Six years after the Great East Japan Disaster we visited the devastated towns that were all but wiped out by the tsunami that followed the M9.0 earthquake. Some 16,000 lives were lost and another 2,600 missing due to the events of March 11, 2011 according the Reconstruction Agency. More than 60% of casualties were over 60 years old. Over 400,000 homes were heavily damaged or destroyed. 726,000 homes were partially damaged. 470,000 people were evacuated from their homes. As of July 2016, the number of evacuees has decreased to less than 150,000 people, among 50,000 are still in temporary housing. We look at the changes in 2017. Report here Tohoku Recovery – Analogica KK
The average age of motorcyclists in Japan is 53 years old and continuing to climb as younger riders looking to obtain new licenses continues to drift. Between 2010 and 2016 the Japanese National Police Agency (JNPA) noted that large capacity motorcycle license holders (ogata – classified as 400cc+) have fallen by nearly 1,500,000. While mid-size (chugata – classified as below 400cc) have risen around 715,000. Female riders have shown a similar pattern of 178,000 fall in ogata licenses and 147,000 increase in chugata respectively. While there are still 9.175mn men and 625,000 women willing to get out on the highway with large capacity bikes, the trend is alarming. More frighteningly, new graduates aren’t lining up either. 30,000 fewer students lined up to get a mid or large size bike license between 2014 and 2016 representing a 12.3% dip. Latest report found here Motorcycles in Japan – Analogica KK
Nomura Securities popped a leaflet in the post scouting for people to attend investment seminars. What caught my interest was a seminar for those genki 100 year olds who need to plan for the future. While Japan has the highest longevity of anywhere I wonder if these centenarians have seen more cycles, crises and financial meltdowns than the 23yo freshman sales guy at Nomura combined!
The Japanese National Police Agency (JNPA) has recorded 6 million extra pension aged drivers in Japan over the age of 65 in the last decade. The total is now 14.2mn. The number of 80yo+license holders has reached 1.6 million. Over the last decade the total number of licenses has not changed much but the age composition is definitely skewed to the elderly. I was waiting at the front door of the Roads & Traffic Authority the day I was able to apply for a license. It seems that Japanese kids are not as excited to get freedom on four wheels. There are 6.8mn fewer driver’s licence holders aged under 40 over the last decade.
The worry for the police is the growing incidence of traffic accidents involving elderly drivers.
Earlier in the week we touched on the 1,800,000 fall in the number of Japanese who possess a large capacity motorcycle license. The status of the Japanese motorcycle companies makes for some interesting comparisons. Honda remains the largest global manufacturer with over 17.7 million units produced annually. Yamaha has seen a c.1mn unit decline over the last 5 years but a jump in the average profitability of its bikes. Suzuki has cut production by almost 50% as it continues to rack up losses and Kawasaki has stuck to a large bike bias which has stabilised profitability. Here is a look at the state of revenue growth over the last 5 years among major listed motorcycle manufacturers.
Profitability is a different picture among the global makers. Suzuki has been struggling to make a profit, Kawasaki has drifted down but remained in the black. Honda has been outpaced by Yamaha and among the foreign makers BMW Motorrad and KTM have beaten Harley-Davidson’s performance.
The foreign makers are all much smaller scale than the Japanese and tend to focus in the larger engine size segments. Harley-Davidson has suffered the most among the 5 big players in terms of unit growth. KTM, followed by BMW Motorrad have made the biggest relative gains.
Looking at average EBIT/unit produced yields starkly different results. Harley nets around $3,000 per motorcycle in EBIT with BMW around half of that amount at €1,285 ($1,430) with KTM half of that. Kawasaki makes the most per motorcycle among the Japanese on a unit basis. Honda has remained relatively stable at $103 (although we should note that this is closer to $170 as the consolidated production number is about 10m units and the global number including equity method companies is the 17.7m) and Yamaha at $64. These are ridiculously low numbers and of course identifying mix within that would yield far more healthy results for certain models and losses on others.
One thing it points out is that focused strategies appear to be paying off for the Europeans and to some extent Kawasaki which has moved away from a me too approach. Efficiency and brand seems to be paying off for BMW’s continued rise and a broad range of product unlike Harley which seems to be stuck in a divine franchise scenario. Profitable but struggling to break out of cruisers. It has had a stab at sports bikes through Buell (business was spun off and EBR has since closed) and the Porsche designed V-Rod (now out of production). Now that Ducati is potentially being sold by Audi, does Harley look to use a proper sports brand with no clash in its line up to fuel (no pun intended) its growth?
Step back in time. Ōuchijuku was a small post station in Japan’s Edo period and is now located in the town of Shimogō, Fukushima (in Aizu area). Think of it as a Japanese version of the Cotswolds given the authentic thatched rooves. For bikers it is a fantastic set of switchbacks to get there.
There is a stream of fresh water running down the street on both sides which local vendors put bottled drinks as a way to keep them cool.
The street is probably around 500metres in length but you can sample all different types of food and drinks along the way.
Anyone wanting to see interesting things in Fukushima, this is a must. Tsurugajo Castle is also worth the time especially the Oyakuen gardens nearby
Tsurugaoka Castle in Aizu Wakamatsu is also worth the time…especially the Oyakuen gardens nearby…