x Abu Dhabi, UAETuesday 16 January 2018

Bikers in the UAE throttle back on luxury buys

Sales of luxury motorbikes have failed to improve but more commuters are turning to cheaper low powered wheels

Motorcycle enthusiasts are shying away from the luxury end of the market, while sales of commuter bikes have increased. Amy Leang / The National
Motorcycle enthusiasts are shying away from the luxury end of the market, while sales of commuter bikes have increased. Amy Leang / The National

Powerful luxury motorcycles are not speeding from showrooms as they used to as bikers remain wary of spending on big-ticket items, retailers say.

Prashant Sharma, the operations manager of Honda Marine and Power Products, which sells Honda sports bikes, said customers geared their purchases towards the lower end of the price scale last year.

"The number of units [sold] increased, but it was more of the commuter bikes than the luxury bikes," he said, on the sidelines of the Gulf Bike Week exhibition in Dubai at the weekend. "There were more commuters than the luxury cruisers."

The UAE is ideal territory for motorcycles, with a dry warm climate for much of the year and a relatively wealthy population. But consumers in the Emirates are cautious about spending between Dh5,000 (US$1,361) and as much as Dh150,000 on a machine that is not a primary a mode of transport, retailers say. After the effects of the economic downturn hit the UAE in 2009, a number of highly-paid expatriates in the Emirates lost their jobs and left the country and that demographic, key to the motorcycle industry, shrank.

Although car makers' sales rebounded last year, with BMW selling a record number of vehicles across the region, motorcycle dealers have not enjoyed the same boost.

Marcel Bode, the general manager of Harley-Davidson UAE, said the US motorcycle maker sold the same number of bikes in the Emirates last year as it did in the year before. But the average amount a buyer paid dropped, as more consumers opted for entry-level machines that were easier on their wallets, he said.

Mr Bode said sales were likely to grow this year.

"The volume will grow, but gross profit per unit will go down. We have to get more customers through the door to achieve the same result," he said.

Al-Futtaim, which sells Honda products in the UAE, is focusing on selling smaller motorbikes to delivery businesses, said Mr Sharma.

Honda has also tied up with local banks to offer financing to would-be customers, he said. While obtaining a loan is common when buying a car or other four-wheeled vehicles, it is rarer to do so for motorcycles, he said. Mr Sharma said he hoped the financing programme, which was launched last week, would attract more consumers as well as businesses that required small fleets of commuter bikes.

Christopher Hudson, the managing director of Mecom Forums, which organised Gulf Bike Week, said another segment of the market that was gaining momentum was off-road biking. The machines used to ride off-road are less expensive than the luxury cruisers and the activity was gaining popularity, he said. "The growth market really is the off-road market," Mr Hudson said. "For two months a year here it is too hot to ride a bike. But 10 months a year, its perfect. And certainly if you look at the off-road, with people going out into the desert to ride, that's a huge, huge growth market."

Some 120 exhibitors showed their wares at the Gulf Bike Show this year, up from 115 the previous year.

"[Motorcycles] are not recession proof by any means, but we're starting to see a good rebound in the industry now." Mr Hudson said.

Jim Drane, the general manager for Kawasaki in the UAE, is also hopeful sales will grow this year. His plan, in the meantime, is to cut costs and monitor stocks closely.

"Just ride it out," he said.