multi Industry corporate giants in Europe doing their best to steal that market back and a whole host of lesser known companies looking to take a piece of the pie.
So let us look at that pie.
A Worldwide Motorcycle Sales Breakdown
The UK and European markets pay on average twice as much per motorcycle as people do in the USA. However, the USA pays 3 times as much per motorcycle as they do in India and 4 times more per sale than in China. India is now the biggest and fastest growing motorcycle market worldwide.
I could use actual figures here but to make it easy, the total revenue from sales in India is 1.5 x as much as the Chinese market, 10 x more than the American market and 30 x bigger than the UK market, I couldn’t get exact figures for the whole of Europe here but projections would suggest it is close to twice as much as the US market if the UK is included in a whole of Europe figure.
In simple terms. For every $1000 spent in the USA, between £1500 and $2000 is spent in the UK and Europe, £8,000 in China and $10,000 in India. This means for any multi national company the Indian and Chinese markets are far more lucrative in many ways than the US or European markets.
Revenue from the UK Motorcycles market is around $1.1 billion at present, I don’t have the figures for the whole of Europe at present, sorry, but we are probably looking at around the $10 billion range including the UK. Revenue from the Motorcycles market in USA is around £6.4 billion. For China that is around $23 billion and for India, around $26 billion. So if you are a manufacturer, where would your focus be?
What We Buy
What we see, is that across the different ranges of motorcycles, that the European market buys more high spec expensive motorcycles, the US buys lower spec, high capacity motorcycles and both India and China buy many more motorcycles, but that they tend to be lower capacity, cheaper motorcycles.
Now comes the BUT, because there is an ever growing successful middle class in India and China that is now looking to buy what we would call “Aspirational” motorcycles. These are in general 400cc and above motorcycles that are more than simple transport. I think this is why the Industry has so many bikes being released into what we think of as the middleweight sector right now.
One of the benefits is that the manufacturers can offer a cheaper alternative to US and European customers going through a cost of living crisis.
European and American customers are moving to smaller capacity bikes, and the burgeoning market of middle class buyers in China and India, mean motorcycles in this market segment can be sold worldwide. This is a much bigger potential market for the manufacturers than for the bigger more expensive motorcycles we have become accustomed to.
Manufacturing motorcycles in this market segment just makes more sense from a global sales perspective.
Now, in Europe and the UK, emissions regulations have dictated what bikes we can buy for years now, but what you may not know is that China took a slightly different approach. It decided that the way to approach the problem, and also generate more sales, was to limit the age of motorcycles which can be used on the road to 10 years.
The Working Life Of A Motorcycle
This meant that motorcycles that were made specifically for the home market, had a maximum working life of 10 years.
Now, as the average age of a motorcycle in Europe and the USA is now over 15 years old, you can immediately see why there would be a difference in the build quality of motorcycles built for the different markets.
We in Europe and the US expect our motorcycles to last beyond 15 years, whereas a Chinese customer has no interest in a motorcycle lasting longer than 10 years.
As the markets in China and India have matured, people are now spending more money on larger capacity motorcycles. At the same time, the US and European customers are beginning to replace their motorcycles sooner, so the market itself and the working life of the motorcycles manufactured is changing. Not in the way I would like may I add.
I look at what is on offer today and wonder how many of these bikes will still be serviceable in 50 years time like the old Laverda 750 I have been rebuilding.
A Worldwide Market
What it does mean though, is there is a fast growing, very competitive, middleweight sector where motorcycles can be offered to worldwide markets.
This has led to the growth in the number of new motorcycles aimed at that market segment. Motorcycles like the Suzuki DE800 and Honda Transalp to name just 2.
The good news is, that it means new, more affordable motorcycles are being released onto the US and European markets.
Bikes like the Benelli TRK 502, CF Moto MT650 and Moto Morini X-Cape were at the forefront of this move, but the Japanese and European manufacturers are following. The release of modular middleweights from Aprilia, Honda and Suzuki for 2023 follow in the footsteps of the MT range from Yamaha and the Ducati Scramblers, and their will be more to come.
An Overlooked Sector
One market segment that has been overlooked a lot by the Western markets in recent years. That is the 400cc class. Which happens to be the fastest growing sector in both India and China. We have now got the KTM390, R3 and Kawasaki 400’s, but this sector is set for major growth I think.
Most riders these days rarely seem to carry a passenger, so the 400cc sector will do everything allowed legally and beyond when riding on the roads. They are more than capable of stealing your licence.
I am lucky to remember bikes like the RD350LC, FZR250R and VFR400 so I have no doubts about what a small capacity sport bike can do and how exciting they can be to ride.
The Next Battleground
Once the new middleweight battleground has calmed down, I think this 400-500cc sector will become the next war zone in the motorcycle industry.
These bikes offer definite cost benefits, and more than enough performance for today’s busy roads. These are motorcycles already being built by the Chinese and Indian manufacturers, so prepare for an influx of bikes like the Kove 450 Rally and the CF moto 450SR soon. You may well have a lot to choose from.
Ahead Of The Game
Royal Enfield are definitely ahead of the game in this sector but there are a host of smaller high spec sports 400’s coming onto the market driven by the WSBK Supersport 300 class.
A Performance Benchmark
Kawasaki have set the performance benchmark with the new ZX4R, but it comes with a hefty price tag that makes it more expensive than many bigger bikes. I applaud their risk taking here, and I for one will be interested to see how well it sells.
A Commitment To The Sector
More likely to take a bigger market share is the twin cylinder Ninja 400 they have built, which means people even have a choice of 400cc bikes within the Kawasaki range. It shows the commitment the company has to this sector.
As I have said, this is the fastest growing sector in the Chinese and Indian markets, which means for the companies that succeed, there will be immense financial rewards.
As much as right now the 700-800cc sector is the latest battleground in the industry, I think very soon that the focus will shift to the 400cc segment of the market.
What Will The Changes Mean?
Only time will tell if the US, European and UK markets start to shift further away from the large capacity machines they have become accustomed to.
There will always be a place for the bigger bikes, I just hope we are moving to a market that is more balanced again, as it used to be. Then perhaps we will be graced with bikes that can recreate the joy that bikes like the CB400/4, RD350LC, FZR250R and VFR or RVF 400 gave us.
What is it they say, “It is better to ride a slower bike fast, than to ride a fast bike slowly”
Cheers for watching everyone.
You know the score by now.
Let me know your thoughts in the comments below.
Are we in for a change in focus?
Who will be the long term winners in this global marketplace?