Motorcycle Industry

An Expert's View about Non-Automobile Transport Equipment in Japan

Posted on: 29 Nov 2011

Summary

While the U.S. continues to dominate the Japanese market for large motorcycles, overall motorcycle sales have been declining, with production hitting 380,242 units in 2010. The current favorable exchange rate makes imports from the U.S. relatively inexpensive for Japanese consumers. U.S. motorcycle manufacturers with cutting edge technology have a good opportunity in the Japan market.

Market Demand

The market for motorcycles in Japan has continued to shrink since hitting a peak sales of 32.9 million units in 1982 which included motorcycles supplied by Japanese manufacturers for the domestic market as well as imports. However overall shipments (number of motorcycles manufactured for the domestic and foreign market by the domestic manufacturers and Japanese OEM suppliers overseas) in 2010 were 380,777, which remained about the same level as 2009 at 380,242 units. In 2010 Honda increased production in Japan for the first time in seven years.

Japan classifies motorcycles by engine displacement for the purposes of licensing, tax, insurance and registration: 50cc or smaller, 51 – 125cc, 126 – 250cc, over 250cc. In 2010 there were decreases in shipments for the domestic market in the 50 cc or less (231,247 units a 9.5% decrease), and the 126-250cc (27,275 units a 26.6% decrease) categories. Increases were seen in the 51-125cc (96,368 units a 46.3% increase) and the 251cc (25,352 units a 14.5% increase) categories from the previous year. Collective sales of 51cc and over motorcycles were about 148,995, a 16.0% increase from 2009.

In the 126 – 250cc class, 250cc scooters were by far the most popular with strong demand from riders of all ages. However, since the demand for sports motorcycles was weak, total sales of 126 – 250cc motorcycles sank to 27,275 in 2010.

In the over 250cc category, demand for large-displacement models strengthened with growing interest among riders in sports and touring motorcycles and the increasing number of middle-aged and senior riders. In terms of suppliers, the Japanese market continues to be dominated by the big four Japanese motorcycle manufacturers; Honda, Yamaha, Suzuki, and Kawasaki. According to the consolidated statements of each firm, the gross sales of the motorcycle division of the four firms were 2.44 trillion yen, out of which 150.9 billion yen for the Japan market and 2.29 trillion yen for exports. The long-term trend is for decreasing domestic production since the big four are shifting toward overseas manufacturing due to exchange rate fluctuations and cost reduction objectives.

In the first half of 2011 (January - June), motorcycle shipments for the domestic market increased 5.4% or 204,722 units compared to the first half of the previous year. Due to the March 11, 2011 earthquake, tsunami and nuclear disaster, the economy of Eastern Japan’s Tohoku Region suffered. In the disaster stricken area the demand for smaller displacement motorcycles increased for the first time in five years as there was new appreciation of the usefulness of motorcycles as means of transportation.

Best Prospects

In the first half of 2011, sales of motorcycle importers decreased over the previous year with the exception of highend for motorcycles manufactured by Harley-Davidson, Ducati and Triumph. Following the March 2011 disaster, the sales for the motorcycle import market decreased in line with a general downturn in consumer spending on high-end merchandise. Despite the unfavorable circumstances, it is notable that the aforementioned three motorcycle importers increased sales compared to the first half of the previous year. If an importer can provide value–added service despite the circumstances, there is potential for U.S. motorcycle manufacturers to increase sales in Japan.

Electric motorcycles are drawing attention as next generation vehicles that are more economical and cleaner than those with gasoline engines, without sacrificing the lightness, performance and convenience inherent with the motorcycle. At present, there are technical issues such as limited cruising distance, increased weight and lack of charging infrastructure, but progress can be expected in the near future. Yamaha started leasing the EC-03 in June 2010 and Honda started leasing EV-neo in December 2010.

In addition, recent favorable exchange rates (Federal Reserve $/Yen 117.76 was 2007 and 78.28 on November 1, 2011) make imports from the U.S. relatively low in price for Japanese buyers. U.S. motorcycle manufacturers with cutting edge technology have a good opportunity in the Japan market.

Key Suppliers

There are four big motorcycle manufacturing companies in Japan. According to the Japan Automobile Manufacturers Association (JAMA), the 2010 total production in Japan by domestic suppliers as well as Japanese OEM suppliers overseas was 664,175 units which included shipments for the Japan market as well as foreign markets. Honda manufactured 201,007 (30.3% of total), Yamaha 182,734 (27.5%), Suzuki 167,606 (25.2%), and Kawasaki 112,752 (17.0%). Honda has more than a 50% share in the smaller categories while Kawasaki does not manufacture any 50cc or smaller motorcycles. In the larger displacement (251cc and over motorcycles) category, Suzuki and Yamaha compete with each other for the leader of this market segment. In 2007 Suzuki was the leader but Yamaha has held the top spot since 2008. Since shipments for the motorcycle market in Japan was 380,242 units in 2010, more than 40% of Japanese manufactured motorcycles are exported.

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Posted: 29 November 2011

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Expert Views    
Motorcycle Industry   By U.S. Commercial Service