Boston: Bostonian Scott Johnston’s commute to his workplace at Burlington, over 13 miles away from home, is not made in the comfort of his car or by the train. Instead, every morning he undertakes the commute by bike. It helps that he loves biking but for thousands of Americans , surging gas prices in the last few months have meant that they have had to give up their expensive car rides and seek cheaper options.
As Americans suffer through a long summer of discontent with economy headed towards an extended weak patch, the country’s bicycle and two wheeler industry readies itself for what looks like a great year for sales.
As customers like Johnston make a beeline for bike and two wheeler stores to control spiraling commuting costs, cycle, scooter and motorcycle manufacturers are getting ready to increase production, develop new models and expand distribution networks.
Given the American’s penchant for larger vehicles, not many have in the past shown any special preference for scooters and motorcycles, unlike Asians and Europeans. But this has changed over the last five years when 1 million new motorcycles have sold each year, says Ty Van Hooydonk, director,product communication, Motorcycle Industry Council, a trade association for the industry. “Today, Americans are using these more for commuting and transportation than simply for recreation”.
Bike and scooter companies push up production
“Trek has seen significant increase in sales of urban commuter bikes and hybrid bikes (combining best features of a commute bike with the ruggedness of a mountain like)”, says Eric Bjorling, spokesperson for bike maker Trek Bicycle Corporation.
Piaggio group, president and CEO, Paolo Timoni explained, “We began investing in this market a few years ago when we saw potential. While sales grew 20% y-on-y for the past 3-4 years, January to June 2008 saw a growth rate of over 75%. In June alone sales were up 147% over June of 2007”.
The company has 15 two wheeler models from brands including Vespa and Piaggio in the US markets currently. Plans are under way to increase imports of vehicles from Italy, to fulfill consumer demand.
Hooydong points out that the January-June 2008 period registered a 65.7% growth in sales as compared to the same period last year. Another hot category, the dual purpose, off road and on road segment, known for its fuel efficiency, also rose 24.3% in the same period.
While Honda and Yamaha are market leaders, the new Piaggio, a relatively smaller player, hopes to grow its market share with sales promotions with 0% interest schemes and $50 free gas cards to go with the purchase of a two wheeler. Scooters cost upwards of $2000 at the entry level and go up to $8000 for the higher end models. With scooters like Vespa’s gives upto 70miles per gallon, the benefits are attractive enough.
Significant lifestyle changes
Landscape artist Chris Clarke surprised his girlfriend Karen, when he bought home a used Honda dual purpose motorcycle. On an average, he has a 350 mile commute and with gas prices soaring, he was finding it very expensive to use their large SUV/truck to get to reach their sites on the city’s outskirts. “I spent $3,500 on the motorcycle but it gives me good value for money.”
Demand for two wheelers is growing so fast that bike shop owner Harold Knochin, of International Bicycle West in MA, says manufacturers are unable to supply enough to feed demand that has poured in from 18 to 80 year olds”.
Recreational Equipment, Inc, has also seen a steady increase in bike sales over the past five years. “Sales in 2008 have gone up by 35% for urban/commuting/ folding bikes”, Brian Foley, cycling product manager, said
American commuters drive about 25 miles a day and spend over $5,800 a year on fuel, taxes and finance costs according to a recent study by AAA, a not-for-profit body for car owners .
Cities and communities get ‘bike friendly’
Citizens groups are finding ways of making biking popular with efforts such as organizing the Bike to Work Weeks across various cities and communities.
Trek will unveil a new line of commute bikes that will be launched in the spring of 2009, with high end models priced at over $1000 and mid-price segment at $750.
Cities are making themselves more bike and two wheeler friendly. San Francisco allows its bikers and scooterists to cross the Golden Gate bridge free while passenger cars and other vehicles have to pay $5 to use the bridge. The city also provides a dedicated parking facility with parking costs almost one tenth of what it cost to park cars.