Idling motorcycle industry hopes to pop a wheelie on new models
Detroit — In the 1960s and '70s, they were one of the more visible symbols of a young and freedom-loving generation. Today, however, the nation's love affair with motorcycles is on the wane. Motorcycle sales were down about 11.9 percent for the first nine months of 1987, the R.L. Polk Company reports. Add to that the effects of a plunging dollar, and Japanese manufacturers - who dominate the motorcycle industry - are losing money. They are also looking for ways to recapture the interest of American buyers.
There are several key reasons that motorcycle sales have declined, says Jon D. Row, national sales administration manager with the American Honda Motor Company, based in Gardena, Calif. For one thing, there is the maturing of the baby boom. ``There are just less men in the 18-34 age bracket today than there were five years ago.'' He also cites the rising cost of insurance and availability of other products competing for everyone's discretionary income. Manufacturers have also found it difficult to expand their appeal beyond traditional motorcycle buyers, industry observers say.
Perhaps the industry's biggest problem is the shift in exchange rates. ``The bottom line,'' Mr. Row says, ``is a 25-30 percent price increase over the last two years.''
In the United States, Honda is the giant of the motorcycle industry, with a 1987 market share of about 45 percent; by comparison, Yamaha has a 19 percent share; Kawasaki and Suzuki each have a share of about 12 percent; while the only remaining US motorbike manufacturer, Harley-Davidson, has a 10 percent share. (These figures also included sales of motor scooters, all-terrain vehicles - now banned by the federal government - and other motorcycle-like products.)
Honda has taken several steps to shore up its market. For one thing, Row says, the company is copying the tactics of its new-car planners, introducing new upscale touring models that appeal to aging, more affluent baby-boomers.
He describes these as ``reentry bikes [which] look like a bike of 10 to 15 years ago and are targeted to someone who had a bike in college or younger, who got married, and got out of motorcyles.'' At the same time, they offer ``things people have never seen before,'' like six-cylinder engines, reverse gears, improved rider comfort, aerodynamic styling, even high-fidelity sound systems.
Honda has also changed its advertising campaign for the first time in a decade to appeal to a broader spectrum of buyers, and company figures show an increasing number of first-time women buyers.
Honda officials are hoping the motorcycle industry has hit bottom and is finally climbing back up. For the first time in several years, company planners are forecasting a slight growth in dollar volume, and stable or slightly increasing unit sales in 1988. The company was especially pleased by the reception its 1988 models got at a recent dealer show. According to Roger F. Lambert, spokesman for Honda of America Manufacturing Inc., orders from dealers will keep the company's factory in Marysville, Ohio, busy throughout this year.
The $35 million plant went into operation in 1979 with a work force of 64 associates (Honda-ese for blue-collar workers). It built just one model, the CR 250R, a relatively simple-to-build dirt bike. In 1986, Mr. Lambert says, ``We invested another $10 million to improve production and flexibility,'' and today, the 350 associates at the 260,000-square-foot facility produce five distinct models, including the $9,998, top-of-the-line Gold Wing; the $5,798 CBR 1000 Hurricane sport bike; the $5,198 VT 1100 Shadow, a custom bike cruiser; the similar-design $4,598 VT 800 Shadow; and the VF 750 Magna, a $4,498 performance custom bike.
While dealer orders are surprisingly strong, Lambert says, the Marysville plant will be able to run at full capacity supplying bikes for export to nearly 20 Honda markets overseas.
``This plant is the only place in the world where the Gold Wing is made, and we've been exporting it since 1980 to about 14 countries,'' he says. ``In January, we'll begin exporting it to Japan. We have also exported some of our other models to other countries.''
Lambert says exports have totaled between 15 and 17 percent of Marysville's production for the last several years, a figure likely to increase in 1988 because of growing overseas demand for the Gold Wing and the VT 1100.