Could this summer’s high gas prices jumpstart motorcycle sales?

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By

hope

Average gas prices are expected to top $5 a gallon this summer, around a $2 increase from their current level. That price exceeds June, 2008’s record $4.12 average. Back then, pre-Financiapocalypse, that expensive gasoline caused scooter sales to spike 66 percent and temporarily propped up flagging motorcycle sales. Could even higher prices bring about a similar renaissance in sales this year, when they’re most needed?

According to NPR, that price increase can be explained by a domestic demand for gas that’s returned to pre-recession levels, while demand from China and other Asian countries has exceeded 2007 and 2008 levels. Former Shell Oil president John Hoffman also blames President Obama’s ban on the expansion of off-shore drilling.

“There’s a psychology of oil pricing based on fear — fear of shortage, fear of lack of supply,” Hoffman told NPR. The oil industry advocate went on to say that while alternative energy vehicles are the future, short term oil requirements are still severe. “We really have no choice — with the 250 million cars on the road today — but to put gasoline and diesel into those cars.”

Back in the summer of 2008 everyone thought the economy was rosy and the motorcycle industry was patting itself on the back for reversing a slow decline in sales that began in 2005. Shocked by full tanks that frequently topped $100, many car drivers were finally listening to reason and purchasing cheap scooters for commuting and other local journeys. Anecdotal evidence from dealers suggested that the high gas prices were giving people who’d always wanted to own a bike a justifiable reason for purchasing one.

Most motorcycles average 30-70mpg, while scooters can frequently approach 100mpg or more. Motorcycle sales in the US fell from 879,910 in 2008 to 520,502 in 2009, a 40.8 percent loss. Full-year statistics aren’t in yet for 2010, but it should be an equally grim year, sales were down a further 18 percent through Q3 when compared to 2009.

So, with gas prices expected to peak at even higher levels this summer, is it logical to assume that scooter and motorcycle sales could benefit? Yes, but the price of gas isn’t the only variable in the market and the world is a vastly different place now than it was before the Fall of 2008.

The recession is officially over, but unemployment remains at 9.1 percent, up from 5.7 percent in June of 2008 when gas prices were last so high. As a result, consumer confidence remains relatively low. Credit is also less freely available. Put the two together, and purchasing an additional vehicle, especially a brand-new one is less appealing.

Motorcycles and scooters now face more competition from increasingly fuel efficient cars too. New models like the Chevy Volt promise all-electric operation for short journeys and an EPA average fuel economy rating of 60mpg. Established players like the Toyota Prius are also more fuel efficient. Where the 2008 Prius was EPA rated at 46mpg average, the 2010 model achieves 50mpg. Hyrbid powertrains are now commonly available in vehicles ranging from economy hatchbacks to luxury SUVs. With motorcycles widely perceived in the US as a leisure or luxury item, the availability of more efficient cars will make it harder to justify a two-wheeled purchase.  The justification people who’ve always wanted to own a bike were given in 2008 to finally make that purchase isn’t so powerful in 2011.

Having said that, the mix of motorcycles available in the US has also changed since 2008. The Ninja 250 was revised that year, bringing it up to at least 1988 levels of fit and finish and Honda just rolled out the CBR250R. Kawasaki lists the littlest Ninja as achieving 61mpg average and, while Honda bizarrely isn’t listing an official fuel economy number for the WeeBR, it should be in the same range. That’s two appealing, affordable, fuel efficient models from major manufacturers, new players like Cleveland CycleWerks are also becoming larger players in the marketplace too.

Of course, there’s also new scooters. The Yamaha TMAX is fast, comfortable and practical enough to travel cross country and it achieves 47mpg from its 500cc engine. The new Honda PCX 125 can carry two passengers, reach 60mph and returns 110mpg. Piaggio plans to import the 117.6mpg MP3 Hybrid 300 late this year. In Europe, that model’s been very successful at converting car drivers to two wheels.

The new products in the market that stand to benefit the most from high gas prices aren’t available from major manufacturers. Where current riders look at the $9,995 before-tax-breaks price of the Brammo Empulse 6.0 and imagine all the year-old 1,000cc superbikes they could buy for that money, $10k is pocket change to someone who currently commutes through LA in a 16mpg luxury SUV. Car drivers perceive the cost differently, giving electric bikes an advantage among those customers. Brammo expects to have the Empulse on the market early this summer, it’ll join less speedy no-gas bikes like the Brammo Enertia Plus, Zero S and Zero DS.

Problems arise when you factor in the virtually non-existent marketing of all the above. Where literally every man, woman and child in the entire country is intimately familiar with the Chevy Volt at this point, many remain totally unaware that practical, fast all-electric motorcycles exist at all. Large motorcycle manufacturers haven’t traditionally marketed their products on fuel economy. While Kawasaki has an MPG minisite, it receives virtually no promotion and Honda doesn’t list fuel economy numbers for bikes like the CBR250R or PCX 125 at all. We had to trawl Google to find the fuel economy numbers we listed above; not something the average consumer will be doing while lamenting the size of their fuel bill.

All that leads us to conclude that yes, there is an opportunity for motorcycle makers to start selling bikes again, but, unless they significantly alter the way they market those motorcycles, this opportunity could pass them by. We urge manufacturers not only to include fuel economy figures in their marketing, put to make pushing MPG — along with overall cost of ownership — a core part of their message, if not their main message.

America will inevitably be inundated by media reports on high fuel prices in the run up to and during this summer. Here’s hoping the message that motorcycles offer a practical, fun, affordable, fuel efficient transportation alternative can be a part of that media frenzy. More people riding motorcycles for the right reasons? That’s change we can believe in.

  • http://www.thisblueheaven.com Mark D

    “The new Honda PCX 125 can carry two passengers, reach 60mph and returns 110mpg.”

    Wow. Its not ugly, either.

    Honda, how the hell did you make me want a scooter?!

  • Kevin

    I do love bragging to my cager friends that my average MPG nearly doubles theirs. With prices rising, this argument becomes more and more relevant. I’ve already convinced one friend to take scooter lessons and ride to work based on this argument alone.

  • jeb

    i would love to see a 5 dollar gallon of gas.
    it would be good for us.

    • http://www.thisblueheaven.com Mark D

      Agreed, but I’d rather it get there via taxes.

      Then at least the money can go back into fixing potholes, instead of lining oil-exec pockets.

      Oh well, I suppose that’s not exactly how, you know, economics works.

      • Core

        I’d rather see a more direct way of funding roads. Like tolls. Then at least we know the money would go toward the road. But it would be those EZ pass type things, that way you could just keep on trucking.

        I wish I could recall exactly, but I was watching someone talk about taxes, and how much money gets burned up in bureaucracy before it even actually gets used.

    • ike6116

      I understand the sentiment but I mean I cannot agree with this. Europeans love to thumb their nose at the US however it is simply nearly impossible to live an adult life without an automobile. And with the middle class / working poor being squeezed tighter and tighter with inflation going up and wages staying stagnant I don’t like the idea of getting to our ideal endpoint by standing on the backs of the bruised.

      • Deltablues

        Living in the mostly rural State of Arkansas, I totally agree with your sentiment ike6116. Higher gas prices would help scooter/motorcycle sales in some parts of the country, but where I live $5/gallon gas would put an incredible burden on my friends who work low wage jobs. At $5/gallon, my Mini Cooper would take $65 per fill-up. My Daytona 675 would take almost $25 per fill-up.

    • Core

      You… obviously have no clue how that would affect everything in our everyday life… unless you know, you don’t work, don’t pay bills and live with your parents, or are just rich?. Their are two things that make this world turn round. Electricity, and fuel.

      Fuel is how you get all of your goods delivered to the store, supplies to hospitals, every freaking thing really… If fuel prices go up, then its going to cause a domino effect. Everything else will go up as well. While it might not be a major rise in unison/cost per item. Over all its going to be a nickle and diming to death type of situation.

      I dread it personally…

  • Frosty_spl

    Guess it’s time to sell my M3 and get a mini CBR. It will pull more chicks anyway.

  • Cheese302

    come on KTM Duke 250 or 300 or whichever.

  • wwalkersd

    To take advantage of mileage, the gain has to be significant enough to offset the additional hassles of riding a bike (gear, lack of A/C, limited carrying capacity). As has been said here many times, we need appealing smaller bikes. My wife’s Prius gets the same mileage as my R1150RT or DL1000, but a set of tires for the car costs less than two sets for the bike and lasts five to ten times as long.

    I think the real challenge is to come up with a bike that’s both practical AND sexy.

    Electric bikes make sense for short commutes, but not for recreational use. I took a fairly short ride last Sunday… 130 miles. The electrics don’t have that kind of range yet. A gas bike can do both.

  • Shaun

    You guys should count yourselves lucky, gas here in the UK is now £1.27 per litre! Ouch!

    • Ilya

      Exactly. And motorcycle sales are still going down in Europe. For example, Italian market lost 20% or so in 2010, if I remember correctly. High gas prices won’t turn US motorcycle sales up, even if manufacturers would push MPG message as Wes suggest.

      • robotribe

        EXACTLY. High gas prices might motivate someone to find more fuel consumption-friendly alternatives, but people’s wallets and appetite for or availability to credit are the more common motivators for U.S. power sports sales.

  • Turf

    summer 2008 I worked in a bike shop, the running joke was who could sell the most scooter simply by asking the people who walked in the door what color by pointing to one of the vespas. We ran out of stock 3 times and had to call piaggo to get all the scratch and dings we could lay our hands on.

    • Ilya

      Go back to this shop, and ask what happened to them in 2009 – 2010 … if this shop is still around.

  • 2ndderivative

    The kill-or-be-killed mentality that leads people to drive giant SUVs for “safety” will prevent a significant proportion of the population from even considering two-wheeled transport.

    From the other angle, for me the advantage of a bike for commuting has little to do with fuel economy, and more to do with maneuverability and access to free parking (in my city at least).

  • http://michael.uhlarik@amarokconsultants.com michael uhlarik

    It is my sincere dream that the North American audience discover what the rest of the world has known for decades :

    The scooter is an excellent transportation tool. And thanks to good design and engineering, scooters can now be had that are fast, handle very well, have range and comfort and are even cool and attractive.

    If the world made any sense every New Yorker, Torontonian and Angelino would replace some of their yearly commuting with a 250cc plus maxi scooter.

    • http://plugbike.com/ skadamo

      Maxi scooters are so practical and probably fun to ride like their little cousins. Wes, Grant, I dare you to make them cool. Everyone would be on 2 wheels.

    • Devin

      I just Googled maxi scooters. Two helmet storage capacity and they “sit” upright when parked, so you can park them in super small spaces. Pretty cool.

  • jonoabq

    Manufacturing needs to figure out how to make more motorbikes with hard luggage options to make them more practical as commuters for many people. From a marketing position the culture of fear seems to trump practicality, many people believing that if they get on a bike in traffic they will certainly die or be maimed in a week. Tell them they can often park in the front row of any parking lot…now there’s the hook.

  • Ilya

    The best hard luggage option ever invented is a sidecar

    • seanslides

      Ever tried lane splitting in a sidecar?

      • Ilya

        Ever tried to advertise motorcycling by using “Split the Lane!” slogan?

  • Tim

    Scooters and cycles ARE awesome to commute on. Unless you are like a huge number of us and live where we have an actual WINTER as in snow, ice, wind chills below zero blah blah blah. $5 per gal gas will hurt a lot of folks.

  • Corey

    Well hopefully TOO many two wheeled vehicles aren’t snapped up by americans on a gas budget. Our highways are already scary enough as is. I cannot imagine how ugly things would get with a flood of new riders all hitting the road at one time, sheer carnage comes to mind.

    • Tony

      Luckily some states require rider training, as Oregon has started doing. I’m in an age bracket that isn’t grandfathered in, so when I do start my two-wheeled career it will be done right.

  • Padraic

    First, thank you for starting this discussion. We all know that the past two years have given us all a false hope of stability. We all should be thinking of alternative ways of commuting. Anything from motorcycles/scooters to mass transit, to bicycling, to car-pooling; from Vietnam to the streets of Rome, this way of life is something that people all around the world have had to deal with from day one. It can’t hurt Americans to start thinking a little more frugal and maybe think of motorcycles as more than just recreational playthings.

  • Michael

    I’d be plenty happy paying 5$ / gallon. Here it’s close to 8$ per gallon. And I live in an oil producing country.

  • http://www.ClevelandCycleWerks.com scottydigital

    My opinion is:

    People who jump on the fad of buying a scooter because gas prices are too high, do not have the sustaining power (MOJO) of someone who actually wants to rice. Then the product sits and gathers dust in the garage, with the investment never truly paying itself off in savings. I have seen this same scenario played out over the course of 2 years.

    I love the fact that this will truly bring new people to riding, I only hope it can attract them and get them to stay riding, even after that “new scoot” feeling wears off.

    Also, higher gas prices are never a good thing. all other costs also go up, it generally hurts everyone, except those betting on oil futures.

    • http://hellforleathermagazine.com Wes Siler

      Most people aren’t going to make the switch totally for the savings. Usually, it’s because they’ve always wanted to ride or used to or whatever and this finally gives them the excuse.

  • Nigel

    Last year I parked my suv on Feb 1 as of Jan this year between insurance and gas I’ve payed for my Honda Ruckus which runs me about 6$ a month in gas. I find more money in my couch cushions :)
    Now want a 250 to get on the highway, but that’ll double my gas spending:(

    • http://www.ClevelandCycleWerks.com scottydigital

      Cleveland CycleWerks bikes get nearly 100 miles per gallon, if you are a hoon…55-65mpg

      • ike6116

        what the christ is a hoon?

        • Bronson

          Probalby means “riding like a hooligan”

          • http://www.brammofan.com Brammofan

            That’s about right, Bronson: hoon

  • Core

    “The recession is officially over”

    Really? Whoever “officially” announced this, needs a stick shoved up there ass, and their brain tickled, so it starts working correctly again.

    I believe their is an old saying that goes something like, ‘don’t always count on things, that can only be counted’ or something like that..

    If my hours at work get cut anymore, I am not going to have a job. My friend is in the same boat. I work in retail, he works in the food industry… sales are in the sewers.

    I guess as long as you have the proper title, you can feed out lies and people will just gobble it up.

    Anyways, besides that small rant… Great article. If motorcycle companies started banking on the fuel efficiency of motorcycles, indeed that could probably or would probably boost sales. In which turn, the auto industry would start a counter comparison of how safe four wheelers are vs motorcycles.