Each year between October and November, the EICMA motorcycle show takes place in Milan, Italy. It is the literal start and end date of the industry calendar. Other trade shows exist, and in earlier times when EICMA was only held once every two years, Germany’s INTERMOT carried the same weight. More, in fact. But since about 2007 it has been clear that EICMA, with its glittering new convention centre, glamorous host city and plethora of historic domestic brand names has become the lode star of the international motorcycle industry. If it exists on two wheels and has any pretence of importance to the market, then it is to be found at EICMA.
In North America motorcycle shows are used mostly as entertainment and retail opportunities for local dealers and merchants, with OEM support ranging from serious to whatever. The large event corporations that run them make efforts to attract the major brands, but the reality of our continent’s scale and the costs involved with setting up official brand exhibits that can be as large as 10,000 square feet, in ten major US and Canadian cities make that difficult. The real problem with shows on our shores, of course, is the relatively puny size of our market and its lack of growth. The world’s motorcycle industry isn’t all that interested in funding all those shows in a shrinking market where one manufacturer owns 50%.
Other great trade shows in what were once thriving markets are struggling too. The British national motorcycle event at the NEC in Birmingham has degenerated into a garage sale for new old stock helmets, the Paris Salon des Deux Roues is essentially a regional distributor gig and even the once mighty INTERMOT is fast becoming a venue for unknown far eastern brands making a European debut, although the Japanese continue to use it for their few new model launches. EICMA stands head and shoulders above these, attracting every major global brand and many of the rest. It is a professional trade show that provides face to face time for suppliers of parts, apparel, services and motorcycles from all corners of the world, large and small.
I get a little giddy when EICMA approaches. Forget Christmas, the Milan motorcycle show is the best thing to look forward to when you make your living and get a lot of your pleasure from motorcycles. The show grenades us with two wheeled fantasy and reality, new and renewed bikes bathed in a halogen glow and draped with feminine excess. Walking the many vast halls of EICMA requires fuel, comfortable shoes and eyes open to surprises. The mainstream magazines report on the obvious things, such as concept bikes or the latest Italian sports model. But the real gold is often in the back, small ten by ten stalls where some artisan has crafted a one of a kind motorcycle, or the headlamp supplier you never heard of that has developed a line of LED headlights that set a designers mind racing.
This years EICMA is over, and HFL and other outlets have gone to good lengths to present the major debuts from the known manufacturers. The news has revealed a bunch of expected new motorcycles from MV, Ducati and Bimota. Honda and KTM similarly delighted audiences with exciting motorcycles for the everyman. But what has not been reported is the absence of new concepts, the weakness of the exotica from the legacy brands, and the total absence of new hardware from three of the world’s largest manufacturers. The aftermath of EICMA should leave everyone asking one question: what is going on?
2012 – The end is neigh
It is not news, or even particularly interesting to write the usual pessimist pablum about how the west is in decline or that our motorcycle markets are no longer the main drivers of the industry. What is newsworthy and really ought to raise eyebrows is the near total indifference that Yamaha, Kawasaki and Suzuki have shown the western consumer via EICMA, particularly this year. Anyone that knows these brands or has worked with them can understand their corporate business models germinate from a global perspective. Its looking up close that makes for a depressing reading of the tea leaves.
Suzuki is in dire straights, a corporation bleeding money after a disastrous venture with VW in south-east Asia and is in full blown damage control. The lynch pin of that company is continued dominance in the Vietnamese market (don’t laugh, Vietnam is the world’s 4th largest, and one where they make serious dough), in Malasia and joint-ventures in India. The brand that gave the world the GSX-R and Katana is just not in a position to think to much about whether young squids in the Midlands or Miami are happy with their latest crotch rocket. GSR naked bikes and Burgman maxi scooter sales in Mediterranean Europe are what they are counting, so that’s them out of the western picture.
If Suzuki is in damage control mode, what Yamaha is doing can only be described as a reversing polarity. The tuning fork company has handled its restructuring well, shuttered a lot of deadbeat factories (and a few unfortunate good ones – I’m thinking of you, Barcelona), streamlined production and gotten near profitability. Good. But it appears that they have put all of theirs eggs in the Indonesian and Indian baskets, developing new models for them fast and promoting there with unparalleled ad buy. The fact that Yamaha shut down nearly all of the global racing program then paid for its MotoGP effort without sponsors indicated how much importance they are placing on promoting the brand. No Marlboro-Yamaha or Fiat-Yamaha of old. This is Yamaha. Blue and white and black and Semakin di dipan. “On the front.” The aggressive branding attitude seems to be banking on winning the hearts of the 20 somethings in south east Asia with products and victories in the hope of establishing itself as the go-to motorcycle source for prestige, performance and value. The west can content itself with new colours on 5 year old R-series models and one tepid “concept” model, a mildly retouched XJR1300 (itself an old nail). Just a few short years ago Yamaha’s design branch GK would present a new concept model for every show, and release an all-new R-Series each alternating year. Those were the days. You’ll get your re-skinned FJR and like it!
Kawasaki comes out of EICMA looking a little less anaemic. Unlike the other three mentioned above, Kawa used INTERMOT a month ago to unveil genuinely new motorcycles and graced EICMA with a decent concept bike, the only one from a Japanese brand. Pretty, neat and original, the retro-future Z1000 offered a little spark of life to the smallest of the big four. Sadly, it was not a factory effort, but kudos to them for at least commissioning a special. Make no mistake, Kawasaki Heavy Industries is on the same track as the others, going great guns in Indonesia, Vietnam, Thailand and making inroads into India. But they seem to still have us close to heart. In Europe, the Z750 has been a top seller in Italy and Spain for years, among high displacement motorcycles, while the broad 650cc family and 250 Ninja have been strong sellers over here as well. The littlest Ninja in fact, deserves more credit than it is generally given. It was the success of the restyled model in 2008, the one often panned by motorcycle journalists as underwhelming, that not only lead the way for renewed street bike sales in the US (beating out every single sport / standard motorcycle on the market by a wide margin) but also inspired Honda Canada to import the CBR125, an experiment that eventually gave North Americans access to the seminal CBR250R.
Other than Honda, the Japanese came to EICMA with mostly old machinery dressed in new colours. It was not a great showing, and confirmed to industry observers what the numbers and financial papers have been reporting since 2009: the polarity has definitively shifted and there simply aren’t enough resources to feed the west with the new hardware it is accustomed to. We will have to make do with existing models a little longer, and probably even in the future expect fewer and less frequent front line model replacements. Personally, I don’t think this is a bad thing. European legacy brands are given no grief for peddling premiere models in their line ups for four, five, sometimes ten years or more. BMW features premium motorcycles in the line up that have had no significant change since 2005 (K1300R, as one example). Dressing up an ageing Benelli Tornado with some new forged triple clamps or repainting an ancient MV or (pre-2007) Ducati Monster in some “limited series” special edition has been standard operating procedure for ever, irrespective of any real product improvement. But if a breathtaking work of engineering like a CBR1000RR isn’t completely redesigned inside of three years is it branded “old”, “obsolete” or more ludicrously “irrelevant” by media. It is amusing to note that the very Japanese machines most often derided for lacking novelty almost always sell the best. Think CBR600F, or T-Max, both copied shamelessly by everyone (including the Europeans) but never dethroned in the marketplace.
Italy – Austerity? What Austerity?
The country may be facing financial ruin, but the grist that feeds Italy’s motorcycle mill is, for lack of a better word, passion. That over-used cliche is true when it comes to most Italian brands’ product planning decisions, with a couple of notable exceptions. While executives at the Piaggio Group of companies coldly analyze sales statistics and prepare complex industrial strategies, and the ever changing owners of Ducati plot the latest restructuring, Moto Morini, Malagutti, MV, Italjet and the rest of the B list brands just unleash design like a coiled spring, shooting wild concepts in all directions, or no direction, hoping to hit on something that resonates with the crowd. It is an exciting, raw, thoroughly human act, but from a business point of view horribly risky.
Nowhere was this more evident at EICMA than at Bimota. The boutique brand from the principality of San Marino (a kind of country within a country with loose tax law) went mad, boasting a booth three or four times their usual size and with five new models! It is a crazy Ivan move for small brand that manufactures perhaps 2000 motorcycles a year, and a bold risk. Producing alternative spec or fairings based on one principle design, the traditional path Bimota have taken, it a realistic way to offer different products within the incredibly constrained resources of a small company. To produce a handful of one-off machines for a show, just to provoke, is also a clever and cost effective marketing plan. But Bimota didn’t do this. They presented different bikes and declared them to be forthcoming production models, coming soon to a Bimota retailer near you. Everyone I spoke to about this came away with the same suspicious feeling: a pump-and-dump is coming.
Speculation: Ducati, Italy’s most loved brand unloved by money, was recently sold at a fantastic profit (for the first time in almost 20 years), a prospect that must have had investors salivating. Bimota’s current owners saw in their brand arguably more exclusivity than even Ducati has, and decided to pull a Lotus. To those not familiar with the car business, let me explain. Lotus cars hired an ex Ferrari marketing executive who promised to build the famous British brand into a major player of the luxury car market. Under his leadership the tiny company leveraged its resources to the hilt, presented a flotilla of concept cars and announced that it was going to deliver them into customer hands within a couple of years. The owners would triple their investment in short order, all they needed was to get deposits on those fabulous show car concepts, and ramp up the production plan. It didn’t work. The money ran out before they could engineer anything road worthy, the loans were called in and now Lotus is gone. Probably forever.
I really, really hope I am wrong. I really, really hope that Bimota’s leadership actually planned on this for years and have the budget to develop the lovely BB2 and DB11,12 and whatever, with quality and conviction. Its just that, well, Italian brands with names not beginning with “A” or “P” have a long history of not meeting deadlines, or delivering what can only be described as Beta test models to market. Moto Morini, recently out of bankruptcy protection, flattered itself with press releases and announcements for this year’s EICMA only to show up with more of the same old thing. Morini’s chances of seeing the end of 2013 are 50/50 at best. Benelli, another casualty of mismanagement is today nothing more than a shell brand, a vessel for marketing Chinese made products into Europe. I fully expect the product quality to eventually surpass Italian Benelli levels (which isn’t saying much), but there will be precious little life left of the brand by then.
If Bimota has jumped the shark, then they may be circling close to MV. The Rivale is stunning, in the literal sense of the word. It arrests the viewer, searing optical synapses with feelings of either love or hate. A good thing indeed for a tiny luxury motorcycle manufacturer. However, the lingering delays with full production of the F3 and its naked Brutale twin feed unpleasant rumours about the financial viability of the enterprise. Journalists I spoke with reported finish quality irregularities, a tell tale sign of rushed or incomplete R&D. For any company cash flow is the most important thing, and for a motorcycle company that means getting out there and selling hardware. Recent history indicates that Italian boutique brands are not terribly good at delivering complete products before they are ready, which doesn’t bode well for MV. The Rivale had better be good and available, soon.
The Other Italy
You won’t have to look at the new Caponord while you’re riding it. Based on the Dorsoduro 1200, it should be fast, fun and, thanks to that big fairing, huge tank and new seat unit, it should be all-day comfortable too.
Piaggo Group nailed it this year. That Aprilia had a great stand is not news. That the Caponord was received with a yawn or that the Scarabeo is ugly surprises no one. Equally unsurprising though, are the impressive spec sheets on them both and the Japanese finish levels. Aprilia makes superior products, even if they are the “coldest” Italian brand. Their scooter offerings, largely ignored by northern Europeans and North Americans, are exceptional in function and design, even if they are often re-skinned versions of Piaggio branded products. The motorcycles are the best in Europe, save for Triumphs, and certain BMW models (some of which they helped engineer). It is a great pity that more people don’t rally behind this brand. With over 40 genuine world championships under their belt, all of which in direct and unbiased competition with the Japanese big four, globally significant production figures and having had the audacity to actually make money throughout most of their history, they make that other Italian sports motorcycle brand look kind of flaccid.
Piaggio itself hit it out of the park with the new Vespa. After decades of milking a great name for all its worth, churning out one wet cardboard iteration of the worlds motorcycle icon after another, the latest concept is a design tour de force. Beautiful in a genuinely feminine way without being cutesy or contrived, it is simultaneously elegant and approachable, a trick that only the classic Vespa models have been able to do. Besides that, and some modest changes to plebian transport products like the Beverly and X10, it is clear from trade reports that Piaggio, like the big four, is concentrating on south-east Asia. Factories are springing up in Indonesia and Indian plants are expanding. Expect small Aprilias to be sourced from the sub continent within a couple of years, and priced accordingly. For once, not being wrapped in the Italian flag may be an asset, because a hot looking and affordable future RS250 will not lose any appeal with the words Made in India stamped into it.
Under New Management
Which brings us to Ducati. Now under German control, the tectonic shifts that have plagued the storied Bolognese brand might have ceased for good. In the last six months, the company has been sold, management is being reshuffled and they lost Valentino Rossi which, no matter what your opinion of the man, is a public relations disaster. Yamaha’s stock went up the moment he got off the Desmoseidici in Valencia this month, even if he is still under contract until the end of the year. But never mind, because Ducati is on a product roll it has not enjoyed before in it existence.
Top marks must go to the leadership at Investindustrial, the former owners. Unlike the owners that misguided the company in the past, they did as their name suggests and invested in industrial development, gestating the finest line up of motorcycles in Ducati’s history. From the updated Monster to the market expanding Diavel to the utterly superb Multistrada, to say nothing of the Panigale, Ducati finally has products that can openly take on the best Japanese and European machinery in outright terms. Quality is up, prices are in check, and performance is fantastic. The EICMA stand was disappointing only because it was really just filled with bikes we had already seen before, accessorized to hell. But industry people smiled. Ducati makes sense now. And they have the financial backing and industrial management quality to keep on doing it. If I were based in Noale, (or Hamamatsu for that matter) I should be very worried.
The Mass Market Cometh Back
The take away conclusion for any EICMA observer in 2012 comes from looking at the direction of the market leader. Honda is the most important motorcycle brand in the world, period. Of course they always had the production figures to back that assertion up, but in recent years the company Soichiro built has retaken its traditional place as the industry leader in product development as well. And that leadership has radiated from the place where Honda first made its great name : technical superiority at reasonable prices.
Forget the Goldwing and the CBR1000RR. Those remarkable machines will be but footnotes in the future. Honda is back where it belongs, making not just insanely great motorcycles, but making insanely great market penetrating choices. When for twenty years the conventional wisdom said that Americans didn’t want small motorcycles, they provided the CBR125, 250 and this year the CRF250. When middleweight was understood to mean a 600 or 650cc, they give us a 500cc and 700cc twins with all day ridability and contemporary styling. All at amazing prices, good styling and backed by Honda’s legendary service and quality. When every other Japanese factory is reeling, abandoning markets and elongating production runs, Honda keeps introducing fresh, new motorcycles in low and medium price premium areas. They are flexing their muscle and woe betide the rest, because if Honda can turn me, a life long Honda bashing partisan into a fan, than they can win over anyone.
Where Honda has shown sales success, a few others follow. Kawasaki is noted, and deserves credit for its own leadership into low cost fun. But it is KTM that is kicking the segment open with up-market styling, delicious spec and brand cohesion that picks up where Honda leaves off and pushes the boundaries of what the term budget motorcycle can mean. The 390 Duke, and the inevitable spin offs it will create sets the stage for a whole new era of brand new, high performance motorcycles that are not only accessible, but actually usable by western consumers. The Millennial generation now reaching their twenties are not interested in borrowing money (something that is almost irrelevant anyways as there is precious little credit to give them), particularly if it is to buy a throwaway lifestyle object like a car or premium motorcycle. The industry knows this and the smart people are recalibrating the business to offer attractive reasons to get into biking. The most attractive, besides logical arguments about low operating costs, is keeping prices down without watering down the motorcycle experience.
EICMA in 2012 was a clear indication of where the industry is headed, and a warning to those who think that a couple of years of economic growth will signal a return to business as usual. Instead of seeing this shift down market as a sign of decline, it ought to be a welcoming trend. Mass market motorcycling is where profits are, and traditionally always have been. Of course there will always be demand for exclusivity, extreme performance, and the tempting margins they earn. But while the famous temples of the motorcycle universe may have originated from those fringes, it is the smooth and steady sales of the extraordinary common motorcycle that has created the vast fortunes, and paid for many of the legends. Small and cheap need not be dull or undesirable. If KTM has shown us anything this November, it is quite the opposite.
Michael Uhlarik is a veteran motorcycle industry consultant and award winning designer of motorcycles for brands like Yamaha, Aprilia, Bombardier, and many others. He is the founder of Amarok Consultants, and the chief designer of the Amarok P1 electric racing experiment. He lives in Halifax, Nova Scotia.