Tuesday, June 16, 2009

Scooter Sales Down, Along With The Economy

The motor scooter market is looking for a tune-up.

Scooter sales, which along with fuel prices set a record in 2008, have fallen back to earth. In the first three months of 2009, scooter sales were off 37 percent. And dealers, who last year had trouble keeping scooters in stock, now have showrooms brimming with them.

Frankly I wouldn’t mind fuel prices picking up a bit and steering (people) toward two-wheelers,” said Ty van Hooydonk, the director of product communications for the Motorcycle Industry Council, a trade group.

It has been quite a comedown from last year, when an estimated 222,000 scooters were sold, a record that was up roughly 40 percent from 2007.

Last July alone, some manufacturers saw sales double as consumers facing $4-a-gallon gasoline couldn’t resist scooters, including some fuel-sipping models that got more than 100 mpg.

But just as plummeting gas prices and the recession brought growth to a screeching halt, the industry now is confident that another surge in gas prices at some point will reignite sales.

Meanwhile, the scooter business is relying on a core group of customers who simply like the bikes for their fun and flexibility, regardless of where gas prices are.

The federal stimulus package, which allows sales tax deductions for people buying scooters or motorcycles, also should attract some customers.

John Redmond, the owner of Vespa Crossroads in Kansas City, said he still expected sales to be good this year, though they won’t reach last year’s levels. Gas prices, which were often on customers’ minds last year, aren’t mentioned now as a reason for buying a scooter.

Kevin Stewart of Kansas City, Kan
., was shopping for a scooter recently when he stopped in at Skooters in North Kansas City, a store where the bikes start at $1,500. He took a look at one boasting 110 mpg. But the price of the bike, not the gas mileage, was on his mind.

“I just want one for recreation,” he said.

Selling fuel-efficient products is proving a fickle business as consumer concerns about higher gas prices change quickly. Last July, for example, 52 percent of Americans responding to a Gallup poll said they were worried that $4 gasoline would be a lot higher by year’s end. Another poll taken a month later, after prices had begun to decline, found only 12 percent of respondents said they were worried about higher prices.

Sales of fuel-efficient vehicles
such as hybrid cars quickly began to slide and are still struggling. Although gas prices have risen recently, they still are about $1.40 a gallon cheaper than a year ago.

The scooter market has ebbed and flowed over the years. When motorcycles enjoyed new popularity in the 1990s, scooters dawdled along. In 1992, there were 18,000 scooters sold in the United States. Five years later, sales had declined to 12,000. But that soon changed, in part as younger consumers in urban markets took a liking to the distinctively styled bikes.

Scooters came into their own
in a decade that saw gas prices gradually rise. By 2006, sales were at 120,000. Last year, annual sales nearly doubled from where they were two years earlier.

And this year, when green transportation is getting attention, scooters seem to have a role.

“We have a product that is right for the times,” said van Hooydonk.

But this year it looks as if scooter sales will slide for the first time in more than a decade.

Dan Dowdy, the owner of Skooters, became a dealer last year after he saw sales plummet at his custom-clothing business. He sold every scooter in his showroom and had 20 other bikes on order for customers.

You couldn’t keep them on the floor,” he said.

Then came the recession, lower gas prices — and a showroom suddenly crowded with scooters. Tightening credit kept many younger customers from buying scooters, and most of the scooters that Dowdy now sells are to customers age 50 and older.

That includes Bob Allison, who last year when he was near 70 bought his first scooter. He recently bought a fancier model, not for any fuel savings, but for the thrill of the ride.

“Freedom,” was his one-word answer when asked why he bought it.

The end of the recession will boost sales, Dowdy said. What is unclear is where gas prices will land. Analysts are divided on whether prices will go much higher this year.

Generally, gas prices need to rise above $3 before consumer behavior is affected. That could happen if a recent prediction by Goldman Sachs comes true and oil prices reach $85 a barrel by year’s end. That possibility is sure to be lurking in consumer minds, said Dowdy, and he has heard more chatter in the last few weeks about gas prices.

“Their memory is coming back,” he said


No comments:

Post a Comment