Contrary to common belief, 2020 was not the worst year ever. Sure, the Coronavirus pandemic caused widespread misery, but we managed to avoid a world war. There wasn’t a massive tsunami, or a meteor strike. Even the pandemic, awful as it was, never got to Black Death levels (hopefully it won’t) and we haven’t heard much from those pesky Murder Hornets lately.
Still, the motorcycle industry had good reason to be concerned in the spring, as most dealers were shut down during peak selling season. Yet, the Canadian industry managed to pull off a near-miraculous sales rebound, once everything re-opened.
The Big Picture
The global moto scene saw unprecedented disruption. First Chinese factories shut down, then in Italy, then Germany and Austria, then much of the rest of the world. Even the plants that didn’t shut down saw reduced production. And when bikes were built, the manufacturers had trouble getting them to customers, with international shipping thrown into shambles thanks to the pandemic.
The long-term effects of all this mess are still up in the air, but you can bet there’s a lot of backroom re-calculation going on, and future strategies are being completely overhauled. COVID-19 exposed a lot of weakness in the industry. Hopefully once all of this is behind us the industry will be stronger for it.
And yet, this was still a busy fall, with dozens of new motorcycle models being unveiled virtually. Sure, most of them were simple updates to the Euro5 emissions standard, but even though the EICMA and Intermot shows didn’t run, there many new machines to look forward to for 2021.
The Honda CRF300 line (not yet confirmed for Canada) and Kawasaki’s KLX300 series will likely form the backbone of the dual sport scene. Triumph’s new Trident looks tough to beat as a bang-for-buck middleweight streetbike, another low-price, high-volume segment. The BMW R18 series is going to seriously disrupt the cruiser segment. We’re still waiting for the Harley-Davidson Pan America and the Husqvarna Norden 901, but if those machines debut mid-winter as expected, they’ll join the KTM 890 Adventure in revitalizing the ADV scene.
Canadian Industry Bounce-back
As I’m writing this, I’ve just got my hands on the Motorcycle & Moped Industry Council’s latest sales report, with Canadian sales stats. According to the MMIC, November’s sales continued the trend we saw all summer. Dirt bikes and dual sports sold particularly well, and this November saw every sales category post double-digit increases over the same month in 2019. The “Off Road Recreation” category (trail bikes, etc.) was up 194 per cent. Yes, you read that correctly. That’s very good news, considering November is usually a weak month, when most riders are putting their bikes away, not buying new machines. But, the year-to-date sales numbers are looking very, very healthy for the dirt bike scene. The Off-Road Recreation category is up 61 per cent, Mini Bike category is up 47 per cent, and the Competition category is up 32 percent. Dual Purpose bikes are up 34 per cent.
November’s strong sales weren’t enough to completely restore the whole industry, though. The Street category is down 8.9 per cent in year-to-date sales, and scooters are down 4.8 per cent.
That’s good news, and bad news. The dip in scooter sales isn’t too worrisome, as those aren’t a huge profit sector for Canada’s industry. However, losing high-profit street bike sales will hurt a lot of dealers.
Still, looking at the MMIC’s sales charts, you can see that it should have been way, way worse. Street bike sales basically flat-lined in April. While we got a significant spike in July, sales have generally under-performed all year. No wonder—new riders couldn’t get into training courses in some areas, and many dealers couldn’t get a re-stock after selling what was in their showroom. And with many people facing uncertain financial futures, a $15,000 street bike is a much harder sell than a $7,000 dirt bike. The soaring cost of insurance certainly doesn’t help matters.
What’s Ahead for the Canadian Industry?
There are three big questions for the Canadian industry going forward:
- Will customers return to dealerships in 2021? This is the biggie, numero uno question. Sure, street bike sales dropped, but the off-road sales segment did well. So, will those dirt bike buyers return to buy new machines in 2021, or at least buy tires, filters, oil, etc.? Or, will they put their lightly-used bikes up for sale, and flood the market with used bikes? That could be very bad news for dealers, if it happens.
There are questions about the economy and pricing which will play a big factor here as well. Expect the OEMs to play it cautious going into next season; nobody wants to lose their shirt with showrooms full of unsold bikes.
- What happens to all the Harley-Davidson dealers that lost their franchises? It’s hard to get straight answers as to what’s going on here, but here’s what we know: Harley-Davidson Canada has franchise contracts with its dealers, and those contracts are up at the end of 2020. Harley-Davidson is also in the middle of a massive corporate re-structuring, which includes cutting back on production and reducing its dealer numbers. Now, in the final months of 2020, some Canadian Harley shops are informing their customers they’re no longer official MoCo dealers.
Mark pressed for answers on this in September, but didn’t get much information from Harley-Davidson. Officially, I was told: “Earlier this year Harley-Davidson announced efforts to rewire its global business, including optimizing the dealer network to provide an improved customer experience which integrates the online and in-dealership channels. As part of its dealer network optimization plans, there will be Harley-Davidson dealerships closing in Canada.”
No doubt this means tough times for dealerships that relied on Harley-Davidson motorcycles for income, as H-D is a massive player in Canada’s big-bore motorcycle market, generating plenty of profit through its bikes, as well as parts, accessories, clothing and other retail items. Losing Harley-Davidson will make it hard for some dealerships to stay in business.
- Will we actually be able to ride on the street? At this point, the pandemic is picking up steam in many regions and widespread vaccination seems unlikely until late into next riding season. Judging from 2020, the dirt bike scene won’t suffer too much, but it will be tough for street riders if we have another year of cancelled rallies, and travel restrictions. It’ll be even tougher if there’s a general clampdown on recreational riding, as seen in the UK. Hopefully everything calms down by spring, and infection numbers will allow us to ride on the street, more-or-less like normal.
Some Closing Thoughts
In the past few weeks, I’ve heard from industry insiders all across Canada. There are different opinions on what went right in 2020, what went wrong, and how well we’ve weathered the pandemic so far. However, one thing everyone agrees on is, we mostly dodged a bullet.
Personally, I’ve been very fortunate to get through this year mostly unscathed. I’m thankful for that, and I know not every reader has had the same good fortune. I’m thankful for all of you that kept on reading CMG this year, commenting, sending notes to our team and me personally, as well as supporting the industry. Hopefully, 2021 will allow us to go back to life as usual, somewhat, and I can meet more of you out on the road. Despite all the fun on new motorcycles, meeting the people who ride them has always been one of the best parts of the job, and I’ve missed that in 2020. Next year, I hope that changes. As much as 2020 could have been worth, I think we’ll all be happy to see it in the rearview mirror.