13 time motorcycle world champion Angel Nieto has passed away at the age of 70 after suffering injuries in a quad bike accident on July 26. Nieto won 13 titles in the 50cc and 125cc classes. His superstitious beliefs meant he referred to his tally of championships as ’12+1′. He was the first Spanish rider to race in the world championship and the first Spaniard to win the world championship title.
Steppenwolf coined the “born to be wild” moniker which became synonymous with Harley-Davidson. Harley is all about conspicuous consumption. It has generally been a good indicator of discretionary income. Harley is not so much about transport but lifestyle. Harley-Davidson’s sales fell 9.3% in the U.S. and 6.7% globally in Q2 2017, ending June 25th. Harley also stated it had lost ground in the big-bike market (601cc and above), dropping from 49.5% market share to 48.5%. Matt Levatich, President and CEO, Harley-Davidson. “Given U.S. industry challenges in the second quarter and the importance of the supply and demand balance for our premium brand, we are lowering our full-year shipment and margin guidance.” Q3 shipments are expected to be down c.20% (39,000-44,000 units).
Harley-Davidson sold 262,221 motorcycles last year and forecast a flat market this year but has downgraded those numbers to a forecast of 241,000 to 246,000 units (-7~8%). US shipments were well below expectations in the US.
Harley-Davidson is suffering from divine franchise syndrome. It has failed to modernize its line up until very recently. While it has plans to put 2mn new bikers on the road over the next 10 years, its competitors do not seem to be suffering with BMW, KTM and Triumph hitting new shipment records. The European makes have much broader product line-ups which adds to the rumours that Harley may wish to bid for Italian sportsbike maker Ducati from Audi to plug the segment gaps in its line up. Harley has had a failed attempt in the sports category via Buell but the Italian maker brings a proper platform to the party vs an in-house employee wanting to rev up Harley products out of a barn.
You have to hand it to Valentino ‘The Doctor’ Rossi, the 38-yo pensioner scrapping it with kids almost half his age. I’m an unashamed fan as I have been since 1996 when he was in the 125cc class. He managed to win the Dutch GP in Assen today in a typical strategic race, weighing up and wearing down his competition. 9-time world champ, 115 wins and the only rider to win races across a 20-year career. It is no wonder he’s paid €20mn per annum given the fact he hasn’t lost his edge. Sure he isn’t winning with the ease of his youth but he’s still majorly competitive. He is still in the hunt for a 10th championship. Forza Vale
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
2006 MotoGP world champion Nicky Hayden aka the Kentucky Kid has passed away at the age of 35 after suffering a cycling accident last week in Rimini, Italy. The support for him from the motorsport community was huge. Even Aussie supercars had #gonicky hashtag stickers on their cars. Hayden was universally liked on and off the track.
Hayden’s death comes a month after Michele Scarponi, a veteran Italian professional cyclist, was killed after being hit by a van while out on a training ride.
Tommy Hayden issued the following message following the death of his brother,
“On behalf of the whole Hayden family and Nicky’s fiancée Jackie I would like to thank everyone for their messages of support – it has been a great comfort to us all knowing that Nicky has touched so many people’s lives in such a positive way.
“Although this is obviously a sad time, we would like everyone to remember Nicky at his happiest – riding a motorcycle. He dreamed as a kid of being a pro rider and not only achieved that but also managed to reach the pinnacle of his chosen sport in becoming World Champion. We are all so proud of that.
“Apart from these ‘public’ memories, we will also have many great and happy memories of Nicky at home in Kentucky, in the heart of the family. We will all miss him terribly.”
Aussie Moto GP rider Jack Miller had a huge off in Free Practice 4 at the French GP. Coming off the start/finish straight he lost control at 300km/h and was flung off after hitting a wall. Prognosis – shaken not stirred. A good advert for Dainese airbag leathers and AGV helmets.
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?