JAMA - February 8, 2007

1. Total Demand for Motorcycles

   In recent years the motorcycle environment in Japan has benefited from a number of initiatives, including the lifting of the ban on tandem riding on expressways, the establishment of a new automatic-transmission motorcycle driver’s license category, and the launch of an electronic toll collection system (ETC) for motorcycle users.  Negative factors include the youth population’s demographic decline and the corresponding slowdown in licenses issued in the Class-1 motor-driven cycle category (50cc and under).  There is a clear need to address not only the shortage of dedicated motorcycle parking bays, but also motorcycle emissions regulations and other pressing issues.  Against this backdrop, current and upcoming demand is estimated as follows.

   1. Total domestic sales of motorcycles in calendar 2006 should finish at 736,000 units, down 0.3% from the previous year.  Compared to 2005, contributing factors include—despite the leveling-off in Class-1 motor-driven cycles and a gain for small-sized motorcycles—declines for both Class-2 motor-driven cycles and mini-sized motorcycles.
   2. In 2007 mini-sized motorcycles should post a year-on-year gain, while Class-2 motor-driven cycles and small-sized motorcycles should finish on a par with 2006.  However, sales of Class-1 motor-driven cycles are expected to drop, with total demand therefore projected to dip to 721,000 units, a 2.0% decline from the previous year.
2. Class-1 Motor-Driven Cycles (50cc & under)
   1. Sales of Class-1 motor-driven cycles in 2006 should total 471,000 units, roughly equal to the 2005 level, reflecting firm demand for existing products.
   2. In 2007 the application of emissions countermeasures, accounting for both fewer models on the market and higher price tags, is expected to result in reduced sales of 451,000 units in total, a drop of 4.2% from 2006.
3. Class-2 Motor-Driven Cycles (51cc-125cc)
   1. Sales of Class-2 motor-driven cycles in 2006 are estimated at 84,000 units, down 5.3% from 2005.  New models have made an impact, but overall sales are being held down by market saturation in urban areas in the current demand phase.
   2. In 2007 demand should rally a bit, with a focus on use for commuting.  Sales are forecast to hold steady at the 2006 level (84,000 units).
4. Mini-Sized Motorcycles (126cc-250cc)
   1. Mini-sized motorcycle sales should finish 2006 at 98,000 units, down 4.0% from 2005.  Despite the positive impact of the creation of the new automatic-transmission license category, restrained buying has been a notable trend, linked to stricter parking regulations in urban areas.
   2. New models will be introduced in 2007 and progress in terms of infrastructure (specifically, an increase in parking availability) is anticipated.  Demand in this category is therefore expected to surge to 103,000 units, a growth of 5.1% over 2006.
5. Small-Sized Motorcycles (over 250cc)
1. Sales of small-sized motorcycles in 2006 are estimated at 83,000 units, posting a strong 8.0% rise over 2005.  This reflects greater awareness of the lifting of the ban on expressway tandem riding, the introduction of ETC for motorcycle users, the impact of new models, and other positive factors.
2. In 2007 the continued impact of improvements in the user environment and new model launches should result in total sales in this category of 83,000 units, on a par with 2006.