Changing the Local Landscape

MANILA, Philippines - For the first time in six years, motorcycle sales in the Philippines registered zero growth. A little over 300,000 motorcycles were sold from January to May this year which approximates the sales figures achieved last year. The zero growth has prompted motorcycle manufacturers to quantify if they can actually achieve their sales target of 850,000 motorcycles for 2009.

The zero sales growth can be attributed to the global financial crisis that changed the spending habits of Filipino consumers, especially the recipients of Filipino overseas workers, who saved more and bought less. Some buyers deferred their plans to buy a motorcycle after the gas prices went down while others focused their financial resources on necessities instead of luxuries.

Tremendous Growth Potential

However, the zero sales growth shouldn’t be a cause for alarm since traditionally, motorcycle sales normally spikes up in the last quarter of the year. Many industry players are confident that they may even be able to hit this year’s target because of the increasing needs for transportation and personal mobility.

There are now more than 4 million motorcycles running around the country and roughly 724,000 units were sold in 2008 and more than 675,000 were sold the year before. With the Filipino population now hovering at 91 million, our people-to-motorcycle density ratio is currently 23:1, which means that for every 23 Filipinos, only 1 owns a motorcycle.

Comparing this figure to our ASEAN neighbors, one out of 11 Indonesians own a motorcycle while in Vietnam, one out of 7 Vietnamese owns a motorbike. In Malaysia, the ratio is 4:1 while in Thailand, one out of three people is a motorcycle owner. What all these means is that the Philippine market still possesses tremendous potential for growth in motorcycle sales.

Changing Consumer Tastes

Motorcycles manufacturers recognized that while the growth potential is still high, the tastes of the local buyers are also changing. Last year, the focus was on sport underbone models which feature a faux fuel tank where the step-through gap used to be. Kawasaki took the initiative and introduced the Fury 125. Yamaha took a different approach and introduced a stylized business model, the YBR-125G while Kawasaki countered with a sporty model, the Rouser 200.

Suzuki stuck to its guns and came out with the Suzuki Raider Breed and they recently introduced their big bike models, the Intruder 1800 cruiser, Hayabusa 1300 GSX, B-King 1300, GSX-R1000, GSX-R750, GSX-R600 and the V-Strom. While these three Japanese manufacturers are enjoying increasing market shares because of their initiatives, Honda remains as the market leader.

Taiwan brand Kymco Philippines is once again in the limelight with the 125cc Super 8 while compatriot SYM introduced their price-leading underbone, the Bonus X 110. Two local nationalistic companies, MCX Motor Philippines and Blaze Motortech Corporation, are making themselves as truly Filipino companies while Chinese bike maker Motorstar continues to be endorsed by boxing great, Manny Pacquaio.

On the Rebound

Sales of underbone bikes dominate the market and business models are still steady while scooters are staging a comeback by grabbing 2.5 percent of the market from 1.5 percent a year ago. Italian scooter maker Piaggio will re-enter the market through the Autohub Group of Willy Tee Ten, which can bring about renewed interests in the Vespa and other scooter models. Scooter enthusiasts are hoping that the higher purchasing power of the youthful call center workforce will sway them towards these highly stylish two-wheelers to further grow the market.

On the road, motorcycles now crowd intersections under the red light. “Biker-friendly” is the new buzz word among government officials, legislators, and business people. Parties and shows like Biker’s Nights and MotoFietas are being held for bikers and local media coverage about motorcycles is increasing. Riding safety and compulsory helmet use are in, as are designated motorcycle parking areas in commercial establishments. Ayala Malls even had their parking areas at the glitzy Glorietta remodeled and rearranged to accommodate motorbikes.

The changes are geared towards the general public’s acceptance of motorcycling as a growing part of the Filipino culture. Motorcycling will continue to change the landscape of the Philippine roads in the years to come.