January 5, 2012

RSA’s recent decision to quit the motorcycle insurance market surprised hardly anyone. Like an underwhelming lover weary from thankless endeavour, RSA took the view that “Acknowledging our relatively small scale, we reluctantly concluded that it was the right time for us to withdraw.”

Clearly, RSA is not the biggest insurer in the world; but what they probably meant in this context was that they don’t insure that many bikes. Odds are they won’t be alone in this for long, because bike populations are declining alarmingly right across the British Isles.

What could be behind the British public’s sudden lack of enthusiasm for bike ownership? Bankstone News’ senior undercover bike sales reporter offers the following analysis.

In a nutshell, falling bike sales are down to no one having any money. In a slightly more capacious nutshell, contributory causes include: mass youth unemployment hitting moped sales, nosediving consumer confidence sapping purchase-making resolve, rising expenses and falling bonuses and overtime among all but the City-banker segment of the population, a strong Yen making Japanese bikes more expensive, continuing Pound-to-Euro weakness keeping exports of new and used bikes flowing freely, increasing challenges involved in taking and passing bike tests, etc. etc. etc.
 
On the way into the current recession it still seemed reasonable to assume that people working in policing, the forces, and the civil service – a major component of the traditional bike-purchasing community – would still have jobs coming out the other side. Now it doesn’t. Many such individuals have real concerns about job security and aren’t looking to splash out on a second vehicle, however economical.

Unskilled workers once used cheap bikes to commute to their warehouses and building sites. But they were the first to lose their jobs as the recession began to bite. Temporary workers are also having a tough time.
 
But if the less well off are struggling, it seems some people are still not short of a bob or two. Luxury shoes and hangbags are selling better than ever. High street retaillers may be dropping like flies, but John Lewis had a very good year and Harvey Nichols are making a mint, with the Champagne bar leading the way. Thos Cook is up the creek, but sales of exotic adventure holidays are booming.

By the same token, Triumph sales are well up, as the market becomes increasingly polarised between quality/luxury brands at one extreme and dirt-cheap Chinese and Indian scooters at the other.

Gone are the days when Mum and Dad could say here’s a grand, go out and get yourself a car. Even if young people can afford a car, insurance premiums look increasingly prohibitive. A low-cost two-wheel Far-East import is often the only alternative for those lucky enough to have a job to get to.

In the meantime the mid-range market has virtually evaporated. Like the brain-scarring image of a sweatily bulky Britney Spears gurning and squatting in an ill-fitting basque, it’s the dreaded squeezed middle all over again.


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