Why are they so cheap?

On Wed, 22 Sep 2004 20:06:54 +0100,

"death of the bike industry, pictures at 11".

 

I like that, bit of a gay colour that yellow one though. Indeed a
factory rat / fighter.

 

Shit, the all black version is a bit horny!

 

Looks like Triumph are getting things right lately.

 

Care to fill in a few details?


--

Cheers!
Fr Jack
96 Tiger.
FRJACK AT GMAIL DOT COM

 

Why, exactly, or can't you say?

 

Mark Olson wrote

Ask Des to send you a copy of the email.

 

The Older Gentleman said...

Thanks for that

<starts writing resignation letter>

 

OK: what we have here is exactly the same situation as happened just
over 20 years ago.

To wit: a declining market because people have other things to spend
their cash on (like paying off some of that consumer debt mountain), and
a recession (or at least, a chill) looming. (Rising interest rates for a
start).

In the early 1980s, the bike industry tried to counteract falling sales
by releasing a flood of new models. Between 1983-86 Honda practically
replaced its entire range. At exactly the same time, the trade refused
to believe that the downward spiral was just that - they thought it
would level out - and continued ordering new bikes in unrealistic
quantities. Over-supply put *even more* pressure on values.

The same thing is happening *right now*. I mean, ****, you can still buy
new *2002* model Ducatis, if you want.

The effect back then was collapsing residuals. With bikes having an
effective model life of two or three years, their used values fell. At
the same time, consumer confidence dropped. People became unwilling to
buy new bikes because they knew they'd be worth **** all in a few years'
time.

There were two notable exceptions: Kawasaki and BMW, both of whom
pursued a policy of evolution rather than "scrap everything, and let's
have a brand new model". BMW also had the advantage of having the new K
series: the first new-style Beemers for 60 years.

Kawasaki deliberately imitated BMW in marketing, and also, to an extent,
design policy (remember the GTR1000?).

Anyway, the result was a market that by 1986 had fallen to one quarter
of its 1981 levels (I'm talking new sales here).

Paradoxically, one benefit was that values of used bikes moved strongly
upwards in the mid-to-late 1980s. Because so few new bikes were sold
between 1982 and 1986, there were fewer used bikes around when the
market began to pick up again a few years later, and so clean used bikes
were expensive.

Now, if anyone thinks that what's happening now isn't the same, I'd be
interested to hear your arguments.

The bike trade is cyclical. Everything comes around again: insurance,
legislation, sales, accident rates, you name it. And it's coming around
again now. Put it this way - your shiny 2004 model Gixxer Thou is going
to take an instant 10-15% hit when the new model comes on next year.

 

See other posting. Obviously, I'm referring to the UK market, not
global, or indeed foreign markets anywhere.

 

He's already half said it in the latest edition of Bike magazine.

My guess is some combination of the following :-

a) too many unsold bikes left over from the last few years.
b) constant and expensive product development and new models every year
causing high costs.
c) currency exchange rate issues
d) interest rate rises discouraging discretionary expenditure on
"luxury" items.
e) general market uncertainty in the run up to a general election.
f) discounting to shift all those unsold bikes in (a) means
manufacturers never get full price for any new bike.
g) far too many models in most market sectors leading to sluggish sales
for those manufacturers who do not have the number 1 seller.

Just my 2p worth.

 

Not really.

Ever thought of a column?

 

You only say that because you can get cheap insurance.

I'd quite happily have a thou, but the insurance is absolutely ludicrous.
So I'm left with the choice between an old hat sports bike (which just so
happens to give me wood) or a softened sports bike (as I have now.)

Or both. But that'd have to be next winter, cos the car's wiped me out
until April-ish.

 

[big snip]

plenty ;-)

 

Nice.

 

Oh. It's got a pretty shitty BHP output though, whatever it is - just a
shade over 100?

 

Ah. With you now. Thought you were talking globally.

I was the lucky recipient of the great crash of the mid 80s, I picked
up an brand new '81 KZ750E2 in '84 for $1750 (MSRP in '81 was $3099).

 

Ben Blaney says...

One with a decent looking headlight would be even better.

 

Oh ****, I've got an interview with them tomorrow...

 

Some changes are reasonable: 170mph isn't a lot of use on a naked bike,
for example. But that's better done with changes to gear ratios.

I think that people do ride naked bikes differently to how they would a
sports bike: sacrificing some top end for improved mid-range might be
worthwhile for a lot of people. But manufacturer's go way too far.
(Although the Z1000 isn't too bad, and Triumph allowed the Speed Triple to
keep a bit of an edge.)