2025 Motorcycle Market Decline: Examining Trends and Impacts

The 2025 motorcycle market decline is a pressing issue, with U.S. sales down 9.2% as of October 2025 and European sales dropping 7.8% in the year's first half. Contributing factors include the implementation of new Euro 5-plus regulations, economic uncertainty, and higher interest rates, which have made financing more costly. Additionally, tariffs have influenced consumer purchasing decisions, and Harley Davidson's waning market share exacerbates the situation. While there are pockets of growth among certain brands and markets, the overall motorcycle market decline poses challenges that manufacturers must address to remain competitive.

Transcript

Niels: 0:00

Death is not extinguishing the light. It is only putting out the lamp because the dawn has come. Welcome to the Throttle and Roast podcast. I'm your host, Niels Meersschaert. every year, pundits will say the sky is falling and the motorcycle market is done. Often, the numbers do support that thesis. But is the motorcycle industry in a decline, merely stagnant, or is the makeup changing and manufacturers will need to adapt? We'll look at the numbers of the past year, both in the U. S. and Europe. Cover some reasons for the numbers and my thoughts on what this all means. So it's really important for us to look at this really by the numbers, because this is going to give us some indications of what is actually happening, from a fundamental unit sales perspective. So I'm going to start with the American motorcycle market. as of October 2025, the U. S. motorcycle market is down 9.2% from the same period last year. This is looking at year to date. And the first quarter of this year was even worse, down 10.6%, which was the worst since the 2008 financial crisis. So the American market doesn't seem to be doing all that well when it comes down to some of the overall industry statistics, at least from a unit sales perspective. So let's look at the European motorcycle market. Well, the first half of the year saw a 7.8% drop in sales. And the first quarter was even worse with a 16.2% drop versus the prior year's first quarter. Now, by the third quarter, the drop was down to only about 5%, but it's unlikely that the fourth quarter will make up for the rest of the year and see a big boost over the prior year. Now, Italy is still the largest and their sales dropped 3.4%. France dropped 16.3%. Germany is down 16.6%. The U. K. is down 7.3%. one of the few growth stories is in Spain with an 8.1% gain. And this is especially important given that it is the second largest motorcycle market in Europe. new brands like Voge are up 60.9%. Zontes is up 79.1%. And QJ Motor is up 101.9%. show a growth story. But when you start from a small number, the percentage change will always look impressive. So now that we have the basic numbers out of the what are some of the reasons for this? And I'm actually going to invert the order. I'm going to start with Europe first because I think it's in some ways a little bit of an easier explanation of what is happening. Now, the big thing that we have to look at is this year, 2025, was the first year of the Euro 5-plus industry standards. And this has been known about for a number of years, but it became effective January 1, 2025. Now, there is a little bit of an odd quirk in the laws because what this and dealers to do is that they could self-register whatever leftover stock they had that had not been prior to January 1, 2025. And this allowed them to still continue to be sold after 2025, albeit as a technically used model. Now, Europe has a benefit in that motorcycling tends to be more commonly used for transportation than here in the U. S. to stabilize sales, and we may be seeing much more of a transitory dip from the regulation and self-registration aspect. Now, in the U. S., we have a little bit of a different story. I'm going to touch on some things that are, you know, some people may think of are a little bit political, but that's the world that we live in. We have to sort of look at the reality. the first one we have to start with is the pink elephant in the room, which is tariffs. Tariffs, or the threat of them, likely have kept many at home or moved sales to earlier in the year where people would buy the bikes, hoping to get them before the tariffs would take effect. And these broader economic concerns have likely also tampered a discretionary purchase like a motorcycle. Unlike in Europe where more motorcycles are used for basic transportation, here in the United States we tend to be a little bit more of a leisure focus. And so the purchase of a motorcycle tends to be thought of as discretionary. We don't need to do it so people will hold off if they're not really feeling in a very strong economic position. The other thing that is playing a bit of a role into this is that interest rates have stayed higher than recent history, making buying on credit much more expensive. And we've had an awkward period if we kind of look back at it in the really long history of where interest rates were near zero for over a decade. this artificial low cost of money made it such that people were buying everything on credit rather than when they could afford the bike. And therefore that's going to have a dampening effect on buying new motorcycles. the other pink elephant in the room, of course, is Harley Davidson. One of the downsides of being a dominant player in the US motorcycle market is Harley really had only direction to go, which was down. Now in 2024, Harley's market share stood at around 37.3% and now that was down earlier years already. So this is new thing of lowering market share for Harley-Davidson. Yet in 2025, they've already seen a 22.2% drop in sales. And that basically covers almost the entire overall industry decline of about 9%. So when you think of, hey, if I have 37% market share and 22% drop on that 37%, works out to about 8% or 9%. So Harley is pretty much responsible for most of the drop that is happening. the estimates right now for Harley's market share for 2025 are down to about 17%. So Harley really is a large portion of this reduction in overall sales. Now another reason that we're seeing some changes in this, and this is probably more a reason of why it's affecting Harley-Davidson in particular, is that there are some changing tastes. And so globally, adventure motorcycles have become the most popular category. And Harley-Davidson pretty much just does cruisers. Now they do have the Pan-America, so there is a little bit of a, almost a dip of a toe in the water, so to speak, adventure motorcycles. But it's not something they're aggressively pushing. They kind have it out there, but they're not really pushing it super hard. And if we look at some other brands like Kawasaki, Kawasaki actually saw a 23.7% year-over-year increase in unit sales in the United States. Indian motorcycles saw an increase of 7.5%. with a little bit more of a push towards a performance angle, especially with some of the new Power Plus models, which are fully water-cooled. This is giving a full package, if you will, to the cruiser experience. And this seems to be resonating with a larger group of riders. And therefore, Indian may be stealing some sales from Harley, although more likely what you're seeing is a shift to other segments of motorcycling overall. So the big question for Harley is, is it that the typical Harley rider is aging out? Or maybe they're being priced out of buying another Harley because they're such a premium focus. As we've talked about in other episodes, Harley is an average selling price of $30, 000 for their motorcycles. So there's a relatively small percentage of population that can actually afford to get a Harley. And it's really moved away from its working class roots.So one of the other questions is, are turning to other brands, even if it's not a big American cruiser? And finally, one other area that we have to think about of which could be explaining some of the change in sales is really looking at new riders. And we touched on this in an earlier episode, if you go to almost any motorcycle gathering, it's more likely that you're going to have a bunch of gray-haired people than young riders. the question one has to ask is, is it because younger riders choose to ride alone rather than going to these gatherings? So is it more of a cultural divide of doing that? Or are just younger people not riding at all? if we think of Harley-Davidson in particular, as if the owners and riders of that are continuing to age out and they're not being replaced by newer riders, fundamentally what that means is Harley's unit sales each year are just going to continue to go down and down and down. So these are some of the reasons that we're starting to see some of these changes in the market share and the overall market volumes from a unit perspective in the U. S. and in Europe. So what are my thoughts on this? Well, I think the story really depends on your geography. In the U. S., Harley is floundering and being such a large part of the overall market, they take the overall numbers down with them. Now, there are some riders who will only ever ride a Harley and no other brand is even an option for them. we may see Harley also lose some overall volume if they don't start to offer more affordable models. For these riders who are Harley or nothing, they may not have the means to be able to afford the newer models that are so expensive and therefore they'll just keep riding their old forever and ever and ever. so they're diehard Harley fans. But that doesn't mean that they're necessarily bringing more money into Harley coffers with new bikes. But at the same time, one of the problems with those riders is eventually they're going to age out. And so if Harley is not doing anything to new riders, eventually they will run out of people to buy their bikes. this focus on the very high end, while it can make sense if you're targeting maybe the older demographic who has a little bit more disposable income, well, if they age out and there's no one replacing them in that sweet spot, you have no business left. And this to me is, I think, real issue that Harley has to truly address. when we start to look a little bit longer term, I do expect overall sales will continue decrease with Harley Davidson. But as their market share decreases, the impact on the overall motorcycle market in the U. S. will soften. you know, in some ways it sucks for Harley, but for the overall market is it won't feel as horrible for us that the market is softening because it's only really one manufacturer. the thing that I think we have to really look at is things like Kawasaki and Indian, the fact that they actually had an increase in unit sales in 2025 suggests maybe that having the right products matter. And this should be a sign to some of the other brands to say, hey, are we positioning the bikes that the market is actually looking for? Are we maybe going into too high of a price point such that the volume of available purchasers of our motorcycles is so small that we're not going to be reaching everybody? I think this is one of the typical problems with a lot of brands. You have to think always about how do you bring new riders into your brand? Because this is an opportunity. Once you get into a particular brand, the odds of you trying out other brands is harder. And that sort of, you know, embedded viewpoint of a rider who really loves the brand that they started with, if you don't have an offering for them, they're just going to stick with whatever they first bought. And this is really going to hurt some of the more premium brands that are out there. Now, ADV, of course, is the growth spot globally. And here in the United States, of course, it is continuing to grow and accelerate. And it's not just the BMW or the KTMs of this world that are out there. You've got a huge number of Japanese market that's bringing new bikes into the U. S. And they are attracting a large number of riders who are realizing that these bikes are just really great overall bikes. They're fun in the twisties. I don't have to worry about hitting a rough road. I can take them pretty much anywhere. And if I do want to get onto some actual dirt, yeah, they're perfect for it. So people are realizing the every use that you can take advantage of these bikes. And that's bringing more and more people into the fold with those bikes. Now, Harley does have the Panamerica. But the problem is, is that it's not necessarily appealing to their traditional buyers. And they're not really converting other brands' riders over to them. I think in many ways, Harley's just not even really focusing on marketing the Panamerica in any sort of meaningful way. most recent thing I saw of it was, oh, they had a CVO. So again, they're trying to go that up market. And that's great. But is that really the thing that's going to bring more people in? Like, are you truly going to get someone who was a BMW 1200 or 1250 GS rider to suddenly say, hey, I'm going to leave BMW and go to Harley-Davidson with the Panamerica because now they have a CVO? I don't think that that's really a likely situation. Harley does have to figure out how to deal with the fact that the traditional cruiser buyer is maybe not as prevalent as it once was. And think of either, A, they're going to continue to produce those bikes, get them into a more affordable price point, or figure out how to make some other segments of motorcycling available and make them appealing to other brands' riders. The other big thing in the U. S. is some of these broader economic factors. one of the things that's really frustrating for both people who are looking to buy something as well as for the manufacturers is, we've had, quite honestly, a little bit of this tariff flip-flop. You know, the tariffs are announced. They're insanely high. People get freaked out about it. And then, oh, yeah, yeah, we're going to bring those back. So, like, this flip-flop back and forth is not really helping the situation. And it's creating some pause in terms of riders. So if I go and buy a bike right now and it has a 25% tariff, but then, hey, in three weeks' time, it might be down to a 10% tariff. Which am I going to do? Am I going to wait or am I going to buy it then? This is part of the problem is all it's going to do with uncertainty is cause people to say, you know what, I'm not doing anything right now. And that is a big part, I think, of what's happening into the market. Now, the second thing is you know, we have to look at the other economic factors that play in. For example, just recently, there were 30,000 people were going to be laid off from was the fact that they're doing it, yes, some people, yes, they will blame AI to a certain extent and say, hey, we're getting all these efficiencies from it. And I think this is what a lot of corporations are saying right now. AI has some potential for it, but it also has some downsides to it. Sort of more of a way of them admitting or trying to create a justification for the massive investment into AI is to sort of suggest that they're able to reduce some of these other expenses because of it makes them look good to a stock market perspective. But I think there's another trend that might be part of this, which is it may be that we are already in a recession or nearly in a recession, and this is also going to have an impact onto the buying public of whether they are comfortable spending their money onto a motorcycle, which may actually end up being a sort of discretionary purchase because we mostly use them for leisure here in the United States. Now one potential bright spot for us, and this might be something that starts to turn this around a little bit, is recently the Fed interest rates by another quarter point, and this could help with loan payments and could start to stem a little bit of the increased unemployment that we're seeing, but my hunch is that it's going to probably get worse before it gets better. And we're coming into the winter season, and this is not when a lot of people are going to be buying motorcycles anyway. the timing is such that it's great for now to have that, but we have to see what's going to happen in three to six months' time when we get past the winter and people start thinking about buying and riding again as the winter passes, Now, if we switch to Europe, I think it's a little bit of a different story. Europe, if we look at the unit sales over the past five years, they've just had continued year-over-year just been a really phenomenal story in Europe of just continuing to have more and more bikes sold each year. Now, Euro five likely had a major on the change in 2025 versus 2024, but what that probably means is that we got a larger number of sales that were credited as 2024 by these self-registrations, for example. self-registrations, for example, then we would have otherwise and therefore it made 2024 look arbitrarily higher than it would have otherwise and therefore drop in 2025 is looking bad in comparison. But if we kind of normalize out over those several years, it's probably not as big of a deal. So I'm less worried, quite honestly, about Europe of the slowdown in overall sales because realistically, Europe is still a major market. most new motorcycles produced today, oftentimes they are built to European standards. So they're following, for example, Euro five plus is what manufacturers are producing their bikes for. And then what we get in the U. S. just happens to match that because they're not going to make a special version for us here in the States. So Europe really is in many ways a lot of the driving force for a lot of these bikes. Now, Asia, of course, is its own story. There's far more bikes sold in Asia, but they will oftentimes tend to be more in the smaller capacity range. But if we think of more of that, even though it seems bizarre that midsize bikes are 800cc when in the 70s that was a huge bike. But here's where we are. That's the that's the real truth of it. And Europe has a better mix of leisure to transportation doesn't mean motorcyclists in Europe don't ride for fun. They absolutely do. But you're more likely to find riders who ride even just as their basic transportation than you will in the United States. And this means that motorcycles will tend to be less cyclic than they are in the U. S. market. For example, as the U. S. economy slows people are going to decide, you know, I'm not going to buy that discretionary product like a motorcycle. Whereas in Europe, yeah, they still need to have a vehicle that will get them to and from work or errands or whatever. So there there's a little bit more stability inherent in the European market, at least when it comes to motorcycles. Now, I expect in Europe next year there'll be a little bit of a better story as there's not going to be any new emissions changes. And we can actually then fully compare a full year of Euro five plus and then start to see like, what is the first quarter show of 2026 versus 2025? And I think what we'll see less of that dropping continuing on. It may be flat, you know, if the economy slows down, but I think we won't be quite as frightened as we may appear looking at the raw numbers in Europe. So we covered some of the overall market numbers, both in the US and in now both geographies are down about 8% to 10%. We also looked a bit deeper into those numbers and found that Europe had had the Euro 5-plus impact, which could have caused that bump in 2024 sales, making 2025 look worse. But it's because 2024 was just artificially increased. meanwhile in the US, Harley is dragging the overall industry down. And then I shared some thoughts considering all the factors and how the US economy is likely another big factor in why unit sales in the US are where they are. So my question for you this week is, have you bought a new bike in 2025? And why or why not? Share your thoughts through the text-to-show link in the show notes or leave a voicemail at throttleandroast.com slash voicemail. Thanks for listening. I'll talk to you next week.