Many companies have offshored production to cut labor costs in response to revenue losses
Los Angeles, CA (PRWEB) October 14, 2013
The Motorcycle, Bike and Parts Manufacturing industry has slowed over the five years to 2013 with revenue declining at an annualized rate of 0.9% to $6.7 billion. The industry is highly influenced by the prosperity of US consumers; when customers have little disposable income and a negative outlook on the state of the economy, the industry suffers. As such, the recession caused steep declines in industry revenue as consumers held back on discretionary purchases. Revenue declined 21.4% in 2009, indicative of falling motorcycle demand in the United States, and in the same year, major player Harley-Davidson reported a 10.7% decline in sales. Although the industry has since reversed its decline, motorcycle and bicycle manufacturers face a sluggish revenue increase of 0.3% in 2013.
According to IBISWorld Industry Analyst Darryle Ulama, “Cheaper imports produced with low-cost labor have also challenged the industry, and domestic producers have responded by closing facilities or relocating production abroad to remain competitive.” Honda Motor Company, formerly the Motorcycle, Bike and Parts Manufacturing industry's second-largest manufacturer, ended production in the United States in late 2008 and ceased production of about 70,000 units in favor of importing from company-owned facilities in Japan. Offshoring and Honda's exit have decreased the number of establishments in the United States at an annualized rate of 0.8% to 445 in the five years to 2013. “The high-end and bicycle segments of the industry are performing considerably well, but because their share of industry revenue is relatively small, they will not significantly impact revenue growth,” says Ulama.
Over the five years to 2018, the industry is expected to reorganize its efforts to attract different customers, penetrate emerging markets and achieve more efficient production capacity. Industry players are increasingly concentrating on customers who have not purchased a motorcycle before. Middle-aged males comprised the largest industry market segment in the five years to 2013, but this demographic will shrink as the population ages. Higher disposable income and an increase in the number of younger customers will increase demand for motorcycles and bicycles.
The Motorcycle, Bike and Parts Manufacturing industry has a medium to high level of concentration. In general, the industry's high market share concentration is reflective of the integrated operations required to manufacture motorcycles. However, over the past five years market share concentration has decreased.
For more information, visit IBISWorld’s Motorcycle, Bike & Parts Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
The Motorcycle, Bike and Parts Manufacturing industry consists of businesses that manufacture motorcycles, mopeds, scooters, bicycles or tricycles. It also includes businesses that manufacture equipment and parts for these vehicles.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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