2017 Number crunching: Winners & Losers
Global industry outside Japan sales figures for the previous year
Now is the time of year when manufacturers around the world crunch numbers and claim to be winners or admit to being losers – or something in between. Here’s a roundup of how most of the major manufacturers outside Japan fared in 2017.
KTM Industries AG - 17% increase in sales for 2017, with a record 238,334 units sold
Austria’s KTM Industries AG remained Europe’s No. 1 in terms of overall units sold in 2017, which saw the company achieve a seventh consecutive year of record sales, with an all-time high in revenues and profit.
In its figures for the 2017 financial year announced on January 29, KTM’s yearly revenues over 2016 were up 14% at Euro 1.533 billion, with EBIT (operating earnings before interest and taxes, but after depreciation) 8% higher at Euro 132.5 million in the last 12 months, against Euro 122.3 million in 2016. The preliminary net profit before taxes increased to Euro 117.0 million, against Euro 108.9 million the previous year.
The company says it sold 238,334 KTM and Husqvarna motorcycles in its 2017 business year, to “further strengthen our Number 1 position as the biggest motorcycle producer in Europe”. Unit sales increased by over 17% compared to the previous year, driven by increased demand not only for its core Austrian-made products, but also the smaller capacity models built in India by its business partner and 48% investor Bajaj Auto, which according to sales data from Indian industry watchdog SIAM, sold 35,000 KTM motorcycles there alone in 2017, in addition to exporting CKD kits for assembly in other countries from Brazil to Malaysia.
To support further growth KTM management invested Euro 92 million in product development last year, including tools and machinery, with investments in plant and infrastructure focused on the new high-performance drivetrain production facility at Pankl, and in the expansion of the R&D department at KTM’s home base in Mattighofen. The KTM Industries Group financed the entire overall investment programme amounting to Euro 179.6 million from its own cash flow, leaving a further free cash balance of approximately Euro 5.8 million. As part of this strategy, KTM’s suspension supplier the WP Group has now been fully integrated into KTM AG “in order to realize synergy potential”.
Thanks to this ongoing growth, KTM recruited 818 additional employees in 2017 (652 of them in Austria), taking its overall directly employed workforce to 5,887 people worldwide, including 4,568 in Austria. The company says that for the 2018 business year KTM Industries Group expects further organic growth in its core model segments With the market launch in April of Husqvarna's first modern-era street motorcycles (the Vitpilen and Svartpilen) and the imminent debut of KTM’s first parallel-twin range of models starting with the 790 Duke, management is stated as expecting to remain on track for continued growth in 2018 and beyond. The company says it aims to sell 360,000 motorcycles annually by the 2021 business year (against its previous forecast one year ago of 300,000 units), with 400,000 machines envisaged for 2022.
Part of this increased volume will come as a result of the joint venture agreement which KTM recently concluded last October with its pre-existing partner CFMoto in China, in order to continue expansion of KTM’s presence in the Chinese market. The new business, known as “CFMoto-KTMR2R” because of copyright issues with the KTM name in China, is 49% owned by KTM, and is currently awaiting approval by the Chinese authorities.
BMW Motorrad reports a seventh consecutive all-time sales high
BMW Motorrad has reported that its 2017 worldwide deliveries of motorcycles and scooters increased by 13.2% in the 2017 calendar year to 164,153 vehicles (versus 145,032 units in 2016), thanks to strong sales growth in Europe and Asia. With these new record annual sales, BMW Motorrad takes another step towards reaching its stated objective of delivering 200,000 units in the year 2020.
Germany is once again the largest single market for BMW motorcycles and scooters, with 26,664 units sold there in 2017, a 7.1% increase over 2016 which allowed it to remain the market share leader in its home country. Indeed, the company’s strongest sales upsurge in 2017 was recorded in Europe as a whole, with record growth which saw around 15% more vehicles delivered there than in 2016. This was driven mainly by France (16,607 units, up 24.3%), followed by Italy (14,430 units/17.3%), Spain (11,193 units/17.6%) and the British Isles (9,550 units/8.7%)
Stephan Schaller, outgoing General Director of BMW Motorrad, stated: "2017 was another very successful year for BMW Motorrad. We achieved a sales record for the seventh time in succession. The 2017 sales figures once again show that our motorcycle strategy is taking effect. And we have a great deal planned for the coming years. We will continue to consistently pursue our current model initiative in the premium segment. We will expand our product range with emotional and innovative new products in 2018, too. The new middle class GS models are already under way, and further great products will follow. BMW Motorrad is looking into the future with great confidence." It was announced last September that Schaller would be leaving BMW Motorrad to join Voith GmbH, a German-based global technology company whose reins he will take over as President/CEO in April 1, 2018. No successor to him has yet been appointed by BMW.
For the first time in BMW Motorrad's history, more than 50,000 units of the two R1200GS and GS Adventure dual-purpose models alone were sold in 2017, as sales of all of the traditionally strong-selling flat-twin Boxer models increased significantly overall. Thanks to the three new R nineT models, the Pure, Racer and Urban G/S variants, sales in the Boxer segment rose by 9.6% in 2017, to a total of 86,090 motorcycles. The BMW S Series sportbike models saw 21,752 examples sold worldwide, while BMW’s new sub-500cc capacity segment made a strong debut, with 11,595 units of the G310R and G310GS models – which are built in India by BMW’s partner TVS and were introduced in 2017 - already delivered to customers by the end of the year, with demand reported to be strong in Europe, South America and Asia..
Sales of the German manufacturer’s six-cylinder models also developed positively, with the K1600 Bagger aimed at the US market selling well in its debut year. Timo Resch, BMW Motorrad Head of Sales and Marketing, stated: "With 6,719 units sold and a 50% increase in sales, our six-cylinder models are among the big winners of 2017. After Germany, the USA will remain an important market for BMW Motorrad in the coming years. We expect to see further growth in sales for our vehicles in 2018, too. We are looking forward to the positive impulses generated by the launch of the completely new F models, the F750 GS and F850 GS, as well as the much anticipated C400X midsize scooter. Expanding our urban mobility product range is a key topic for the future of BMW Motorrad."
Piaggio unit sales up 12.4% in Q3 2017
Italy’s Piaggio Group has not yet published its full year results for 2017, but its third quarter sales figures as at September 30, 2017, demonstrated an upward trend for the Italian scooter specialist.
Overall consolidated net revenue of Euro 1.141 billion for the first nine months of last year represented a 2.5% increase over the Euro 1,032 million of the same nine-month period in 2016. Group EBIT (earnings before interest and taxes) for that 2017 period was Euro 69.1 million, up 14.3% against the Euro 60.5 million of the previous year. Pre-tax profits were Euro 44.1 million, an increase of 31.2%, and Piaggio made a net profit of Euro 25.1 million (+31.2%) in selling a total of 426,700 vehicles worldwide, against 411,700 units in the first nine months of 2016. Of those, 299,400 units were powered two-wheelers, up 12.4% versus 266,400 units in the same period in 2016. This generated net sales of Euro 771.8 million, an improvement of 5.7% against the Euro 730 million nine-month total the previous year. Piaggio says it has “maintained its leadership of the European two-wheeler market” with a total market share of 15.2% of the scooter sector, up 25.4% year-on-year.
In the first nine months of 2017, the Piaggio Group made investments of Euro 55.6, of which 35.2 million euro were for R&D costs (35.5 million euro at 30 September 2016). The total Piaggio Group workforce numbered 6,940 employees as of September 30, 2017, of whom 3,492 were in Italy, a number substantially unchanged from one year earlier.
Piaggio says it maintained a particularly strong presence on the North American scooter market, with a 20% market share, and that it’s also committed to strengthening its position in motorcycles in North America. In the Indian two-wheeler market, the Group more than doubled its sales volumes from the year-earlier period, thanks to the introduction of the new Aprilia SR150 scooter and the Vespa brand’s ongoing strong performance as scooter sales grow strongly in India.
The motorcycle sector of the Group also made “great strides”, according to Piaggio, albeit without the company producing any sales figures to back this up, unlike with its scooter products. Supposedly, the Aprilia brand saw an increase in sales, in particular generated by the naked Tuono V4, the new Shiver 900 and Dorsoduro 900 (launched in June 2017), and the new 125 RS and Tuono, launched last April. Moto Guzzi saw “a positive sales trend of the V7”. But Piaggio’s continued reluctance to reveal specific sales figures for its motorcycle brands only encourages suspicions that these in fact continue to be disappointing.
Triumph records best sales for 30 years
Triumph Motorcycles recently announced its financial results for its last fiscal year ending June 30, 2017. Now operating in more than 57 countries across the globe, Triumph increased global revenues by a hefty 22% or £90.9 million to £498.5 million in that year, against £407.6 million one year earlier, with net profit before tax increasing by £8.1 million or 46%, to £24.7 million. This came on the back of a substantial lift in sales, from 56,253 motorcycles in the previous year to 63,404 units in 2016/7, and 86.1% of those were sold outside Triumph’s UK home market, compared to 85.3% the year before.
Research and development costs also rose to £29.2 million in the past fiscal year, up from £26.9 million in 2015-6, with a non-equity partnership with Indian manufacturer Bajaj Auto (49% equity holder in KTM) for the development and manufacturer of smaller-capacity motorcycles recently unveiled. Meantime, Triumph’s wholly-owned Indian subsidiary created in November 2013 sold some 1,300 bikes in 2016-17, taking the local sales volume to around 4,500 units sold there in the four years since it was set up.
Triumph has thus performed strongly In the face of challenging economic conditions and currency fluctuations, including the ongoing Brexit uncertainties, and has maintained its investment in R&D, to further the continuous improvement of its models. It’s launched five new motorcycles in the last 12 months, including the 765 Street Triple, the Bonneville Bobber Black, the Bonneville Speedmaster, and the Tiger 800 and Tiger 1200 adventure bikes, with the revised Speed Triple also due to reach dealer showrooms shortly.
With the deal to replace the four-cylinder Honda CBR600RR engine with a race-tuned 160bhp 765cc three-cylinder motor as the control engine for GP racing’s Moto 2 class in 2019 likely to throw further spotlight on Triumph Motorcycles, the future is looking good for the British manufacturer. It also opened a £4.0 million free to enter Factory Visitor Experience at its Hinckley base, which includes a museum charting the history of Triumph, as well as an opportunity for fans and enthusiasts to take a tour of Triumph’s manufacturing plant to see Triumph motorcycles being built.
Triumph Motorcycles has also announced a diversification plan starting with a limited edition run of 500 high specification all-terrain bicycles to be known as the Triumph XCX.
Ducati flat-lines, with 55,871 motorcycles delivered in 2017
VW/Audi-owned Italian sportbike manufacturer Ducati has revealed that it delivered 55,871 bikes in 2017, a modest increase of just 420 units over 2016.
Nevertheless, Claudio Domenicali, CEO of Ducati Motor Holding, has declared that “2017 was another great year for Ducati, both commercially and racing-wise. We battled it out for the MotoGP title all the way to the last race, won six GPs and brought home the best results since 2009. Continuous renewal of the product range, and a strong focus on creating motorcycles of the utmost quality, has allowed us to keep on growing despite the problems affecting the world market.”
Bologna-based Ducati says that in 2017 each model in the range played its part in achieving that sales result, with the new Multistrada 950 adventure tourer proving particularly popular. The Monster family also enjoyed healthy sales, as did the SuperSport and the exclusive 1299 Superleggera, all 500 examples of which were purchased at a price of Euro 80,000 each even before they went into production. The Scrambler range continues its success of the previous two years, says Ducati, with the addition of the new Desert Sled and Café Racer vaariants reinforcing the range of such models on offer. A total of 14,061 Scrambler bikes was delivered in 2017.
Ducati’s Italian home market was particularly buoyant, with 8,806 motorcycles delivered in 2017 for a 12% growth. This upward trend was evident across Europe, where Ducati increased overall sales by 4% to a total of 31,123 units. The Italian manufacturer gained ground especially in the Spanish market, with sales up by a substantial 28.3% there. By contrast, the USA saw deliveries up by just 1.3% in a shrinking overall market, with sales there totalling 8,898 units, so that it narrowly remains Ducati's biggest market, ahead of Italy. In Asian markets Ducati delivered a total of 5,805 bikes, also strengthening its position in China (up 31%) where the dealership network doubled in size from 9 to 18 sales outlets.
Although its 2017 results essentially showed it marking time, Ducati believes it can look to the future with confidence, with its 2018 product range promising to be even more competitive, and innovative. As a direct offshoot of the V4 Desmosedici racer used in MotoGP, the newly launched Panigale V4 is the first Ducati volume production model to be powered by a four-cylinder engine, as a consequence of the largest R&D investment the Italian company has ever made in a single product. The forthcoming new Ducati Scrambler 1100 adds a larger capacity dimension to the Scrambler range, combining greater performance with lifestyle cool. Additionally, the 2018 Multistrada 1260 takes the technological evolution of the Multistrada to the next level in the sport touring market, with the renewed 821 Monster and the 959 Panigale Corse completing Ducati’s new models planned for 2018.
In other news Ducati announced a collaboration with Rizoma for the production of an exclusive range of special parts for Ducati models, while the company has also confirmed that its 10th World Ducati Week (WDW) will be held in Italy on July 20–22 at its usual venue, the Marco Simoncelli Circuit at Misano Adriatico.
Harley-Davidson shuts down two factories thanks to an 11.1% drop in Q4 US sales
In response to its disappointing 2017 full year results announced on January 30, Harley-Davidson is to reduce future manufacturing capacity by closing two of its factories in what it describes as “Manufacturing Optimization”, entailing a total net loss of around 500 jobs, while pointing to “progress in building riders” and expanded product development through increased investment in Electric motorcycle technology.
The Milwaukee-based company has revealed that its total net income fell 82% in its fiscal fourth quarter to $8.3 million, compared with a year earlier. Earnings per share were 5 cents, down from 27 cents one year earlier in spite of increased revenue of $1.23 billion, up from $1.11 billion. This came in spite of an 11.3% increase in sales in Q4, with 47,198 motorcycles shipped in the period, against 42,414 one year earlier.
But Harley’s worldwide retail motorcycle sales fell by 6.7% year-on-year in 2017, to 242,788 units compared to 260,289 bikes in 2016, with domestic US retail sales down 8.5%, while international retail sales fared slightly less negatively, with a 3.9% reduction to 94,816 units sold in countries outside the USA, versus 98,631 bikes in 2016. However, Harley sales were down year-on-year in every single geographic area in which the company markets its products. The closure of its Kansas City assembly plant announced in consequence of this is expected to cost 800 direct jobs there, partially offset by a 400-person scheduled increase in the workforce at its York, Pennsylvania plant, where all Harley-Davidson final assembly operations will take place in future. The other company-owned plant to close is Harley’s New Cast Alloy wheel factory in Adelaide, South Australia at a cost of a further 100 direct jobs.
“The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint, and the appropriate capacity given the current business environment” said H-D’s President/CEO Matt Levatich. “Our actions to address the current environment, through disciplined supply and cost management, position us well as we drive to achieve our long-term objectives to build the next generation of Harley-Davidson riders globally. We finished 2017 with over 32,000 more Harley-Davidson riders in the US than one year ago, and we delivered another year of strong cash generation and cash returns to our shareholders.” He reiterated the company’s focus on training “the next generation of Harley- Davidson riders globally”, and confirmed that it had opened 57 new international dealer outlets in 2017. Indeed, Harley is on record as expecting more than 50% of its future sales to be outside the domestic US market within ten years from now.
The company has also announced it’ll step up its research in EV/electric vehicle technology, and plans to have its first E-bike model on sale within 18 months, presumably based on the Slingshot prototype that’s toured the world in the past two years. “The EV motorcycle market is in its infancy today, but we believe premium Harley-Davidson electric motorcycles will help drive excitement and participation in the sport globally,” says Levatich. “As we expand our EV capabilities and commitment, we get even more excited about the role electric motorcycles will play in growing our business.”
For 2018, Harley-Davidson has disclosed that it anticipates full-year motorcycle shipments to continue to fall in company with the US overall two-wheeled market, with sales of approximately 231,000 to 236,000 motorcycles for the company in the current calendar year. It also expects its full-year 2018 operating margin as a percent of revenue to be approximately 9.5% to 10.5% including manufacturing optimisation costs of $120 to $140 million, primarily to support the plant shutdowns.