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

                            Nov 3, 2022 - Harley-Davidson Recall
                            • Harley-Davidson in October issued a safety recall for nearly 200,000 different 2019-2022 Trike and CVO Trike and 2020-2022 Touring and CVO Touring motorcycles. According to the National Highway Traffic Safety Administration, the fault involves a software issue that determines when the rear brake lights on these bikes are illuminated. This condition could cause vehicles following those bikes to misjudge when a bike in front of them is actually braking, increasing the risk of a crash. The recall followed news of a strong third quarter for Harley-Davidson, which saw double-digit increases in sales and profits, although its retail motorcycle sales in North America and worldwide total declined 5% and 2%, respectively. Retail sales in Asia Pacific were up 18% over the same period.
                            • Just as the easing of supply chain issues is lifting vehicle production capacity and inventories on dealer lots, high vehicle prices, inflation, and rising interest rates are weighing on car shoppers, The Wall Street Journal reported in October 2022. And that was before the Federal Reserve raised interest rates by another 0.75% in early November. Moreover, Fed Chairman Jerome Powell said Americans can expect more rate increases, though perhaps not of the same magnitude as the most recent ones. A worsening economic picture and higher interest rates are raising questions about whether consumers will still keep snapping up cars and trucks at the same pace once stock levels improve, according to WSJ. In the third quarter, overall, industrywide sales in the US were about 3.36 million, roughly flat over the year-earlier-period, according to Wards Intelligence.
                            • Zero Motorcycles, a US manufacturer of electric motorcycles, in September 2022 released its DSR/X ADV bike that features a top speed of 112 mph and range of up to 180 miles, according to the company. Range has presented a challenge for EVs, but a choice of five riding modes results in up to 180 miles of “city” riding, with 85 miles of highway range, DealerNews reports. The DSR/X ADV bike is equipped with a 17.3-kWh Li-ion power pack, but there is an option to sacrifice some of the “glove box” storage space to add a Zero Power Tank (essentially a small, second battery) that increases power to about 21 kWh. In addition to Zero, only Cake and Energica offer full lineups of street-legal electric motorcycles, according to Motor Biscuit. Harley-Davidson spinoff LiveWire also offers an electric bike.
                            • Motorcycle manufacturers struggling with an ongoing shortage of semiconductors constraining innovation and production are poised to benefit from the passage of The Chips and Science Act of 2022 (aka the CHIPS Act), which will provide $52.7 billion in direct financial assistance for the construction and expansion of semiconductor manufacturing facilities in America. State-of-the-art motorcycles require electronic components, but the lack of sufficient semiconductor inventory is making it difficult to produce and stock models with the newest features and technology. Dealers are expected to see a surge in new electronic systems on motorcycles when the shortage subsides, according to Motorcycle & Powersports News. President Biden signed the bipartisan bill into law in August 2022.
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