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 6,200 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 11 workers, and generates $4-5 million annually.

    • The motorcycle dealer industry consists of about 6,200 companies, employs 70,600 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

                            Mar 7, 2023 - Slower Sales for LiveWire Electric Motorcycles
                            • Harley-Davidson reported its global motorcycle shipments were up 18% in the fourth quarter year over year, but its electric motorcycle business LiveWire did not fare as well, according to Marketplace. LiveWire, a separate entity majority-owned by Harley-Davison, had a 28% drop in revenue during the fourth quarter. According to Jefferies analyst Anna Glaessgen, “The person who is buying a Harley-Davidson — everyone can picture in their mind — is not necessarily the same person who is going to gravitate towards an electric, sportier type of bike.” Approximately a third of electric motorcycle buyers in 2021 were new to motorcycling, per the Motorcycle Industry Council. Range limitations with electric motorcycles can also limit buyers, who may view the vehicles better for urban day trips like an e-bike or scooter.
                            • Consumer confidence levels declined in February 2023 for the second consecutive month, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 102.9 in February 2023 from 106 in January 2023, as high prices and rising interest rates affected consumers’ willingness to spend. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Consumer confidence declined again in February. The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more.” Plans to purchase homes, vehicles, and appliances have cooled, in addition to a drop in vacation intentions, per Ozyildirim.
                            • The global motorcycle market is projected to reach $233.5 billion by 2031 at an 8.6% CAGR, according to a new report from Allied Market Research. The global motorcycle industry generated $105.5 billion in 2021. Growth factors include the increased adoption of electric motorcycles; greater investment by manufacturers to innovate in performance, technology, and comfort in designs; and higher demand for two wheelers due to traffic congestion. The electric motorcycle segment is expected to have a 13.1% CAGR from 2022 to 2031, driven by greater demand for fuel efficient, low emission, and high performance vehicles; and stricter government rules and regulations related to vehicle emissions. Challenges for the motorcycle industry include the high cost associated with sports bikes and an increased risk of accidents.
                            • Dealers in the South region sold a higher average number of utility ATVs, according to a report in Powersports Business using data from Lightspeed. The study concentrated on 125,000 new and pre-owned units sold between Nov. 1, 2021 and Oct. 31, 2022, at Lightspeed dealerships. The dealers in the South region sold 103 units per dealer, the highest average number of units per dealer. In other regions, dealers in the Northeast averaged 81 units per dealer, dealers in the Northwest averaged 80 units, dealers in the West averaged 79 units, and dealers in the Midwest averaged 74 units. According to the study, 90% of utility ATV units sold were new, and 10% were used.
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