Re: Replacement for the Honda ST1300 in 2014? A short article with responses.
This is long, but hey, it's a rainy Sunday morning...
I believe there are some misconceptions here and often repeating. First; that is a wrong statement that they are concentrated on small bikes.
I base that on what I read a few years ago in Honda's
2010 Annual Report, where they discuss robust growth in Asian markets and plans for expanding production in India and Vietnam. (They did carry out those plans and are now enjoying more sales as a result. The India operation now produces
2.2 million units annually.) Go read the Motorcycle Business sections of that and the
2013 Annual Report and tell me where they're selling the most bikes and what kinds of bikes they're launching. Even in the North American market, they attribute their increased sales to small and mid-sized models:
...Honda?s consolidated unit sales in North America for fiscal year 2013 increased 25.0% from the previous fiscal year to 250 thousand units. Of this, consolidated unit sales of motorcycles increased 43.0% from the previous fiscal year to 153 thousand units, mainly due to steady sales of models such as the newly introduced large NC700X model featuring outstanding fuel economy and the PCX model scooter, primarily in the U.S.
You're thinking about this as if North America were a big market for Honda motorcycles, and the numbers say it isn't. The 2013 Annual Report shows that Honda and its subsidiaries sold 15,494,000 motorcycles and ATVs worldwide in 2013. 250,000 of those units, or about 1.6% sold in North America. Yamaha's
2012 Annual Report shows a similar pattern.
Kawasaki sold a much larger percentage in emerging markets, but I've visited some of those places and Kawasakis are a rarity in a sea of Hondas and Yamahas.
Second; people buying bikes, I see them all the time... They buy cheaper and more capable bikes. More comfortable and more sophisticated. That is why st is not selling. MY FRIEND IN TURKIYE HAS A 125 CC MOTORCYCLE COST 1750 DOLLARS NEW, GOES LIKE PRRRRR AND HAS A GEAR INDICATOR.
...And would suck eggs as a touring mount.
Most bikes in that class aren't built to the same standards as the bikes you buy here because the price has to be kept down to what the people buying them can afford. In a lot of markets, they're cheap primary transportation, not recreational toys like they are here.
Honda just introduced a North American bike in that displacement and price bracket. It's called the Grom and has an MSRP of $3,000. It reaches 60 in about the same time as a Civic, will bump the rev limiter when you get there and doesn't displace enough to be legal on limited-access highways in many states.
I won't buy into the Sport Touring market being a tiny minority of bikes.
How about some rough estimates based on what can be scraped up from annual reports and recall notices to help put this one to bed?
- Honda. Being generous and assuming that annual production (and sales) of STs for North America is still the 2,200 units it was back in 2003-2004. Of the 153,000 motorcycles produced in 2012, that's 1.4%. If you use the 2010 figure from the recalls (600), which is probably much closer to current reality, it's 0.3%. (That doesn't take into account the fact that there are no 2011 or 2013s, which averages annual production for this market down to 300.)
- Yamaha. They sold 72,000 motorcycles here last year, and a recall issued in 2009 hints that 3,300 of those were FJRs. 4.6%.
- Kawasaki. Based on a recall that covered the 2008-2012 model years, Kawasaki is averaging 2,660 C14s per year. Someone at a large Kawasaki dealer once told me they sell a lot more ATVs and watercraft than they do motorcycles, so let's assume a third of the 121,000 units (40,333) they sold here were motorcycles. 6.6%
- BMW. Sold 14,455 motorcycles in the U.S. in 2012. Based on recall information from 2009, I figure about 1,530 of those were R1200RTs. 10.5%
- Suzuki. Not in the sport-touring market, but sold 42,000 motorcycles here in 2011. 0%.
- Harley-Davidson. Also not in the sport-touring market, but sold 151,000 motorcycles in 2011, almost as many as Honda. 0%.
- Triumph. Appears privately held and doesn't reveal production numbers. Rumor has it worldwide production is about 50,000, so let's assume 20% of that (10,000) comes to the U.S. A recall reveals that they imported 513 Trophies in 2012. 5%.
That accounts for 482,788 motorcycles sold here. Using the "generous" figure for the ST1300, 10,203, or about 2.1% of unit sales, fell into the sport-touring category. Using the probably-closer-to-current number puts the total at 8,603 or 1.7%. I'll leave it up to someone else to decide what kind of minority that is, but it's definitely a minority.
If Honda chose to be a leader rather than a follower, they could take a fair sized bite out of BMW, Kawasaki, & Yamaha sales in the Sport Touring market. Grabbing a few buyers from each brand would add up.
Even if Honda were to snap up the entire North American sport-touring market, we're talking about a total volume of less than 10,000 units. I'd be very hard pressed to ask my management to fund a marketing blitz to grab a few more sales of a low-volume product in a low-volume segment and not get laughed out of the room. I'd be even harder pressed to ask them to fund development of a new model in that segment unless I had marketing data that said they'd sell. (Not that I have any clue what marketing data led Honda to produce such hot sellers as the DN-01, Fury and VFR1200.)
Playing it safe is selling scooters (and other small displacement bikes) & cruisers. But playing it safe won't grow the brand.
Except that the figures in the annual reports say that Honda
is growing its brand selling scooters and other small displacement bikes. They're just not doing it in the U.S. market and definitely not in our segment. They can try to sell 10,000 sport-touring bikes at at $15,000 each for $150 million in revenue or a few million 125s at $1,500 each and take in $4.5 billion. The margins on the 125s are probably a lot thinner, but not enough to overcome a factor of 30 in revenue dollars.
--Mark
