Aussie market up 4.9 percent in 2008

November 25, 2008

While the Australian car industry continues to be hit with a blowtorch from all angles -- Ford's announcement that it'll keep its Geelong engine plant open beyond 2010 one recent piece of positive news - the local motorcycle market continues to power ahead, and is up 4.9 percent on the same period in 2007.

The BikeSales Network has obtained the October year to date (YTD) figures, which reveal that 108,652 ATVs, scooters and motorcycles (on and off-road) have been sold in Australia, compared with 103,598 in 2007.

The road sector has steered the bull market, recording a 10.9 percent rise YTD, while scooter sales are up 13.4 percent - although starting from a much lower base than road and off-road motorcycles.

ATVs have also recorded a YTD rise of 4.8 percent, while the off-road sector has contracted 3.3 percent - not entirely unexpected after massive growth over the last couple of years.

Honda has retailed its No. 1 spot overall with 25,587 units, ahead of Yamaha (22,826), Suzuki (14,572), Kawasaki (9618), Harley-Davidson (6383) and KTM (4499).

Honda is the pacesetter in the ATV and road segments, while Yamaha is the clear leader in off-road. SYM looks like finishing the year as the scooter boss cocky, although the Piaggio cluster (Piaggio, Gilera and Vespa) is well ahead of the pack in combined sales.

In the road segment, ACT denizens lead the way - in percentage terms - as the biggest purchasers of touring, adventure touring and sportstouring machines, and the other market leaders are Vic (supersport), WA (250cc road), Tas (naked), NT (cruiser) and NSW (supermotard).

The next big test for the motorcycle market will be in November and December, which are normally premium months for retailers ahead of Christmas.

Further afield, a massive turnaround in the fortunes of the Australian dollar will have a big impact on retail prices in 2009 - if it already hasn't started to creep into the value of some current stock holdings.

In May this year, one Australian dollar was buying close to 96 US cents, which was the highest since 1984. Now it's languishing at 64.6 US cents - and it could go even further as international investors continue to offload our dollar.

Even the Reserve Bank has been forced to intervene by spending millions of dollars to 'buy' our currency in an effort to mitigate some of the damage.

Probably more telling for Australian consumers is the Aussies dollar has also lost its might against the Japanese Yen. In May, one dollar bought just over 100 Yen, and now that's plummeted to 63.

About 67 percent of ATVs, scooters and motorcycles sold in Australia are Japanese products.

Meanwhile, the Aussie dollar has held firm against the British Pound, but has depreciated slightly against the Euro.

Of course, Economics 101 tells us that a depreciating currency is great for export markets, but it also hits importers hard - which is the Australian motorcycle market in one.

Tony Hinton, the General Manager of Motorcycles at Honda Australia, believes the falling Australian dollar is going to present some real challenges in 2009.

"With depreciation in the range of 30-40 percent, price rises will undoubtedly have an influence on demand," Hinton said. "Over the next two years, some products that may have amounted to discretionary spending in the past may not be so anymore.

"However, car prices are likely to rise as well, so motorcycling remains an attractive opposition and the market will continue to grow because of that."

The change in the economic landscape over the last few months has overwhelmed Hinton.

"There is no doubt about it: change has been radical," he said. "The balance of November and December will tell us a lot how the motorcycle market is tracking. This is certainly a unique situation."