An industry-wide decline in new motorcycle sales in Australia is
puzzling for MotorCycle Holdings
by Simon Evans
Sales of new motorcycles across the industry have been in decline for almost 12 months and David
Ahmet, the chief executive of ASX-listed MotorCycle Holdings, is perplexed about the reasons why.
He suspects it may be a combination of low wages growth, subdued confidence and large chunks of
discretionary spending going into big housing loans and saving for deposits to try and enter a punishing
housing market where real estate prices are still at very high levels despite some modest declines in
Sydney and Melbourne.
"The last 12 months have been a bit of a surprise," he said on Thursday, referring to an industry-wide
slowdown which has continued in the first three months of 2018.
The company's shares have dropped 30 per cent in the past four months and $100 million has been
wiped from its sharemarket capitalisation. It is Australia's largest motorcycle dealer operator, with 28
The industry-wide new motorcycle sales figures are in contrast with new vehicle sales, which are running
at strong levels in the first few months of 2018 at 4.4 per cent ahead of the same time a year ago. This
followed record annual sales in 2017.
Mr Ahmet said patterns in new motorcycle sales had always been more volatile than vehicles, because
for many people it was more of a discretionary purchase.
"It's a little more volatile than cars". But many experienced industry players were scratching their heads.
"We are a discretionary spend but it's hard to point the finger at one thing".
Figures released in early April by the Federal Chamber of Automotive Industry showed that Australia's
new motorcycle market slipped 1.2 per cent for the first three months of 2018. A total of 21,614
motorcycles, all-terrain vehicles and scooters were sold during the March quarter. The decline in the six
months to the end of December, 2017 was much sharper across the industry, down by 13.7 per cent to
MotorCycle Holdings listed on the ASX in April 2016 at an issue price of $2 and had been something of
a sharemarket darling. The number of registered motorcycles in Australia almost doubled to 807,000 in
the 10 years to 2016, as riders looked for alternative transport options and a bit of extra excitement.
The stock was trading at $5.20 in early January this year. It gained about 3 per cent on Thursday to be at
$3.62 in mid-afternoon trading.
MotorCycle Holdings paid $123 million for accessories and parts business Cassons in October, which
included eight retail stores which trade as Motorcycle Accessories Supermarket across NSW and
Victoria. A $67 million capital raising was undertaken by the company to help pay for the acquisition and
those new shares were issued at $3.85, causing shareholders who took it up some heartburn with the
current share price below that.
The largest part of the Cassons business is the wholesale component which sells a range of helmets,
jackets, boots, gloves, and spare parts to hundreds of motorcycle retailers around Australia. The
wholesale business represents more than 60 per cent of revenues.
Mr Ahmet said used motorcycle sales were solid, and with low interest rates and relatively low
unemployment rates he would have expected more confidence among new motorcycle buyers, but that
was elusive at the moment.
The latest motorcycle helmet crash test results are now available giving riders a guide to the safest and best helmets available.
The Consumer Rating and Assessment of Safety Helmets (CRASH) - a consortium of government agencies, has recently tested 30 helmets against a range of criteria including protection and comfort.
Roads, Maritime and Freight Minister Melinda Pavey said the Fox V3 helmet came out on top this year, achieving five out of five stars for protection and three out of five for comfort.
“Four other helmets tied for second place with a score of four out of five for protection and between three and four stars for comfort. While two helmets came in last with three stars for comfort but only one star for protection,” Mrs Pavey said.
“Motorcycle riders are more exposed than motorists and risk serious injuries if they are in a crash.
“Road safety is everyone’s responsibility and motorcyclists also need to ensure their behaviour is safe – part of that includes choosing the right helmet and protective gear.”
These latest CRASH results give riders access to important information about the levels of protection a helmet provides.
“Your helmet is the most important piece of safety protection you’ll need when you’re riding – you never know when it may be called upon, so take advantage of the latest CRASH results and choose the one that’s best suited to your needs.”
Last year 18 per cent of all road fatalities and 13 per cent of all road injuries were sustained by motorcyclists, this continues to be a concerning statistic when you realise motorcycles account for only four per cent of motor vehicle registrations.
The Council has recently developed and released a trio of short videos on helmet safety from funding received from a 2016-17 Community Road Safety Grant.
Link to Motorcycle Council of Australia where helmet videos can be accessed http://www.mccofnsw.org.au/a/401.html
In a first for the Australian motorcycle industry, all the major motorcycle brands have joined forces to encourage riders across the country to get their motorcycle out of the garage and ride it to work.
The “National Ride Your Motorcycle to Work Week” will run from October 8 to 15 under a dealer-focussed initiative designed to offer riders every opportunity to “get back on the bike” after the winter sabbatical.
It’s seen as a way of celebrating Australia’s motorcycling fraternity and also gathering rider numbers together as a signal to policymakers at all levels of government that the needs of riders should not be ignored.
A dedicated website (www.ridetoworkweek.com.au) will launch this week.
For more information please download and read the full pdf report below.