This week, the United States and the countries of the Eurozone both sustained a new wave of economic crisis, largely as a result of sovereign debt. While these issues are far too large and not the specific domain of this magazine to bear detailed examination here, their effects have very real and deep ramifications on the motorcycle industry and its future as a viable business in North America and...

This week, the United States and the countries of the Eurozone both sustained a new wave of economic crisis, largely as a result of sovereign debt. While these issues are far too large and not the specific domain of this magazine to bear detailed examination here, their effects have very real and deep ramifications on the motorcycle industry and its future as a viable business in North America and Europe. With Wall Street and other key markets dropping in value, consumers will be faced with even greater doubt, a heavier borrowing burden and increased skepticism about their financial security, making discretionary purchases like motorcycles an even dimmer prospect than they are now. In this environment, what chance is there for our much beloved industry?

The motorcycle industry in the developed world has been properly shattered by the recession that began in 2008. Every global manufacturer from the big four Japanese to European legacy brands to one-time financial titan Harley-Davidson has been humbled by the overnight evaporation of sales, swelling of unsold stock and disappearance of easy financing. Several brands failed, most notably Moto Morini and Indian v7.0, while others like Harley-Davidson and Yamaha were forced to radically restructure, selling off assets and permanently eliminating factory capacity.

The past two and half years have seen the return of some growth or at least stemming the bleeding that has drained the industry. But clever statistical manipulation aside, the ugly truth is that the recovery seen in other industrial sectors has simply not materialized on two wheels. Even Chinese OEMs have felt the sting as western markets, a significant growth area for them, dried up and hundreds of tiny resellers (companies that purchased stock Chinese made motorcycles and resold them under their own brands) went belly up over the past 30 months. It is true that many legacies are seeing a renaissance of sorts, as a falling Euro, rising Yen and dealer overstock has led to near price parity between once exotic brands like Ducati, Triumph and their Japanese mainstream rivals, but this slight uptick (for those legacy brands) has only served to dull the losses incurred overall.

They Will Come, Rain or Shine

First, the good news. Motorcycles have two undeniable virtues that help make them such a robust consumer item: economy and emotional appeal. No matter which way you slice it and no matter where you live in continental Europe or most of the lower 48 States in the US, a motorcycle (meaning most powered two wheelers) is a cheap way to travel. Since its invention in the late 1880s, the humble motor bicycle has survived many peaks and valleys in the economic cycle by always reminding us that it is a frugal and efficient means to move one or two persons from point A to point B. Parking is free, fuel consumption modest and maintenance a joke. If you live in a city with congestion charges such as London or in a jurisdiction with downtown vehicle taxes like Toronto, then a motorcycle makes even more financial sense. Compared to running a private car, a motorcycle will always undercut it by an order of magnitude in terms of gross operating cost, which is why even during the darkest times of 2008 and 2009, global motorcycle sales increased by nearly 30 percent.

The second and, for those of us reading enthusiast sites like this one, more compelling reason is that motorcycles will always be more fun than driving a car or taking the bus. Millions upon millions of people worldwide know this and willingly put up with being rained on, riding in colder climates and the increased risk of injury because, in the daily grind to and from work and other life obligations, the motorcycle offers a fantastic and therapeutic escape. It is undeniable. Motorcycles are divisive along cultural lines, some consider them and motorcyclists to be unruly or even anti-social, but a much larger portion of the modern public regard motorcycles as highly desirable fetish objects and part of an aspirational lifestyle that marks a user as a self-confident, empowered individual. It is on this latter role that the motorcycle plays its trump card and elevates it far beyond something as banal as an expensive house or car. It takes much more commitment and skill to earn enough wealth for a Beverly Hills mansion or an Aston Martin than it does a Ducati, but to operate a motorcycle well is to sacrifice personal safety, overcome deep-seeded fears and inhibitions and accept a certain amount of suffering. It is these last qualities, that make owning and operating even a humble scooter or pedestrian commuter bike inspirational.

Squeezing Blood from a Stone

Now the bad news. As I have often commented in this magazine, the perversion of the motorcycle in North America into a luxury good for spoiled adults has been a terrible curse on future growth and remains, still, the single greatest barrier to a healthy industry. Even in Europe, where cheap and cheerful motorcycles and scooters are the order of the day, there has been some drag in the recovery caused by the over marketing of motorcycles as prestige goods, if not outright luxury items. The net result today is that few under 25s in the United States consider buying a motorcycle as compared to 30 years ago. By pushing ever upmarket, the manufacturers guaranteed themselves a profit bonanza at the cost of neglecting to harvest new, younger and more diverse markets.

The last JD Power US Motorcycle Competitive Information Study, issued early last year, surprised no one when it outlined that the average age of a new motorcycle consumer in the US was 49.

Adding to this demographic chasm and the thorough lack of desirable entry-level motorcycles, is the new economic reality of our times. Whereas Baby Boomers spent the better part of their lives enjoying vast amounts of accessible credit and the greatest period of economic prosperity in human history, generations X and Y are living with the now all too familiar cycle of repeated job insecurity followed by bubble growth. While some may consider this a natural evolution of the capitalist economic system, the reality is that it has created a yawning gap between the dwindling middle classes and the rich, who cannot now be depended on to support the bulk buying of the motorcycle industry. The results speak for themselves. Motorcycle sales in Italy, the US and Great Britain (three of the most important western markets) are down and show no sign of recovery. Italy, once a flourishing motorcycle market with annual sales beyond 450,000 units per year (nearly on-par with the US), has been officially labeled “a market in crisis” by ANCMA, the government's motorcycle industry reporting body. Sales of scooters slide by double digits every month despite massive government cash incentives (a kind of cash for clunkers on two wheels). In Britain, sport bikes sales have gotten so poor that retail prices are at their lowest levels in two decades, when prices are corrected for inflation. The reason is simple: no one has the cash and few have the credit to make new vehicle purchases.

Time For a Reboot

We North Americans are can-do people. In the face of impossible odds, we (and, it must be said, our British cousins from whom we likely inherited this characteristic) have repeatedly shown that when our backs are up, we deliver. The motorcycle industry here isn't worth saving in its current form. The idea that 25,000 square foot big box showrooms located off of highways, filled to excess with motorcycles with prices to rival compact cars, are somehow going to be the bread and butter of powered two wheeler sales is science fiction. It was a shaky premise at the best of times and now makes no economic or socio-cultural sense whatsoever. More than three-quarters of us live in dense urban areas, where motorcycles are at their best as transportation. But sadly, North Americans no longer see them as transport. Dealers, those that survive, are rarely in downtown areas or suburbs where people actually live.

Manufacturers too, must abandon the absurd idea that each and every retail outlet must be a brand temple, an expensive single-brand shrine heavy on merchandise and light on customer service and value-oriented motorcycles. For too long in North America and increasingly in Europe, the motorcycle has been peddled as a boutique experience, which is just as intimidating as the grungy, oily old mom-and-pop multi-dealer motorcycle shops used to be. A gentrified, globally-minded and technologically savvy urban consumer does not need a bike shop that feels like an Apple Store, they need a genuine motorcycling environment that eliminates the cult-like aires of the old days, but also isn't so sanitized by marketing gloss that it loses sight of the visceral experience that is buying and owning a motorcycle. Less cappuccino machines, more man-machine interaction.

If the problem is structural, then the cure is nothing less than a re-imagining of the motorcycle product-retail-ownership experience. It sounds daunting. Already many, if not most, industry veterans will be saying that such wide changes are beyond the reach of an industry already on the ropes and without money. But, to do less is to accept inevitable decline and to ignore the powers of a fresh start. In Hollywood, the reboot is a well used tool to reinvigorate a film concept or story franchise that has gone stale. By taking at root what works and throwing the rest out, adapting to new concepts and new paradigms you allow a new and potentially wider audience in to expand your appeal. Of course, it may seem like a silly analogy, considering that the make-believe world of cinema is easier to recreate than the physical, practical manufacture and marketing of machinery, but for either to work in these new times, new technology and new business ideas need to take hold. Modern digital graphics and special effects made the camp and outright childish superhero movies of the ‘70s into a mainstream sensation and cash cows they are today. Digital distribution of those films through online retailers like Netflix and iTunes revolutionized that industry. Similarly, new technology in motorcycle engineering, from the electrification paradigm to the potential of manufacturers embracing common platforms and letting smaller entities design and sell wildly different bikes means that in the future, a Honda purchased in New York might be unique from one purchased in Boston. Just as with the entertainment business, the technology is already there but it is not being explored. We are trapped in the same, conservative evolutionary business model that stated categorically that only vertical twins made good sport bikes in the 1960s or that a Ducati power cruiser cannot be a Ducati.

Show Me The Money

All the planning and speculation in the world won't help if there is no cash to get the ball rolling. According to today's headlines, an even greater scarcity of money is going to be the likely scenario for the immediate future. Fewer sales, more cutbacks in new product development and possibly a few more brand failures are in the cards and that may make it seem truly hopeless. But it isn't. Remember what happened in postwar Europe? The motorcycle industry flourished when we were shown just how exceptional a device the motorcycle is at the very worst of times. No other industrial good has engendered such feeling, so many stories and long lived affection between a human and an inanimate object as the motorcycle. Grown men have whooped with joy and cried in equal measure behind handlebars or when telling tales of them. Myths and legends of titanic scale, from events like the Isle of Man TT to the romantic dream of cruising on a Vespa a la Roman Holiday have motivated more to try out motorcycling than any Madison Avenue ad campaign ever could. In short, the motorcycle delivers human emotional satisfaction on an epic scale, in addition to practical transportation at a bargain price. When times are tough, smart people look for synergies like this to satisfy their needs on a budget.

But it is time for us to deliver. As an industry, we must rehabilitate ourselves from past addictions to superfluous excess and get fun, sexy and affordable product to the new urban and increasingly non-traditional market as soon as possible. It will likely be some small start up, perhaps in the burgeoning alternative energy arena, that first shows the way forward. Perhaps one of the Japanese will again demonstrate the same penchant for paradigm shifting thinking that broke down and rebuilt the industry in the ‘70s and ‘80s. Whomever it is, we have a shrinking window of opportunity. The western consumer is deeply jaded and, if he isn't catered to soon, then he isn't likely to be around when the money starts flowing again.

Michael Uhlarik runs Amarok Consultants and designed the Amarok P1.