First quarter numbers for the powersports industry are coming in, and they don’t look good. New unit sales were down more than 30% compared to Q1 of 2008. This drop is attributed to both the economic slowdown, as well as the ban on youth-designed ATVs and motorcycles with lead paint.
ATV sales and dirt bike sales, the two segments hit the hardest by the ban on youth-designed vehicles that do not meet new lead regulations, were each down more than 33%. Dirt bike sales were off close to 40%. Also unaffected, on-road motorcycle sales also dipped more than 27% below 2008 first-quarter levels.
The most interesting thing to come out of this data is perhaps the hype that has surrounded the lead/children’s bike ban. For all of the clammering that has surrounded the issue (we still don’t know why you would want your child on a bike with lead-based materials), the numbers show that perhaps the ban isn’t having the apocolyptic affect many were expecting. If you hold that the on-road market shows the baseline affect of the economy has had on new bike sales, then at best, the lead-materials ban is accountable for a 13% dip in off-road sales.
On its own, that might be enough to cause a fuss about (although maybe not to the level it was taken). However, consider this: during economic slowdowns we see consumers spending less on discretionary goods. Motorcycles, in any form, are still very much a recreational purchase for most buyers. When you break the industry down into its smaller sub-sections, ATVs and dirt bikes are purely a recreational purchase, whereas street-bikes serve some marginal utility as a commuting vehicle, due to improved gas-mileage over a car.
So how much of that 13% difference is based on the fact that the consumers cannot justify an expense like a dirt bike that has no practical purpose in day-to-day life, and how much of that is related to the consumer not being able to buy a children’s motorcycle because of a crack-down on lead based materials? What percentage of the off-road market is youth bikes affected by the ban? What is that in sales revenue, when compared to adult bikes that cost 2x, 3x and 4x more?
Source: Powersports Business