Motorcycle Industry Will Not Fade - From The Editor

The Sky Is Falling-The Sky Is Falling!

It wasn't that long ago when being a biker was not cool at all. Prior to the early '90s, long before Harley-Davidsons caught the eyes and wallets of the Baby Boom generation, motorcycles that originated in Milwaukee-as well as their riders-were looked down upon by many. Maybe it was the stigma attached to that horrific weekend which took place in 1947 in the sleepy California town of Hollister, portrayed in the 1953 film The Wild One, starring Marlon Brando. Maybe it was the fact that Harley-Davidson had recently emerged from the dreaded AMF days. Who knows-it could have even been all the oil spots that owners of panheads and knuckleheads were leaving all over town to mark their territory. Whatever the reason, things were about to change, big-time.

Enter the mid-'90s. A major reversal occurred-all of a sudden everyone and his mother was on a Harley. Sales of the big bikes skyrocketed. It seemed that whatever the Motor Company did was an instant success; H-D could do no wrong. With the numbers of bikes now being sold in the six-figure range, the time was ripe for many aftermarket parts manufacturers to flourish. The influx of new companies was being fanned by the flames of the declining aerospace industry. Machine shops that only months before were making parts for commercial and military aircraft were now using excess machine capabilities to produce high-quality components for the American V-Twin industry. In no time, there were more people producing more parts to modify a Harley than ever before. What was once an industry with limited choices from the aftermarket had suddenly been turned upside-down, producing every part needed to build many styles of complete motorcycles without ever laying a hand on an actual Harley part.

This insane growth continued for much longer than anyone ever expected. The more bikes Harley produced, the more demand there was for them. Motorcycle companies popped up apparently overnight in an attempt to satisfy the appetites of ravenous buyers. Enter cable TV, and the seemingly never-ending series portraying motorcycle builders in all sorts of different scenarios. This only fueled the fire of a public that couldn't seem to keep its wallet in its pants.

Money was being spent like there was no tomorrow. No price was too high to pay for a custom motorcycle. It seemed as if everyone was trying to outdo the next guy. Components and bikes were becoming more and more outrageous, but more importantly, more expensive. If a $45,000 bike sat on a seller's floor for too long, it was not uncommon for a new price of $55,000 to be posted on it, with a buyer just around the corner with cash to spend-that's right, cash!

If you talk to many in the industry today, they will tell you how bad things are. How they aren't making the sales they were a few years ago, how they have had to adjust their pricing in a fluid market. Well, this time period is no different from when the market exploded; it's changing, but for better or worse? That remains to be seen. In reality, what has happened is that Joe Motorcycle Buyer, the guy who couldn't contain his wallet, was actually using his home as an ATM. With the exploding housing market, people were pulling newfound equity out of their homes to pay cash for expensive toys. Money was easy to come by, and the quick run-up in real estate value coupled with historically low interest rates meant super-cheap money for folks to buy whatever it was they wanted.

While the housing bubble hasn't exhibited traits of the Hindenburg just yet, it has certainly lost its momentum, leaving lots of folks without all the spare cash they've been accustomed to.

So what does that mean to you? Good times, because the companies producing motorcycles and components will need to become meaner and leaner as they compete for your dollars. Will the industry fade? Absolutely not! It will become stronger as companies find more efficient ways to produce their products. Will all the companies survive? Most likely not. The weaker companies will cease to exist, while the stronger ones will continue to march forward, bringing even better products to the buying public.Be well.Steve