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 6,000 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 6,000 companies, employs 71,000 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

                            Jun 17, 2024 - Higher Consumer Spending, Sales
                            • Motorcycle dealers may see a boost due to higher consumer spending levels in March 2024 compared to a year ago, according to the latest data from the Bureau of Labor Statistics (BLS). While 0.3% lower in March 2024 compared to a year ago, sales for motor vehicle and parts dealers were 11% higher than the previous month, according to the latest data from the Census Bureau. Employment by motorcycle, boat, and other vehicle dealers fell by 3.4% in April 2024 compared to a year ago, following a nearly 2% decline in March year over year, according to the latest data from the Bureau of Labor Statistics (BLS). Meanwhile, average hourly wages at other motor vehicle dealers, which includes motorcycle dealers, increased 2.4% in April 2024 to $27.25 per hour.
                            • The National Federation of Independent Business (NFIB) monthly jobs report shows that unfilled job openings were up in May 2024, with a seasonally adjusted 42% of business owners reporting jobs they could not fill. The reading is up two points from April 2024. A seasonally adjusted net 15% of small business owners plan to create new jobs over the next three months, up three points since April. About 20% of owners reported labor quality as the most important problem facing the business. According to NFIB Chief Economist Bill Dunkelberg, “An exceptionally high number of small businesses are still struggling to fill open positions. Although plans to increase compensation have fallen, small firms continue in their efforts to attract and retain workers.”
                            • Sales of new motorcycles and scooters declined 5.6% in Q1 2024 compared to Q1 2023, while ATV sales fell nearly 5%, according to the latest Motorcycle Industry Council (MIC) data in DealerNews. Motorcycles and scooters represented 76.4% of total new-unit sales in Q1 while ATVs had a 23.6% share. On a positive note, new on-highway motorcycles sales were up 2.1% in Q1 year over year. The report tracks new-motorcycle retail sales data from 14 leading manufacturers and distributors in the US.
                            • 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.
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