AM Online

Motorcycles: Used machines

The used motorcycle market is tiny compared to the used car market.

There are around 25 million cars on the road, with around 2 million new motors being sold a year.

In comparison, there are around 1.6 million bikes, scooters and mopeds currently on the road in the UK and last year new sales totalled 144,583.

Few of this number are used day-to-day and as it’s mainly an enthusiasts’ market there’s a high percentage of multi-bike ownership.

According to research by Honda UK, a couple of years ago, only between 750,000 and 1 million actually ride regularly.

The Motorcycle Industry Association says that 3.5 million people have a motorcycle entitlement on their licence and, of these, 15% of the active users are women.

The age of bikers is also quite high, with the majority being in the 30-50 age bracket.

This is a worry for the industry, as new blood is needed, especially as the bike test will become harder and more costly from this September with the onset of the Second European Driving Licence Directive.

So, it’s nowhere near as big as the car market.

But that has not stopped a few large car chains dipping a toe into the water – mostly with disappointing results.

Some car chains have looked at an average bike shop and seen that the structure is pretty similar and wanted a slice of the action.

In the 1990s, Motorcycle City was taken over by the Dixon group and the ‘stack ‘em high, sell ‘em cheap’ approach was used.

At first, motorcyclists took advantage of the cheap prices and the business expanded. But aftersales support suffered and the shops were staffed by people who had no idea about motorcycles.

Business suffered as the chain soon occupied the lower slots of satisfaction surveys.

A tie-up with Carnells followed, but the slide continued and – despite rebranding as Riossi – the company ceased trading in 2003.

The main reason for its demise was a fundamental difference between car and bike buying.

Matthew Stone spent 13 years in the automotive world, rising from a car salesman to regional director for Jardine Motor Group.

Then he moved to Honda UK’s motorcycle division where he spent five years.

He has a unique perspective on the differences between the two and now spends his time running Hill House Solutions, a company working with motorcycle dealers to improve profitability and turnover.

He says: “The basics are the same – control your overheads and run the business properly, but there’s a fundamental difference and it is the mindset of the customer.

With the exception of brands such as Ferrari and Porsche, most people buy a car as they need it – it’s a utility purchase.

A car is a recognised essential component of day-to-day life. It’s nowhere near as emotional a decision as buying a bike.

“Biking is a hobby, a way of life.

Bikers pop to their nearest bike shop at weekends to have a coffee with the staff – who they will know and trust. You don’t do that in a car dealership.

Car dealerships which have gone into the bike world have failed to notice that difference.

Only BMW merges the two with any real skill.” #AM_ART_SPLIT# Parallel imports - 10 years on

A decade ago the used market was hit by parallel imports and this was a seismic event in the marketplace – the tremors of which are still being felt today.

A number of big, multi-franchise bike shops saw that they could import similar bikes from the European Union or even further afield, bring them into the UK and sell them at anything between £1,000 to £3,000 less than the UK on-the-road price.

They were largely the same bikes as those sold in the UK, albeit with headlights that dipped the other way, and kph instead of mph speedos.

Some – like models from France – were also restricted to 100bhp, but many of the larger parallel dealers would address all or most of these issues and de-restrict the bikes.

This hit second-hand sales hard, leaving many dealers with stock that was similarly priced to that of new parallels.

Eventually in 1997 Honda UK tried taking these importers to court. Two years later it settled out of court. This forced the major UK importers to drop their prices – so much so that in 1998, a Honda CBR900RR Fireblade cost £9,515.

The price at parallel importers D&K was just £5,949, and the official price a year later was down to £7,524. A decade later the latest CBR1000RR Fireblade costs just £9,200.

What parallel dealing did was boost sales of new machines and force the UK importers to cut their prices by up to 30%.

This had the knock-on effect of pushing used prices further down.

  • Read this story in full in the June 27 issue of AM. To subscribe to AM magazine click here or call 01733 468659.
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