Motorcycle Dealers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,900 motorcycle dealers in the US sell new and used motorcycles plus other powersport vehicles. In addition to motorcycles, products sold include motor scooters, motorbikes, mopeds, all-terrain vehicles (ATVs), and personal watercraft. Companies typically sell replacement parts or accessories and offer repair services. Some companies offer maintenance programs.

Dependence on Motorcycle Manufacturers

Dealers rely on a limited number of manufacturers to develop compelling new products that customers will buy.

High Capital Requirement

The ability to secure floor plan financing is critical to funding inventory purchases.

Industry size & Structure

A typical motorcycle dealer operates out of a single location, employs less than 20 workers, and generates $4-5 million annually.

    • The motorcycle dealer industry consists of about 5,900 companies, employs 69,400 workers, and generates over $28 billion annually.
    • The industry is fragmented - the top 50 companies account for just 17% of sales.
    • The largest dealers operate "superstores", which stock a wide range of products and serve an extended geographical market. The largest Harley-Davidson dealers can generate more than $50 million annually.
                            Industry Forecast
                            Motorcycle Dealers Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Apr 16, 2024 - Slower Growth Expected for Industry
                            • The US motorcycle dealer industry is projected to grow at a CAGR of 2.1% between 2024 and 2028, slower than the overall economy's anticipated growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. Factors that continue to limit consumer spending are higher price levels and interest rates, though both are expected to improve in 2024. During the COVID-19 pandemic, many vehicle dealers suffered from shortages and supply chain hiccups. While managing some inventory issues, motorcycle dealers saw a surge in sales during the pandemic as consumers embraced the socially distanced and affordable rides. Post-pandemic, consumer spending has shown slower gains of 2.5% in 2022 and 2.2% in 2023, supported in part by household savings built from federal pandemic relief programs. The forecast predicts that 2024 may bring further slowdowns, but improving consumer sentiment may provide household spending gains, together with rising wage rates and lower inflation.
                            • Consumer confidence levels were essentially unchanged in March 2024, after a dip in February following three consecutive months of growth, according to data from The Conference Board. The Conference Board’s consumer confidence index was 104.7 in March 2024 from 104.8 in February 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future.” Peterson added that confidence rose among householders 55 and over but fell for those under 55. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                            • According to a recent survey by Cycle Trader, 65% of active in-market buyers are planning to purchase a new motorcycle by summer 2024, and most buyers expect the entire process to take less than three months. Interest rates (30%) and rising vehicle prices (29%) are factoring into buyer’s decisions, with the timing of the purchase influenced by a buyer’s economic circumstances (34%). Respondents say the economic climate will not significantly impact their purchasing decisions, and more than two-thirds of potential buyers expect the economy will improve or remain stable. Regarding payment methods, nearly 40% of respondents are considering financing options, and some 60% plan to pay with cash. About 61% say they are considering a used vehicle purchase, which may require a smaller down payment. Driving motorcycle purchases are a desire to upgrade to something nicer or newer (26%) and being propelled into the market by a new hobby (21%).
                            • Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
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