Loose Lines: Down and Out [Nov/Dec 1998]

Interesting times. Motorcycle sales are booming away on the back of renewed interest in caged circles (all those traffic jams and the mind blowing performance of the replicas!), lots of serious bikers deciding to buy new because it's almost as cheap as buying a recent secondhand bike and ever falling prices on the back of the shadow importers' splendid efforts - face it, if the proper importers had a stranglehold on the market hot-rot 600's would be pushing eight grand rather than breaking the five grand barrier! Competition and free markets work!

The mainline importers are now moving towards slashing their ranges and drastically reducing the prices of the machines they know will sell. The latter is already evident and expect another round of price decreases for next year's models - these prices seem low because we've all been ripped off for decades but they are still a long way from the factory gate prices.

Ranges won't appear to be restrained, yet more new models introduced, and the deleted bikes will still be in the catalogues but either to special order or excess stuff shipped over from Europe (in different colours to the UK so they can pretend they are next year's models!). Dealers have long resented the fact that importers force them to stock slow sellers along with the stuff that walks out of the door (meaning they can't force the prices of the latter right down as they have to carry inventory that doesn't sell), and that will become a thing of the past. The mainline importers are very serious about taking on the backstreet guys.

Shadow importers will likely be kicked between the legs and wondering what's hit them. Or that's what the official importers would like. However, they have already started rethinking their margins on the back of selling even more imports, have brought down the cost of shadow imports in line with the first round of price cuts from the official importers. Whether they can keep that up, with so many levels of buying and selling between factory and punter, is unlikely. Either way, prices are going to be very low in the first half of 1999.

That will, of course, have a knock-on effect on used prices, maybe falling another 25%, especially the very recent stuff. Supply and demand, as simple as that. However, the classic stuff will probably keep much of its value until later in the year when demand is likely to do a disappearing act (see below).

Probably, it will be short-lived days of bargain basement prices for the punter, come mid year the value of the pound's likely to do a disappearing act and waves of the worldwide recession (Europe and the USA so far excepted) will lead to widespread unemployment and excess doom and gloom. Even if that doesn't happen, lots of shadow and grey importers are likely to disappear on the back of cut-throat competition; but hopefully they will pop out of the woodwork as soon as the official importers try to impose price increases again.

The market for superbikes is likely to collapse - and the Japs have absolutely no modern designs to put in their place. Lots of dross, for sure, but nothing that can offer practical motorcycling whilst not wanting to make the rider throw up or fall asleep - like 300lbs of half litre vertical twin that will top 120mph, turn in 100mpg and have consumables that last for more than a year. None of this is impossible or even unlikely, all it takes is convincing the marketing guru's that there's a large enough demand to get the engineers rocking and rolling.

If the Japanese don't do it someone else will -maybe! The Jap's have been incredibly clever with regards to knocking out innovation elsewhere. In the third world they either let companies manufacture under licence or take large stakes in the actual concerns - it doesn't matter which, the bottom line is that none of these companies which sell millions of small bikes every year are allowed to export in competition with their Japanese masters.

When the Jap's do export such machines they do it through tax free havens where they pay neither tax (on the profits) in the country of origin nor where the bike is actually sold, about a third of the retail price of a 125 commuter disappearing into Swiss bank accounts; the Japanese companies in desperate need of untraceable cash to pay off the Yakuza gangsters. All sounds far fetched for respectable multinational companies but that just touches the surface of what really goes down.

Equally, the European manufacturers are between a rock and a hard place. Those willing to produce mainline motorcycles at reasonable prices aren't able to get anywhere near the quality of Japanese offerings. The rest have to work the up-market segment which is due to collapse and even there they can't directly compete with Japanese pricing - those few companies - Triumph, Harley and BMW - with deep pockets and heavy history behind them will probably survive.

Having said all that, the nature of the modern world is one of technological innovation at ever increasing speed; a trend that is likely to intensify, and designing/ manufacturing motorcycles is one of the easier arenas to enter - and the Japanese have done would-be rivals a favour by concentrating most of their efforts on making hugely complex multi-cylinder designs easy and cheap to manufacture rather than going back to basics.

It's not impossible to produce a basic 500 twin that costs two grand new - admittedly, the margins involved will have both importers and dealers screaming mightily; until they realise how many they can sell (I know you've got to pay that for a step-thru but the factory gate price is less than 500 notes).

That's taking out bribes to gangsters, unaccountable off-shore profits and using existing designs tweaked for economy and low running costs. Already the price of low end 600 fours is moving down towards three and a half grand and could easily breach the three grand mark by the middle of next year (and if it happens, except even more grey importers and used bike dealers to go bust!).

At that level even hardened UMG addicts will probably pop for a new bike; maybe the ever increasing demand will offset the falling pound and Japanese bikes will get yet cheaper. If they can redesign their bikes to make them even cheaper to manufacture (not difficult), demand and cheapness of production will cut out any possibility of rival companies getting off the ground - teeth grinding that, though, seeing the Jap's selling 100,000's of bikes in the UK without being able to get in on the act.

No doubt some likely lad (saw some ancient horror on the TV cock-sucking for the Japs the other day) will pop up saying that the average price of motorcycles is stabilising - and if you add in all the slow selling, no-longer-stocked, expensive cycles to the average he'd probably be right.

We have two threads here - fast falling prices of ultra high tech fours that are all about speed and adrenaline whilst the market's likely to change drastically in the near future, moving towards more basic and even cheaper motorcycles, which will give the chance for non-Japanese factories to come in for the kill if they can move fleet of foot.

If they can't, and it has to be admitted that the Japanese engineers can turn their hand to absolutely any kind of design and do it much better than anyone else - all they need is the right direction - then we're going to end up back in the seventies when the Big Four practically decimated all opposition; then having won spent the next two decades ripping off the punter - both in ill-conceived designs and silly prices - something rotten. Take your pleasures when you can.

Bill Fowler