What Does the Motorcycle Rental Market Look Like Right Now?
As of 2020, the global motorcycle rental market is worth an estimated $193.4 million. The majority of that value comes from the two largest global economies in the United States and China.
In 2020, the United States motorcycle rental market alone was worth $52.2 million, with China still emerging as a marketplace with a significant upside. Especially considering the losses many motorcycle companies are taking in 2020 due to low sales and high costs, the secondary market seems to be becoming a major center of revenue and value in a way it has not before. For instance, the American motorcycle brand Harley-Davidson has seen some significant losses forcing the company to completely overhaul its business structure. In their most recent quarterly report, the company took in a devastating $92 million loss, which caused a whopping 9% slide in the value of their shares on the day the report broke. When looking at the same quarter from 2019, Harley-Davidson had posted $195.6 million in profits, so the drop off has been stark. As a result, the company is reducing its portfolio by 30%, cutting 700 positions, and refocusing production and sales to profitable bikes for the United States, where it continues to slag.
As a whole, motorcycle revenues have dropped drastically in 2020, down to $669 million, a 53% slide. However, even as revenues for retail motorcycle sales fall apart, the desire to ride one in recreation or for utility has not, thus leading to some extremely positive expectations for the future of the rental industry.
Future Outlooks on the Motorcycle Rental Market
Two major estimates for the future of the market were recently published, one with more conservative estimates and one with a shorter scope and higher growth per year. On the longer-term conservative scale, the motorcycle rental market is expected to reach $265.9 million by the year 2027. This would translate to a compound annual growth rate (CAGR) of 4.7%. Breaking this down into the two major segments of the rental market, commuter bikes will have a CAGR of 5%, eventually making this section of the market alone worth $96.7 million.
With the effects of COVID-19 taken into consideration, the growth of the luxury motorcycle rental segment was adjusted down to a 4.7% CAGR. China’s emergence as a major consumer for this market will finally result in a value of $55.6 million by 2027, with a 7.6% CAGR. Other notable areas of growth worldwide include Japan, Canada, and Germany, which have compound annual growth rates of 2.6%, 3.7%, and 3.3%, respectively.
In a more aggressive prediction with a scale of only four years instead of seven, projections have a CAGR of nearly 10%. This would lead to incremental growth in the market of a whopping $168.2 million by 2024.
Despite the negative economic impact that COVID-19 has had globally, and even specifically on sales for motorcycles, the motorcycle rental market is set to expand significantly over the next few years. In fact, the lowered sales for motorcycles may be a contributing factor for the many people who do want to ride or use a bike without having to pay exorbitant prices for one, not even including insurance and upkeep costs. As China bolsters itself for increased demand and availability, even adjusted rates due to the global recession and pandemic see extremely optimistic future outlooks.
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.