Industry Sales Of Motorcycles example essay topic

The purpose of this industry analysis is to develop understanding for Harley Davidson Inc. and the employee owned manufacturer of heavyweight motorcycles. We will focus on some of the distributing of products to domestic and international markets targeting men and women of all ages. The motorcycle industry is made up of five major manufacturers: four Japanese (Honda, Yamaha, Kawasaki, Suzuki), one American (Harley Davidson) and some European companies (mainly BMW of Germany and some other Italian companies). Most companies market their motorcycles and accessories on a worldwide basis. Industry sales of motorcycles were shrinking in the early l 990's because of the recession. Three types of products / services are being offered motorcycles, accessories, and financing services.

Motorcycles: This is a loose term for some, however we are going to look at that would include motorcycles. Mopeds or scooters (with engines under 125 cc which are used as an alternative to walking), accounting for about 17% of total motorcycle sales; lightweight motorcycles road bikes, dirt bikes, dual purpose bikes (with engines ranging from 125 cc to 499 cc), accounting for 51% of sales; sport motorcycles street bikes, and super bikes (with engines ranging from 450 to 749 cc) accounting for 13% of sales; heavyweight motorcycles cruisers, touring bikes (ranging from 750 cc to 1500 cc) accounting for 19% of sales. Accessories: all leading manufacturers produce Aftermarket accessories, such as saddlebags, windshields, custom seats, helmets, and clothing items. Accessories can bring in a large amount of profit but they can also strengthen customer relations and customer loyalty. In order to succeed companies need to do a market analysis of what sales and what the customer base requests.

Sales of accessories and parts make up 36% of total retail sales and are a viable area for producers to explore because people want something to differentiate their bikes. In the past, motorcycles were viewed as a cheap means of transportation. By 1992, they came to be viewed as a recreational, or a luxury item. This new perception of motorcycles led to the introduction of more expensive models with higher prices.

This led to the introduction of consumer financing, one of the fastest growing service areas in the motorcycle industry. Financing Services: As motorcycle prices increase to above the cost some can afford out of pocket. Many customers are finding a need for financing within the dealership of the motorcycle company. Financing terms and payment arrangements are necessary to succeed and be competitive. The customers of motorcycles can be divided into two categories men and women. Men: A. Men under 30.

This group accounts for 44% of all sales. Therefore, a great opportunity exists here because of the group's size. This group's members buy motorcycles for their transportation and recreation needs. Men in this group buy more of mopeds, scooters and entry-level lightweight road bikes. B. Men between 30 and 50.

This age group makes up 45,000 of buyers another large area providing opportunities for firms. The motorcycles most frequently purchased are the heavyweight touring bikes and cruisers. Many buyers are married couples looking for an alternative to taking the car out for weekend drives to the country. C. Men over 50. This group accounts for about 11% of motorcycle sales. The heavyweight touring class and the middleweight road bike categories account for most of the sales here. Women.

This group is a segment that is growing at a fast rate, thereby representing an opportunity area. Firms to be successful here are to provide smaller, easier to handle, comfortable, and good quality bikes to build up brand loyalty. As the years went on new models were produced and during the fifties women began taking more active roles in motorcycling following examples set a decade before by the Motor Maids. This popular group of women riders, which was supported by the American Motorcycle Association (AMA), demonstrated women didn't need to be only passengers. New models of bikes were made to suit the desires and needs of women riders. The bike's engine size and metallic structure was configured specifically to fit women.

Although motorcycles are sold internationally, 3 main geographic markets comprise the bulk of motorcycle sales North America, Asia, and Europe. The largest is the North American Market (USA and Canada account for about 60% of this market) accounting for 60% of worldwide motorcycle sales. With the baby generation aging, opportunities exist for the penetration of new markets. The Japanese market accounting for a great chunk of the Asian Market is an untapped one for foreign manufacturers. Government regulations and trade policies make it difficult for foreign manufacturers to enter though.

Most Asians consider motorcycles as a basic means of transportation. Major target areas include China, Korea, Taiwan and Vietnam. The European Market is another market with great potentials since Europeans have a higher disposable income and enjoy a higher standard of living. Eastern Europe is not offering a good deal mainly because of its unstable political and economic environment. To succeed in these markets, firms are to modify products to meet local needs, provide after sales service, expand distribution networks, create strongcustomerCompetition in the motorcycle industry consists of only a handful of producers worldwide. The Japanese producers; Honda, Yamaha, Kawasaki, and Suzuki are producing a full line of motorcycles ranging from scooters to heavyweights, and together control the largest share of the market.

Their wide product line though has also created some customer complaints to them (especially true for Honda and Kawasaki) for low quality service. This significantly decreased their market shares. Japanese companies' began with copying other products, but evolved to depend on innovative designs and technology. Harley Davidson is producing heavyweight motorcycles emphasizing good quality product and after sales service, thereby building up brand loyalty. Honda is the largest company in terms of size, financial backing, and reputation. It is offering the widest selection of styles, classes and sizes within the heavyweight category.

This wide product line hurts Honda since salespeople have limited knowledge of each product. Kawasaki's products include a full line of motorcycles, all terrain vehicles, jet skis and other. It is the leader in super bike manufacturing but US legislation is limiting the number of sports bikes to be imported because of safety reasons. Yamaha produces Harley clones but lacks Harley's image. Being a market follower, Yamaha is to face many problems. BMW is famous of producing quality products but its high prices hold it from expanding sales.

BMW has a low resell value as well. Some have said that motorcycles are a mechanized version of a horse being that they were first created in the early 1900's. Harley Davidson, a family run business for over 65 years, produced one of the first American made motorcycles. Harley still remains the key focus of motorcycles enthusiasts and manufacturers today.

Reference Citations: Klein, Daniel (1984) Taking America for a Ride: The Politics of Motorcycle Tariffs. Retrieved January 25, 2005, from web Doug (2001) 100 years of Magnificent Machines: The Motorcycle Chronicles Lincolnwood, Illinois: Publications International, Ltd. La Monica, Paul (2005) Hog Heaven? Is it to late to hope on board for a ride?

Retrieved January 23, 2005, from web Davidson Company (2005) The History Timeline of Harley Davidson Retrieved January 25, 2005, from web Chris (2005) USA TODAY: Motorcycle sales rev up to top 1 million. Retrieved February 13, 2005, from web.