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Motorcycles become economic accelerator

There were 3.3 million bikes on the road last year, up from 722,000 in 2006

The number of motorcycles on Mexico’s roads has increased almost fivefold over the past decade, accelerating growth for manufacturers and retailers of the two-wheelers.

There were 722,000 motorcycles in circulation in 2006 but that figure reached 3.3 million last year, data from the National Statistics Institute shows, meaning that while there was only one bike for every 10 cars on the road a decade ago, that number has now jumped to three in 10.

Experts cite traffic congestion, fewer regulations when compared to other vehicles and low prices as the main factors driving the increase of motorcycle sales.

The main beneficiary of increased demand is Italika — Mexico’s leading motorcycle brand and manufacturer — although others such as Vento and retailers that even include Telmex, which sells Carabela and Islo motorcycles in its retail outlets, have also benefited from the growth.

Imports have also risen, particularly in the past two years, with the United States and China being the two main source countries.

Italika, a subsidiary of financial and retail corporation Grupo Elektra based in Toluca, Estado de México, has an estimated 60 to 70% market share in the country with sales that exceeded 430,000 units in 2016.

“We have identified four areas of motorcycle use,” Italika general manager Alberto Tanus explained.

“Transport, work, recreation and sport. The bulk of the market is concentrated in the first two and the majority of riders in this segment in Mexico are men aged between 18 and 40.”

The company increased its capacity by adding a fourth production line at its factory in June in response to the increasing demand and Tanus expects that growth will continue because it is meeting the “basic need” of mobility.

Other factors that may have contributed to the spike in motorcycle ownership include lengthy commutes and higher prices on often-crowded public transportation and rising gas prices.

Mexico City residents — where 9% of motorcycle owners live — spend an average of 88 minutes each day on public transit, according to a global report by Moovit, placing it behind only São Paulo, Brazil, and Bogotá, Colombia, in Latin America in terms of commute times.

A liter of gas currently costs around 16 pesos, almost double the 2010 price, for which reason a divisional manager at Vento expects sales to keep going up.

“One of the factors that makes us think that motorcycle sales will continue increasing in Mexico in years to come is the high cost of gasoline,” Jesús Rodríguez said.

A new Environment Secretariat norm will soon make it mandatory for motorcycles in the Mexico City metropolitan area to comply with emissions standards but Rodríguez doesn’t see it having too much impact on sales.

“We could see a decrease in sales,” he conceded, “but in the end the consumer will continue choosing this means of transport as it is perceived as having a better cost-benefit in [terms of] transportation expenses.”

An Italika bike retails for between 16,000 and 32,000 pesos (US $900 – $1,800) depending on its specifications while Vento sells its motorcycles for similar prices, between 20,000 and 30,000 pesos.

Source: El Financiero (sp)

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