The Motorcycle Index: Are Bike Sales a Sign the Economy Is Revving Up?

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Motorcycle index
For the most part, recent economic news has been filled with doom and gloom. Unemployment remains high, consumer confidence remains low, and unqualified good news is hard to come by. However, one recent indicator provides some cause for optimism: Motorcycle sales have revved up to a roaring recovery, and reached their highest level since before the recession.

Sales at motorcycle and all-terrain vehicle dealers have surged by almost 16% over the past year, surpassing the 15.9% growth rate high they hit in 2004, according to data recently released by Sageworks, a financial information company. During the same period, their profits have also gone up steeply -- from about 0.64% in 2009 to 2.55%, almost a four-fold increase.

While the recession can be blamed for some of the slowdown in the motorcycle market -- in 2009, sales fell by 13.77% -- sales had been falling steadily since 2004. Robb Granado, an analyst with Sageworks, offers several possible reasons for the recent comeback. Part, he argues, can be credited to a snap-back from the recession, when tough times kept people from buying bikes and low sales kept dealers from replenishing inventory. But the post-2010 growth, which is still continuing, is hard to explain.

sales of motorcycles

One clue might be the fact that, while gas costs are dropping, they still remain high. Motorcycles are far more fuel efficient than cars -- even Harley Davidson bikes, notorious for their high gas consumption, get between 44 and 59 miles per gallon on the highway. More efficient brands like Kawasaki and Yamaha often do much better, and commuters looking for cost-effective transportation may find that a new motorcycle can quickly pay for itself.

Another factor, Granado notes, may have been the surprisingly temperate 2012 winter. For many riders, motorcycles are a seasonal option, and often get parked in the garage when the weather gets rough. If last winter was any indication, motorcycle season may be getting longer ... further extending the possible savings on gas.

Regardless of the reasons why, things are looking bright for motorcycle manufacturers: Harley Davidson's stock (HOG) has worked its way out of the hole it fell into in 2009, and the company reported that retail sales grew more than 25% in the last quarter. Other manufacturers have also announced steep sales growth.

Whether the recent motorcycle sales jump is just a summer fling or the start of a period of sustained growth in fuel-efficient vehicles, one thing is certain: For now at least, bike manufacturers are stepping on the gas.


Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at@bruce1971.

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KevinBeair

okay, motorcycles provide cheap transportation, not just on gas, but it's cheaper to buy a bike than a car, if you put 100,000 miles on a car vs a bike, you've lost a lot more money. Also Financing for motorcycles is very very easy to get unlike cars, Harley will loan anyone a bike, even if you have a foreclosure. And ofcourse all of it is bought on credit anyway, consumption is not an economic recovery. There is no recovery, people are just buying cheaper transportation.

July 17 2012 at 7:35 PM Report abuse rate up rate down Reply
AC

"One clue might be the fact that, while gas costs are dropping"

Really, they just went from $3.47 to $3.69 in the past 2 weeks. Bruce Watson at his best - not.

July 16 2012 at 10:56 AM Report abuse rate up rate down Reply
Paul Farber

For some segments of the market, rising motorcycle sales are signaling PROFITS. Let's see....artificial limb makers, ambulance builders, helicopter ambulance rescue services, pulmonary ventilators and other life support systems. Yup! Rising motorcycle sales are signaling a STRONG economy!!

July 16 2012 at 10:45 AM Report abuse rate up rate down Reply
viking9343

If the idiot Eco Idiot Communist Sate of California was smart it would be promoting the use of motorcycles as was to ease traffice and parking congestion in the state. Think for a minute....California is the idea place to encourage motorcycle use, great weatherwith year round riding season, they get great gas mileage and in Europe they love motorcycles.

But no, California hates motorcycles because the greenie eco nazis hate motorcyles. Motorcyles make noise and polution so you can't even register many motorcyles sold in the other 49 states.

California blows.

July 16 2012 at 9:58 AM Report abuse -1 rate up rate down Reply
1 reply to viking9343's comment
edlgowens

I don't know what you're talking about. Motorcyling is very strong in California, largely for the reasons you state: our climate makes riding a year-round option, rather than just seasonal fix like many states. And one added plust to California: it is the only state where it is not illegal to split lanes in traffic, making motorcycles ideal to get around gridlock. Sounds like you're upset about California emissions systems. As the most populated state, California has smog from all the vehicles, and it enacted emissions standards long before the federal government did in order to provide for cleaner air. It's still a challenge (the Central Valley is still the nation's smoggiest region), but it would be far worse if we did nothing. I'm proud to be a biker in a state that does what it can to ensure clean air. I chose to be a Californian, moving away from a truly dirty-air state, and I'm glad to be able to ride year round and split lanes, enjoying the beaches, mountains, and desert landscapes our beauitful Golden State offers. Don't hate...hate is really nothing more than jealousy!

July 16 2012 at 12:58 PM Report abuse +1 rate up rate down Reply
bheckel169

Here we go again. I keep track of HP's articles and in particular this writer always seems to paint a rosey picture of the economy that isn't there. This is a perfect example. Instead of writing the article with a headline like,
"Motorcycle Sales UP...American's Can't afford high gas prices", we've got this guy telling us it must be because things are improving. Really? What planet did he come from?

July 16 2012 at 9:27 AM Report abuse rate up rate down Reply
David

People are buying motorcycles because they can't trust battery cars.

July 16 2012 at 9:09 AM Report abuse rate up rate down Reply
endlessdrip

The new riders of motorcycles haven't a clue how to ride them or be safe on them. I see swarms of bikes with illegial pipes. I see riders who think it's cool not to turn on their headlights. Let's not forget the gangs who display their filthy jackets showing their affiliation with people who are lower than pond scum.
Don't you love the girls on the back who don't have a helmet on?
It's hard to find a person of distinction riding a motorcycle. That's to bad, riding a bike is truly a thrilling experience.

July 16 2012 at 9:04 AM Report abuse rate up rate down Reply
kenatgm

Funny, people keep saying it's the price of gas. I drove my 2012 Chevy Sonic 200 miles on the freeway last weekend and pulled an average 47.6 mpg (EPA eat your heart out)....this seems to compare favorably to the 40-60 mpg people are quoting for bikes. The Sonic isn't huge, but not cramped either and certainly more comfortable than a bike with much greater hauling capacity....so I'm having trouble buying the need to save on gas as a realistic argument.

July 16 2012 at 8:59 AM Report abuse rate up rate down Reply
2 replies to kenatgm's comment
viking9343

You forget that when you need tires you buy 4 and a motorcycle buys 2. Same with oil changes and regular maintinence, most you can do yourself. And besides a Chevy Sonic is ok for a teenage girl going to high school but men ride motorcyles.

July 16 2012 at 10:06 AM Report abuse +1 rate up rate down Reply
KevinBeair

yeah, but bikes are a lot more faster and fun to drive, however thats really good the sonic is getting that great mileage, I was considering one, unti I test drove the camaro, but I cant get a loan for a camaro, so i might look at the new sonics when they come out.

July 17 2012 at 7:38 PM Report abuse rate up rate down Reply
Tom

darn fingers and small fonts

July 16 2012 at 8:49 AM Report abuse rate up rate down Reply
Tom

i need a ike and use to e the gen mgr of the biggest in Dallas,tx anyone selling one real cheap dallastom1@aol.com thanks Tom Stafford

July 16 2012 at 8:47 AM Report abuse rate up rate down Reply