Argentina. In Q1 2020 the motorcycles industry at the lowest level out of last 25 years

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Argentine Motorcycles Market
Gilera Motor

Argentine Motorcycles Market ended the first quarter 2020 at the lowest level in the last 20 years, keeping the awful trend taken in the previous two years, hit by the economic crisis. Considering the persistent negative outlook for the rest of the year, we fear the bankrupt for the local manufacturers in case the government will not sustain the industry.

 

2020 Motorcycles Market Data & Outlook

The financial and economic crisis which invested the country in the last two years have severely hit the motorcycles industry with sales and production dropped down.

The trend was again negative in the 2020 with sales declined by 38.4% and 34.4% respectively in January and February. In March, the country was still not influenced by constraints due to the fight against Covid19, which was not yet addressed with strong actions. However, sales kept declining with the monthly sales at 19.774 (-38.8%), ending the first quarter at the lowest level out of the last 20 years, with only 67.954 sales, down 37%.

The worst have to come and the projection for the rest of the year are further more negative with the risk that the several local manufacturers to be pushed in bankrupt, if the Government will not put in place an effective plan to sustain.

Indeed, full year 2020 sales are foreseen at 199.605, less than the 30% of 2012 sales level. As far as the recovery, our research team is not optimistic like for European countries, considering the weakness of the country and the uncertain about the actions that the government will be able to take.

 

In 2019 motorcycles sales dropped 44%

According to data released by the Argentine Minister of Infrastructures and Transportation, the Argentine motorcycles market established several record in the 2019, but all in negative.

Recent years history has been already full of upside down performance and since the all time record scored in the 2012, few units below the 700.000 units, the market felt down at 465.329 in the 2015, the re-born up to 693.000 in the 2017 and then fall again in the 2018, at 578.749, and then down at 325.312 in the 2019, losing 43.8% from the previous year. 

In 2019 Argentina was the worst motorcycles market in the World (considering the Top 50 markets) as year-on-year score and the sales level was the lowest out of  last 20 years. Within the Latin America region, Argentina was overtaken by  Colombia  while Peru  which is now very close, despite a not positive trend.

 

Best selling Brands

As far as regard the competitive landscape, after having conquered back the leadership in the last months of 2018, the Japanese Honda is now creating a huge gap over all the others competitors, ending the 2019 with 81.664 sales (-29.5%), the less negative score among the top 5 brands.

In second place the local brand Motomel, which overtook Zanella by few units, selling 46.760 units (-40.6%), holding 13.5% of market share.

In third place the other the local manufacturer, Zanella, which was leader for 8 consecutive years before to lose the head of the market in 2018. Actually Zanella struggles losing 60% in the 2019 with 40.399 units sold.

In the 2018 Zanella has celebrated the 70 years from the foundation. Originally an assembly company for auto produced by Peugeot and Fiat, entered the motorcycles sector at the end of the ’50 of last century, affirming their products as leader in the domestic market and exporting in the entire South America. Zanella was market leader in Argentina between the 2010 and the 2017.

Looking back at the ranking, in 4th place there was Corven Motors with 39.991 sales (-37.3%) followed by Gilera with 24.990 (-33.4%), Keller with 23.521 (-10.5%) and Yamaha with 21.767 (-56.3%). 

In the market there are over 50 brands, including the Indian Bajaj Auto, actually in 9th place, and Hero, in 19th.

Since 2017, the premium brand segment is led by  KTM which sold 2.679 units in the 2019, down 16.5%.

Argentine Motorcycles Market
motomel M8

Is Honda reducing Argentina investments?

Honda Motor de Argentina S.A. that produces both automobiles and motorcycles will cease production of automobiles in 2020. Honda plans to use the additional production capacity for manufacturing motorcycles like its Supercub. The Campana, Argentina based factory employed approximately 1,000 people and produces approximately 148,000 motorcycles per year

Whether motorcycle production would remain the same, be ramped up for existing or new models is unclear. However, Honda’s website claims that the Campana factory currently produces its Biz 125 and Wave 110 models. Super-cub models made up approximately 40% of that total production which include also  9,111 Biz 125s and 47,473 Wave 110Ss. That means 60% of its production went to other motorcycle models. Unfortunately, Honda does not say which other models the factory produces and how the mix will change next year.