Market for motorcycles
Over the years, motorcycles have begun to gain ground in the Brazilian market. In this article you will know more about the two-wheels sector in Brazil.
The use of motorcycles increased in the last few years and there are some reasons why this happened. Price is one of them: it's cheaper to buy a two-wheel machine than a car. Mobility is another motivation for the growth of the number of motorcycles – it's easier to ride a motorcycle than driving a car in the traffic jam of the big cities, considering that the number of cars have doubled in the 12 main Brazil's metropolis from 2001 to 2011.
But it wasn't only the number of cars that has increased; according to Denatran (Departamento Nacional de Trânsito or National Department of Transportation), the amount of motorcycles jumped from 3.5 million to 18.3 million in the same ten-year period. In 2011, 1.940.564 motorcycles were commercialized in Brazil. This represented an increase of 7.5% in sales in comparison to 2010.
According to most recent data from October 2012, Honda and Yamaha are the companies with the biggest shares in the Brazilian market with, respectively, 80.29% and 9.66%. From the 10 most bought motorcycles in Brazil, 8 are Honda's and the other 2, Yamaha's. Suzuki has 2,11% of the share, followed by Dafra (2,05%) and Kasinski (1,26%). The other 4.63% is represented by branches like Amazonas, BMW, Garini, Kawasaki, MVK, Sundown and Traxx.
Expectations and results of 2012
The forecast for 2012 was that sales would increase at least 5%. In 2012, however, the motorcycle market didn't obtain good results. Actually, in the first semester of this year, the number of motorcycles produced has dropped in comparison to the same period of 2011: there were 35 thousand less motorcycles in the industry.
The estimate of the president of Abraciclo (Associação Brasileira dos Fabricantes de Motocicletas, Ciclomotores, Motonetas, Bicicletas e Similares or Brazilian Association of Manufacturers of Motorcycles, Mopeds, Scooters, Bicycles and Similar Products) is that approximately 440 thousand units weren't sold in 2012.
Why so many motorcycles weren't sold?
One of the reasons for the decrease in sales is that Brazilian people have run out of credit. Insolvency increased from 3.8 to 6% in the first six months of 2012, compared to the first semester of 2011. This happened because costumers usually try to buy models that they can't afford, sometimes being encouraged by sales people, and this common practice helps increasing the insolvency, justifying the restriction in credit offer.
Approximately 85% of motorcycles' costumers belong to the classes C, D and E and need financing. Considering this and the selectivity of the banks for releasing credit, the results of motorcycle sales in 2012 didn't achieve the expected.
2012 in numbers
From January to November of 2012, there has been 1.5 million motorcycles licenses, which represents a decrease of 14.2% compared to the same period of 2011. Also, sales dropped from 1.9 million units sold from this period of 2011 to 1.5 million units in this period of 2012, which represents a decline of 21.2%.
The 2011's 2 million motorcycles' accumulated production also dropped to 1.6 million units in 2012, representing a difference of 20.2% between the two years.
In November of 2012, though, 137.7 thousand motorcycles were sold, against 133.3 thousand in the previous month. Even with this small growth of 3.3% in comparison to October, the sales of both months decreased 29.6% in comparison to the same months of 2011, when 195.6 thousand units were sold.
Until the end of 2012, there will probably be a drop of 15% in the expectations of motorcycle sales in the year. From the 3 million estimated motorcycles produced, the forecast is that only 2.1 million will actually be produced until the last day of December.
The future of the market
Even though the market hasn't been favorable to the motorcycles, Abraciclo's representatives seem optimistic about the future of the sector. For 2013, the association's projections are that more than 6 thousand units will be sold per day, giving continuity to the sales average for the past 5 months (from July to November of 2012). Also, according to the entity, production and sales of motorcycles will probably increase 3.7% and 2.4%, respectively.
This forecast is based in the stabilization of the insolvency rate in motorcycle's financing, registered from the middle of 2012, and in the opening of lines of credit by public banks, which started in the end of the second semester of 2012.
In interview to the website Linx, Abraciclo's CEO, José Eduardo Gonçalves, said this retraction is temporary and there is plenty of potential for the market to develop in Brazil. He added that the forecast is that sales increase 250% in the next 10 years – in other words, the organization believes that approximately 4 million units will be sold per year until 2022.
With the restriction of credit, the market of lightweight motorcycles was the one that registered the greater decreases. Differently from this market, the Premium motorcycles – those with more than 500 cc – haven't being affected by the restriction of credits, since their costumers can obtain financing more easily or usually pay most part of the acquisition in cash.
In 2008, this sector represented only 1% of the motorcycle market. In the first semester of 2012, there was an increase of 22.4% in sales of Premium motorcycles. In two years, there was an increase of 52.1% in this sector. The segment still represents a small share of 2.4% of the motorcycle market, but it's development is inevitable.
The most sophisticated brands have been coming to Brazil for the past years. BMW Motorrad – a segment of the Germany group BMW in the two-heel sector –, Harley-Davidson, Ducati, Kawasaki, MV Agusta and Triumph are some of the big enterprises that are already selling their products in Brazilian lands. The forecast for 2013 is that 10 companies will be installed in the state of Amazonas, at the Polo Industrial de Manaus (Industrial Pole of Manaus).
Even with big brands coming to Brazil, the no. 1 in the Premium market is also the no. 1 in the popular market: Honda has a 28.4% share of the sector on the sales of the luxurious motorcycles.
If the 2012 national market wasn't very good for motorcycles, exports obtained the best performance in the last four years, reaching more than 100 thousand units sold abroad.
Until November 2012, 95,5 thousand motorcycles were exported. According to Abraciclo, factories are about to close the year with 105 thousand motorcycles shipped, which represents a 43.1% rise compared to 2011 and confirms the major number of motorcycles sent abroad since 2008, when exterior sales reached 132 thousand units.
This increase happened mostly because of the South American countries – especially Argentina, the major Brazil's consumer, that increased 68.1% the purchase of motorcycles, and the Andean countries, which have become one of the main destinations of Brazil's factories. Colombia became the second biggest importer with 7.4 thousand motorcycles, increasing 80% compared to 2011. Ecuador also had a 63.3% rise in imports.
Honda and Yamaha are the two companies that explore the external market. Honda exported to 31 countries in 2012 and represented 83.3% of the sector with 80 thousand units sold until November 2012. Yamaha, with 16,7% sold 16 thousand units. Both factories act mainly in emergent markets.
Although 2012 brought good results to the segment, the forecast is that sales will stagnate in approximately 105 thousand motorcycles exported per year, starting in 2013.