Economy Impacts Motorcycle Industry

 Economic Pains Affect Motorcycle Sales

It seems like every time we turn on the news, there’s another industry belting out the bad economy blues. The motorcycle industry, widely supported by recreational riders using discretionary income, is not the exception. High gasoline prices seen throughout much of 2008 caused an increase in scooter and dual sport bike sales, true, but off-road, street, and custom bikes numbers took a savage dive. Off-highway motorcycle sales and ATV sales were hardest hit,  showing around a 25% drop in sales over the previous year. Street bike sales were only down 2.1%, and scooters enjoyed a healthy 50.6% increase. These numbers are through 3rd quarter 2008.

Motorcycle Industry Reacts

Honda was one of the first companies to react to the economic downturn for the motorcycle industry. Early in 2008, Honda made an announcement that it would be halting U.S. production in 2009 and would be returning its Honda motorcycle production once again to Japan. This decision by Honda is expected to affect some 600 workers at their Marysville, OH, plant. While Honda assured these workers that they would be relocated into automobile plants in the area, one has to wonder whether Honda can make good on that claim, considering the condition of the auto industry.

In September, Big Dog Motorcycles, a high-end motorcycle company based out of Wichita, also announced layoffs of nearly 50 employees to occur by the end of ’08. Paul Hansen, Big Dog marketing director, says, "The layoffs are a consequence of economic problems, which no motorcycle company has been immune to this year (’08)."

Most recently, in reaction to poor sales in ’08 and plummeting stock numbers, Harley-Davidson made the announcement that it would be eliminating 1,100 jobs over two years, would consolidate several of its plants, and close some others.  Jim Ziemer, the chief executive for Harley-Davidson, also retiring in 2009, stated in an interview that about 650 of the jobs cut would be in Wisconsin, more than 400 would be made in the New York facility, and around 85 cuts will occur at the company’s Kansas City, MO, motorcycle plant.  Further turnover at the upper management level also is taking place as the CFO Tom Bergmann is temporarily replacing Sy Naqvi, formerly head of financial services.

Some Motorcycle Rallies Cancelled

One of the things motorcyclists look forward to each year as the icy roads thaw and riding season returns are the many motorcycle rallies, rides, shows, and other events. Thousands of bikers take to the road each year to attend these events, many of which have become biker tradition. No doubt riding a motorcycle is one of the most exhilarating of all ways to get from place to place, and spending a day or more at a rally with fellow riders who "know why dogs hang their heads out of car windows"  is worth the long winter’s wait. 

Over the years there have been increasing number of rallies added to the calendar. Some are small and last only a day, and some have grown into mega-events that last an entire week. These rallies take months of  planning, long days of preparation and, as one might expect, they take more than a little money. While the 2009 rally calendar has remained pretty full, there are a couple of well-known and highly anticipated rallies that have had to announce their cancellation.

The Honda Hoot, which had been ongoing for 15 years and had some 16,000 attendees in ’08, has announced the ’09 rally will not take place this year.  And while the economy has sucker punched a number of rallies, this year both the The Hollister Rally, which has been ongoing (on and off) for over 60 years and drew a crowd of over 130,000, and  Myrtle Beach Bike Week were canceled after a series of vicious sissy-slaps delivered by the pantywaist members of these city councils.

Still there are lots of great rallies, races, runs and other events scheduled for ’09. Since their future depends on support from the motorcycle community, hopefully, those who are able to attend one or more of these events will. And for those city councils who’ve made the decision to turn away bikers in ’09,  we hope the millions of dollars that the bikers would have spent there will help the economies of the cities where bikers are welcome.