Market Watch
Market Watch
Trade & industry report with cap hpi motorcycle editor Alan Elsworth NEW MARKET THE UK ECONOMY GREW BY 0.2% IN August, in line with expectations. GDP slightly increased as growth in services overcame falls in manufacturing and construction. The economy has also shown modest growth over the past three months. According to Chancellor, Jeremy Hunt: “The UK has grown faster than France and Germany since the pandemic, and data shows the economy is more resilient than expected. While this is a good sign, we still need to tackle inflation to unlock sustainable growth.” Analysts believe UK economic activity is on a “flat-toslightly-rising trend”, which should help the Bank of England keep interest rates at 5.25%. However, the British Chamber of Commerce has warned that the economy “remains in a precarious position”. Head of research, David Bharier, said: “Our research is clear about the issues UK firms are facing – three years of economic shocks, high inflation and interest rates, skills shortages, and trade barriers with the European Union.” On top of that the war in the Middle East is pushing up oil prices, not helping inflation worries and added to negative concerns impacting on the world economies. By this time next year, campaigning for the next General Election will be underway. A change of government could be seen as a positive in some camps, but it will extend the economic uncertainty into a fourth year since the start of Covid. The motorcycle industry will survive, but recovery may be slower than before and certainly take longer than desirable. Even in the midst of all these barriers to good business, the latest MCIA new sales data published for
September shows better numbers than preceding months, finishing a strong 11% up. There have been conversations around residuals on two-wheeled EVs, and unlike the car market, there has been a significant lag in take-up, especially large power motorcycles. Finance companies, as with the rest of the industry, have been in a position of entry into the unknown. This has led to little availability of PCP-type deals. A possible further barrier to increasing EV sales was the recent announcement by Prime Minister Rishi Sunak pushing back the date of a UK ban on new petrol and diesel vehicles. The question from many in the business of funding is what will happen with regard to EVs. ICE residuals remain reasonably consistent, but EV residuals have always been looked at as an unknown, with little real research data available. Residuals are currently being set significantly lower in percentage terms than an equivalent ICE model. This position is currently not envisaged to change. The MCIA September registration data contains better news than in the preceding months, with a strong performance finishing at plus 11% overall. The year-to-date total market is still lagging slightly behind 2022 figures by 2.1%, or in real number terms, 93,971 registered this year, from 95,958 last year. Within that, there is a slowing of the decline in the Moped sector down 6 % compared to the YTD 28% decline. In the Motorcycle band, the bigger negative figures seen in some months have had a respite in September, with a few small dips, but overall,
USED MARKET
AUCTION OVERVIEW
AFTER THE SUDDEN SLOWDOWN IN THE used market a couple of months ago, things have changed little in the intervening period. The larger dealers, where there is a significant overhead in just opening the doors, are perhaps the ones leading the field in discounting, but it is generally being seen across the industry as retailers compete for a share of the shrinking pie. There is a point where, unless a loss on a sale is to be avoided, price reductions can only go so far, especially on bikes acquired early in the season when prices were high. To a certain extent, this can accelerate the lower prices dealers wish to pay as the nights start to close in by not wishing to overstock for the next few months and bidding low to
try and avoid buying part exchanges but have a backstop of cheap bikes if the price offered is accepted. This time of year, the mantra has always been “behind book” for this reason, and if needed, PX’s can always be sold off into the trade. A noticeable change from recent years is that stock availability has been lower when dealers with a cash flow that allows buying through winter, keep prices higher as they prepare for next year. This year, there appears to be a lack of confidence in the market to do this, and consequently, there has been a significant drop applied to this month’s published data, more akin to what would have been seen a decade ago when stock availability was not a major concern.
There is a point where, unless a loss on a sale is to be avoided, price reductions can only go so far, especially on bikes acquired early in the season when prices were high
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some quite substantial increases: Naked increasing monthly sales by 27.2% and still the best improver at 10.1%. With registrations in a similar position to last year both in numeric and percentage terms, as mentioned previously, with the leisure bike buyer more attuned to a plate change, it would not be a shock to surmise that manufacturers time their incentive schemes around the change. September this year looks like there has been little change to that, especially in the 500cc plus sectors. Suggestions that some of the new models are not immediately going into private ownership and are being pre-registered or are replacing demo fleets have been heard during the course of our research. Still, definitive numbers will always be challenging to pinpoint.
NOVEMBER 2023
I
t will come as little surprise to most in the industry that fewer than 40% of entries into auction over this research period were sold. It also won’t be a shock to learn that prices are lagging “behind book”. The eyebrow lifter, however, might be the average difference between hammer and book prices of 9% – the most significant differential seen in recent times and an indication of the state of play in the industry. One point worth noting is that Euro Zone buyers appeared to be very active .
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