Canada's motorcycle industry shifting gears to cope with lower loonie

TORONTO -- Canada's motorcycle industry is facing headwinds from the low loonie as the sector gears up for an annual round of trade shows early in the new year.

See Full Article

"If it's at par, it's good for the Canadian importer. But where it is now, you need to try to find every advantage you can," says Bob Ramsay, president of the Toronto-based Motorcycle & Moped Industry Council.

Canada's dollar has fallen to 11-year lows this month, largely because of persistently weak oil prices, slow global economic growth and the comparative strength of the U.S. dollar against other currencies.

Ramsay says the six big names of the motorcycle industry -- the iconic American brand Harley-Davidson, Japan's Honda, Yamaha, Kawasaki, Suzuki and Germany's BMW -- compete globally and have strategies to cope with currency fluctuations.

"You're going to see a very interesting market in the new year because all companies are going to be trying to ensure that they can compete on price, but also on the quality of products."

Harley-Davidson, for instance, recently replaced a longtime distributor with a new Canadian subsidiary more closely integrated into the company's global operations.

Anoop Prakash, who heads the new subsidiary, says Wisconsin-based Harley-Davidson can use its global reach and currency hedging to offset the loonie's increasingly weak buying power -- something its former distributor couldn't do.

"The last couple of years, the pricing has really been driven by the currency," Prakash says. "With the start of the 2016 model year, when we took over in August, we did adjust pricing to be more competitive."

He says new riders generally begin with smaller, less expensive models that they can handle physically and financially and then move up over time - a key to Harley-Davidson's strategy.

"With the new pricing and the new model year, we've really pivoted towards attainability," Prakash says.

"So we have seven motorcycle models today under $13,000 and we're starting at $8,000. I think that demonstrates a great amount of accessibility to new riders and young riders wanting to grow the sport."

Ramsay says the Canadian industry has been successfully adapting to the 2008-09 recession, the more recent downturn in Western Canada and changing demographics.

"For many, many years, the motorcycle industry was doing very, very well based on the baby boomers and them having more disposable income," Ramsay says.

"Now that the baby boomers are almost halfway through their retirement phases, that market is still strong but we need to expand and grow the market across all segments of the population."

He says women, traditionally a very small segment of the motorcycle community, now account for 12 to 15 per cent of all new buyers for motorcycles, mopeds and the like.

Similarly, so-called millennials now in their 20s and 30s and "diverse" ethnic groups have been growing segments of the motorcycle industry's customer base, he says.

"We're trying to reach out and find ways to encourage them to get on a motorcycle or a scooter, rather than an automobile," Ramsay says.

Prakash says motorcycles provide a "great avenue for self expression" and for meeting like-minded people.

"And if you look at urban young adults, including women, it's a little bit about mobility and being able to explore things on your own terms," Prakash says.

The Motorcycle & Moped Industry Council has seven shows scheduled across Canada in January and February.



Advertisements

Latest Economic News

  • National contest tries to convince students that lucrative sales jobs are 'sexy'

    Economic CBC News
    Sonya Meloff wants everyone to know that a career in sales is sexy. Not sleazy. "I think that sales is a really sexy job," says the founder of the Toronto's Sales Talent Agency. "You get to be at the forefront of representing a company, you're the one that gets to talk to the customers. Source
  • Report examines grim Bangladesh leather trade, links to West

    Economic CTV News
    DHAKA, Bangladesh -- Hazardous, heavily polluting tanneries, with workers as young as 14, supplied leather to companies that make shoes and handbags for a host of Western brands, a non-profit group that investigates supply chains says. Source
  • Notley: Keystone XL doesn't lessen need for Energy East, Trans Mountain

    Economic CTV News
    CALGARY -- Alberta Premier Rachel Notley says U.S. approval of the Keystone XL pipeline does not lessen the need for two other controversial proposals within Canada's borders. U.S. President Donald Trump announced the green light for the line more than eight years after Calgary-based TransCanada first applied for a cross-border permit. Source
  • Trump's Keystone XL decision sets up new fight in Nebraska

    Economic CTV News
    LINCOLN, Neb. -- U.S. President Donald Trump may have approved a federal permit for the Keystone XL pipeline, but the fight is far from over in Nebraska, the one state in its path that has yet to approve the project. Source
  • Toronto stock index extends rally, Wall Street mixed after 'Trumpcare' pulled

    Economic CBC News
    Specialist Stephen Naughton, left, and trader Michael Milano work on the floor of the New York Stock Exchange on Wednesday. North American equity markets finished mixed on Friday after U.S. Republicans withdrew their bill to overhaul Obamacare. Source
  • PepsiCo, Wal-Mart, Starbucks join YouTube ad boycott in U.S.

    Economic CTV News
    SAN FRANCISCO -- An advertising boycott of YouTube is broadening in a sign that big companies doubt Google's ability to prevent marketing campaigns from appearing alongside repugnant videos. PepsiCo, Wal-Mart Stores and Starbucks on Friday confirmed that they have also suspended their advertising on YouTube after the Wall Street Journal found Google's automated programs placed their brands on five videos containing racist content. Source
  • Debate renewed over economic benefits of Keystone XL pipeline

    Economic CTV News
    U.S. President Donald Trump is calling his administration's approval of the Keystone XL pipeline a new era for American energy policy. As expected, the State Department reversed a decision by the Obama administration and favoured energy development over environmentalists' objections to the pipeline, which will carry thick Canadian crude oil to Nebraska, where it can flow on to refineries along the Gulf Coast. Source
  • BRP could move Mexican production if NAFTA changes too onerous, says CEO

    Economic CTV News
    MONTREAL -- The company that makes Ski-Doos, Sea-Doos and Spyder vehicles says it could move production from Mexico if NAFTA changes result in hefty border taxes, but BRP chief executive Jose Boisjoli is hoping "common sense" will prevail during upcoming negotiations. Source
  • FCA to wind down transport operations in Windsor

    Economic CBC News
    Nearly 300 jobs could be eliminated at Fiat Chrysler Automobiles as the automaker winds down its FCA Transport operations in Windsor. "Retirement packages will be offered to eligible employees at the Windsor Assembly Plant, which includes FCA Transport," said a company spokesperson in a statement. Source
  • Dakota Access pipeline builder, U.S. government want lake crossing upheld

    Economic CBC News
    The company building the $3.8 billion US Dakota Access oil pipeline and the Army Corps of Engineers want a judge to reject a request by American Indian tribes to revoke permission for the project to cross a Missouri River reservoir in North Dakota. Source