The Question Manufactures Keep Asking: Why are our sales down?

   Recently, I attended a motorcycle industry meeting in LA. Dozens of motorcycle manufacturers and dealers from across the country had gathered to discuss a topic that weighed heavily on their minds: Why is the motorcycle industry plummeting, and what can we do about it? 

Honestly, before attending this meeting, I didn’t even realize this was an issue. Of course, I had seen the headlines saying Harley was losing ground, that “millennials” were “killing” motorcycles. But it’s hard to believe the industry is in decline when your custom vintage motorcycle business is booked through the next year. 

In many ways, though, I do miss being part of the world of dealers and manufacturers, so I was excited to attend the meeting and listen to what they had to say. 

And for the most part, the meeting was interesting and informative. I got to catch up a lot on the industry news I’d missed working for myself for the past few years. 

But one person's comments really stuck with me. He started out positive, talking about how the motorcycle industry needed to focus on millennials, to encourage them to get AMA memberships and to buy new bikes. I was encouraged. (Though I do not consider myself a Millennial, I do fall under a lot of the struggles they have)

But then he said, “They are buying so many trailers and tiny homes that cost tens of thousands of dollars, so they can definitely afford new bikes.”

Uhhh... what? Let’s think about that. More people are buying RVs and trailers than ever before, so… why aren’t they spending money on motorcycles? The trailer market is, indeed, at its highest. But it’s not because these buyers have a lot of money. These trailers, RVs and tiny homes aren’t secondary homes for adventuring and pleasure — they are their ONLY homes. 

We hear all the time that millennials are simply spending money on the “wrong” things. Remember the fancy avocado guy? If only millennials stopped spending money on avocados, maybe we could buy houses (and motorcycles). 

This line of thinking never fails to get under my skin, because it flagrantly ignores the facts.

In the US, we have a trillion dollars in credit card debt, with interest rates often as high as 28%. Much of this debt goes toward buying cars, which depreciate as soon as they’re driven off the lot.

We have one and a half trillion dollars in student loan debt, which often takes a minimum of 15 years to pay off, with interest. Students believe college will pay off with a good job, but it so rarely does. Your graduation present is tens (sometimes hundreds) of thousands of dollars in debt. 

And don’t forget the housing market. I personally could never buy a house in the neighborhood I grew up in, the prices have increased that much. I couldn’t even rent an apartment as, here in DFW, rent  for a two-bedroom apartment costs more than a mortgage on a three-bedroom house. 

In the sixties and seventies, a Ford F150 might sell for around $5,000. Now, one would cost thirty grand or more, for just the bare-bones model. A nice one could cost fifty grand or more, which is more than I have ever made in a year. What was your annual salary in the seventies, 80's or even the 90's!? 

Technological advances help us get our jobs done faster than ever, and here in the US productivity is the highest it’s ever been. But the middle class wage does not reflect that. For example, a few years ago a mechanical engineer could have easily made $100K/year. Now you will likely pay that much in student loans and end up only making $60K/year even five years after you are still working for the same company.

The math just doesn’t make sense. 

Dealerships still only pay mechanics $15/hour or less starting — if they’re lucky — and health benefits are spotty. I haven’t even gotten started on gas prices, health care, food, childcare… But I’ll spare you. 

With this perspective, doesn’t it make a lot more sense now that new motorcycle sales have plummeted? It’s not that young people don’t want them. It’s because huge corporations are benefiting from higher productivity, and not paying down that success.

When we don’t even make enough to save for retirement, we can’t justify spending seven to thirty grand on a product that’s essentially a new toy. Millennials have learned to make hard choices, and although we may want a cool new motorcycle, we have to admit our crappy four-door is more practical. Especially if it’s already paid off. 

If you want to sell more motorcycles, there is a solution: pay your workers more. It’s not that millennials don’t want motorcycles, it’s simply that they are a luxury we can’t even consider until the middle class is paid fairly.