The Ongoing Effect of the Coronavirus on the Motorcycle Industry
Due to COVID–19, all sectors of global manufacturing are suffering. What impact, though, is the ongoing pandemic having on already beleaguered motorcycle manufacturers? Also, what strategies have they implemented in response?
The motorcycle industry for a long time has been a tale of boom or bust.
In 2008, the US financial collapse saw bike sales plummet. A decade later, though, global motorcycle sales went through the roof thanks to a huge uptake in the Asian market.
This fluctuating trend continued in 2019, with new motorcycle registrations in Europe increasing by 8 percent. Yet when eventually bike sales slumped in India, the shockwave rocked figures globally, such is the size of the Asian market.
The result was an overall drop in unit sales of around 1.6 million. From the beginning of 2020, the motorcycle industry planned and strategized to put this situation right.
What they could not plan for, though, was COVID–19 and with it the need for social distancing.
Responding to the Virus
In Italy, one of the hardest virus–hit countries, manufacturing companies felt the full force of the lockdown. Ducati, however, having ended 2019 with an excellent sales record, decided virus or not, they weren’t going down without a fight.
The virus saw the implementation of an action plan to reduce all staff, excluding key personnel. This measure saw a split shift system, decreasing numbers on the production line, and clerical staff working from home.
Taking the decision to check the temperature of everyone entering the factory wasn’t enough. The Borgo Panigale plant had no choice other than to close its doors with production, not re–starting until the end of April.
Leading production lines at the Moto Guzzi, Aprilia, Vespa, and MV Agusta plants also came to an abrupt halt. However, they too, from April 27th onwards, slowly and with restrictions, came out of their enforced hibernation period.
At Triumph, the UK's most significant bike manufacturer, employees were also dealt a blow in February 2020 when hundreds of redundancies were announced as a result of the manufacturer’s decision to move production from the UK to Thailand.
Add to this, the enforced closing of the Hinckley plant due to virus restrictions. The future of this manufacturer does not look bright. Unsurprisingly, on June 1st, when Triumph re–opened for business, came the news of more global redundancies and the warning that sales may never fully recover.
With the easing of work restrictions in China, Honda’s production facilities are operating temperature checkpoints. The manufacturer is telling workers that they must respect social distancing rules by keeping 1–meter apart. Such is the new way of working on Honda’s factory floor.
Lockdown regulations and social distancing protocols have left motorcycle manufacturers and parts suppliers with no choice other to protect their workforce with safety rules and regulations.
A New Way of Buying
In the UK, main dealers, in compliance with government restrictions closed to the public. It was during lockdown that innovative ways of buying a motorcycle emerged.
Adopting a more cautious line, Honda, Yamaha, and BWM stated that leisure–use sales were for the immediate future off the cards. They did, however, offer the option of calling your local dealer to discuss a future purchase.
These measures are likely to become a new way of bike buying for many months, if not years to come.
The Way Forward
In the United States, the picture is a little less clear cut. Each state has its own dealership rules.
With inventory stocks packed high to the ceiling, though, US dealers are making it as easy as possible to buy online. Many offer extended purchase plans and low finance options.
Moto Guzzi, Aprilia, and Vespa all offered similar deals, while some dealers also offer to collect bikes for servicing.
A Contactless Culture
At the height of the virus, Ducati wholly embraced the new contactless culture. They introduced a 0% finance deal through their own finance house with delivery to a home or work address undertaken by participating dealers.
Lolling in the sales doldrums for the last five years, Harley–Davidson didn't appear to be doing much to trade out of the situation during the enforced virus shutdown.
The only discernible offer H–D committed to was a reduction of $2.5K off the 2020 LiveWire model. This discount brought the cost of their electric bike down to a mere $27K!
Showing them how to do it, Indian Motorcycles not only championed online purchases direct to the door but also gave buyers the option of having their bike customized.
The effect of the COVID–19 virus continues to wreak havoc on the global economy. However, motorcycle manufacturing plants and some dealerships are re–opening their doors.
While it is clear that the motorcycle industry will continue to struggle, at least some refused to take things lying down. Furthermore, indicators point towards the innovative online solutions created to overcome virus restrictions. Restrictions that may well be adopted for a long time to come as part of the new buying experience.