7 things the motorcycle industry can learn from the car industry

In the second part of this review of 4 wheels versus 2, I discuss 7 things that the motorcycle industry could learn from the car industry. If you missed the first part then you can read it here (provided I managed to copy the link correctly): https://www.dhirubhai.net/feed/update/urn:li:linkedInArticle:6308613786785845249

Once again I am not trying to argue that every car company or every car dealer does these seven things better, just in the course of my personal experience these are seven areas of opportunity from which the motorcycle industry can learn. I would love to invite comments and dialogue around this.

Seven things the motorcycle industry could learn from the car industry:

1.      Improving safety. The Achilles’ heel of the power two wheel industry

2.      Effective lobbying to Government about the value and relevance of the sector

3.      Maximising the contribution from the service department of dealerships

4.      Attracting female customers

5.      Developing management talent in the retailers

6.      Effectively utilising leasing and PCP products to promote trade cycle management

7.      The value of long lead launches to create pre-orders

So once again let’s get into this in more detail…

1.           Improving safety. The Achilles’ heel of the power two wheel industry

It’s a scary statistic that the industry would prefer to keep under wraps, but the reality is that whilst riders of “Power Two Wheel” vehicles (mototcycles and scooters) account for only around 1% of the road users in Europe, they are involved in almost 25% of road accidents involving death or serious injury. 

Clearly riders are inherently more vulnerable on the road than drivers in a safety cell, but the social and healthcare impact of these statistics is frightening. It is one of the reasons why the EU has not embraced motorcycles and scooters as part of an integrated transport solution for cities in spite of the obvious advantages in terms of mobility, space and parking. 

It’s the Achilles’ heel of the motorcycle industry, especially in Europe, where if it isn't addressed it could ultimately see motorcycling become irrelevant or legislated out of existence. 

The car industry started to address the issue of safety seriously in the 1980s first with side impact bars, then ABS, then airbags etc. By contrast the motorcycle industry has been slow to adopt technologies that will improve safety with ABS only becoming mandatory for bikes over 125cc in the last couple of years. There are technologies which could radically change the safety equation and I think one or two manufacturers, perhaps those that span both sectors need to be bold otherwise we could see motorcycles increasingly marginalised by legislation and public opinion.

2.      Effective lobbying to Government about the value and relevance of the sector

If you have been to Barcelona you will know that it is probably the city in Europe with the highest proportion of motorbikes and scooters on the road. There was a study done by the city that said if 10% of those riders gave up their bikes and travelled by car instead the city would grind to a halt. There was a similar study done by a Belgian University that getting 5-10% of car drivers to switch to motorcycles you would reduce congestion by 40%. 

Never heard of these studies? You’re not alone. The motorcycle sector has been really poor at PR and lobbying for its own value, both as an important employment sector and part of the social fabric of Europe, and also as part of an integrated transport solution for cities. Perhaps it’s because the sector doesn’t employ enough people. Perhaps it is the fear of raising too much awareness with Governments that could lead to more scrutiny on the safety front. Perhaps it is a poor job done by the Associations and a lack of willingness to collaborate effectively among competing manufacturers. But whatever the cause the motorcycle sector is really poor at lobbying for its own interests in comparison to the car sector and needs to improve.

3.      Maximising the contribution from the service department of dealerships

When I joined the motorcycle industry from the car industry in 2009 there were many positive surprises. But I was absolutely shocked by how far behind the industry was in optimising the financial contribution from the service department. Service absorption levels among motorcycle Dealers vary by country and by manufacturer (if they are even measured at all) but the best description is “woeful”. I was astonished to find busy workshops with 8-10 technicians in major cities that barely broke even on Service Departmental Profit. There has been some improvement but it has been really slow. 

Perhaps because motorcycle Dealers can still make good margins from new vehicle sales and have the additional income from accessory and clothing sales there just hasn’t been the focus on this department because, unlike the car industry, it just wasn’t critical to keeping Dealerships alive. Yes the seasonal nature of motorcycling makes optimising service more difficult but there are three obvious areas where motorcycle Dealers can generate more profitability – reducing work in progress, pushing up labour rates and selling service plans. This could be the topic of a separate article in itself!

4.      Attracting female customers

It is a simple fact that significantly less than 10% of all motorcycle buyers and riders are women. Now I am not saying that the car industry has eliminated all the problems of how it treats female customers but at least it has achieved parity with 50% of sales. No major motorcycle market in Europe has more than 10% women buyers and no manufacturer is close either.

Yes perhaps the sport by definition attracts more “risk takers” who tend to be male, but with the typical age for new motorcycle buyers being 40-55 not 17-30 this cannot be held as an excuse anymore. On the whole manufacturers simply look at the job of attracting women into the sport as just too difficult, so they don't try. It’s easier and cheaper to go after the mid life crisis male. But how long can this approach sustain the industry? In the same way that Renault was the first car company to break out to specifically target female buyers someone in the motorcycle sector should take a brave pill. But who will?

5.      Developing management talent in the retailers

Motorcycle Dealers are nice places to visit. They employ nice people. But the ongoing development of management talent is absolutely woeful in comparison to the car industry (which itself isn’t that great). Smart, ambitious managers in the retail motorcycle industry, unless they absolutely love the sport, tend to leave and go to the car industry or other industries altogether because there is no development. I’ll leave it at that.

6.      Effectively utilising leasing and PCP products to promote trade cycle management

The idea of trade cycle management unbelievably still seems like “weird science” to much of the motorcycle sector. If you are buying a new motorcycle in Europe, with the exception of the UK and perhaps France, leasing and PCP offers are still not fully embedded into the sales process. And the trade cycle renewals process remains again largely undeveloped. There remains a huge untapped opportunity for the industry to make new bikes more accessible and in particular to encourage more regular renewals and trade up. Finance companies have a role to play too here. Most other than the captives are completely disinterested in the sector and companies offering balloon finance products are few and far between. But new motorcycle buyers who ride for pleasure on the weekend on the whole are the same customers who also buy new Audis, Volkswagens and Toyotas. The opportunity to build customer lifetime relationships is being missed.

7.      The value of long lead launches to create pre-orders

In the first part of this article I described how motorcycle companies have maintained the excitement and romance of new model launches. How the worldwide Harley-Davidson Dealer network are the first people in the world to see the new model year bikes when they are revealed at the Dealer Show. The counter point to this, and where the motorcycle industry does miss out, especially when launching products into a new segment / sub segment, is the value of long lead launches. Most motorcycle companies do not leverage the media or use long lead launches to create customer engagement ahead of a new model. The impact is that the opportunity to create pre-orders and a fast start is often lost and with a very seasonal business this can seriously hurt a new model. Better, more professional launch planning and using the media could help manufacturers to have more early success.

So I hope you enjoyed these two articles and found something interesting in them. If you missed my first article on the other side of the coin “7 things the car industry can learn from the motorcycle industry” you can find it here.

https://www.dhirubhai.net/feed/update/urn:li:linkedInArticle:6308613786785845249/

In the end both industries have advantages the other could learn from. It's not simply a case of "4 wheels good, 2 wheels better" to misquote George Orwell.

I would love to hear your own experiences of the two sectors. Let’s keep the debate going.