Industry Updates

2008 has been a year of change and challenges in the motorcycle industry.

MC Stuff shut down. While that may not be a name most of you are familiar with, it was the Japanese motorcycle parts leg of Global Motorsport / Custom Chrome group. 3 warehouses closed... This reduces the number of industry suppliers (and the availability of some parts).

Nichols merged with Hap Jones. Two fairly small industry distributors joined forces to try and survive.

Kerker discontinued a number of pipes for our older bikes. While I doubt they will kill them all, I do expect more cuts.

When the fuel prices sky-rocketed earlier in the year, people dusted off large numbers of older bikes. So there are many more older bikes in circulation.

OEM dealerships are feeling the pinch. A local Yamaha dealer just closed permanently.

Sales of cruisers and sportbikes have plummeted causing all the Japanese OEM's to cut back production for the 2009 model year. For street bikes over 250cc, sales of new units are down around 20% (and probably much worse in the latter part of this year). H-D sales are off 37%.

One thing that will take a while to sort out - several of the smaller parts manufacturers are going to go out of business. These are 'no name' companies who produce private label parts for different distributors. I know of one sprocket manufacturer in the far east who is struggling.

Part prices going into 2009 will likely rise - and possibly a fair amount. The Yen to US DOllar exchange rate is horrendous at the moment. The rates have shifted nearly 20% to the bad over the past 2-3 months.

More to follow...

Ahhhh! But the good news!!! Gasoline still evaporates in carburetor bowls over the winter and gums up pilot jets, choke circuits and causes a tremendous hassle in the spring when the owner tries to start his bike! Thank goodness for evaporation. hehe

:laugh:

Thanks for the update...all these concern KZR, some more directly than others, but ultimately all these changes impact KZR.

From a consumer standpoint, the economy, and in particular the Canadian dollar, is affecting me. I have a list of parts to order from Z1 but our dollar has tanked. So, I'm going to have to wait and see if it rebounds in the new year.

Also, you can see the worldwide impact of the economy in motorsports. Not sure if anyone follows it but some major teams have called it quits lately due to the financial crisis. Honda has left F1 and Subaru and Suzuki just quit WRC. Lets just hope it turns around quickly.

im sorry guy's it is just the beginning of some bad times to come i thank my lucky stars that i have just got the job i have now doing something i love to do i might not be able to afford as much in the way of goodies for my bikes but at least i'll be able to keep the ones i have and slowly make them better.

One potential bright spot. Many of the aftermarket companies have been focused on parts for the newer bikes. But with sales of new units dropping, there is likely to be a little more focus on them continuing to provide parts for the older bikes. One of the major industry suppliers acknowledged parts for the older bikes was a growth area this year - although overall, they've had a poor year.

Exchange rates will probably continue to bounce around. I suspect the Yen will come back against the US Dollar, but that may be difficult given the unpalatable nature of investments in the USA stock markets and Treasuries... The Yen to Dollar has swung from around 100 Yen to the dollar, to a high over 120 to the dollar, and now down well under 90 to the dollar - all in about a year.

wiredgeorge wrote:

Ahhhh! But the good news!!! Gasoline still evaporates in carburetor bowls over the winter and gums up pilot jets, choke circuits and causes a tremendous hassle in the spring when the owner tries to start his bike! Thank goodness for evaporation. hehe

Hey George....I use a product that actually eliminates petrol evaporation. Bought it from a well known forum KZR parts distributor. Stuff works like a champ ! No more clogged pilots or chalky residue. Lasts for months too. You should offer this product to your customers. Would make for some satisfied folk.

wiredgeorge wrote:

Ahhhh! But the good news!!! Gasoline still evaporates in carburetor bowls over the winter and gums up pilot jets, choke circuits and causes a tremendous hassle in the spring when the owner tries to start his bike! Thank goodness for evaporation. hehe

Now that was funny!!!:laugh:

I know this may be a bit self serving, but how much of a increase in parts are you expecting from 08-09?

Also with the tighting of belts across the country, do you see many more companies that produce the parts leaving the industry and thus leaving a void in the market for the products they produce, or will someone else pick them up and market them at a higher price.

Price increases vary based on where the parts are made, and what they are made out of.

Some manufacturers are holding prices, but most are passing increases along. With a few parts, the prices are dropping.

Motion Pro, K&S (turn signals, wire, seals and more), Kawasaki, Emgo and more are already making changes - 5%-10% seems to be the average raise. Dynatek is holding prices at 2008 rates. We are waiting on the rest as some don't shift their prices until March or April. By April 1st, the majority of price changes will be completed for 2009. In past years it was unusual to see mid-year changes, but in this crazy ecomony, I fully expect to see some companies changing prices on the fly. The key to all of this is the US Dollar against the different currencies.

For OEM parts the Yen to US Dollar is key - and that's pointing to a 15%-20% increase if exchange rates hold steady.
The Taiwanese dollar to US Dollar has not been bad - almost a wash for the last 12 months.

When you look at where parts are made, the motorcycle parts come from all around the globe - Italy, England, Australia, Taiwan, Singapore, Malaysia, Argentina, China, USA, S. Korea and more.

We've already seen some distributors / importers switching manufacturers behind the scenes. Anyone buying things like oil filters may notice the country of manufacture changing on the parts boxes...

There are so many changing factors influencing the prices today - many raw material cost have dropped, shipping costs have dropped, so on the one hand you'd expect some prices to come down. But manufacturing orders have dropped as well, so the manufacturers are wrestling with increasing prices to stay in business, to bidding low on contracts to have enough work to survive... it's crazy...

Jeff
Thanks for the in heads up on the possible availability issues for some vintage parts. Some of us probably would have never thought about the the currency rates, global economy, manufactures closing down and so forth. I am one for sure that did not really think about it, when I should have. I remember the days when not much was available on the aftermarket end, other than exaust pipes, case guards, and backrests for street use. I know the drag racing parts are a little different and sometimes to radical. I praise you for your knowledge and dedication to the bikes of yesteryear. Shame on me for wearing blinders. Once again Thanks