The motorcycle environment in Japan in recent years 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 electronic toll collection (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 2007 are estimated at 723,000 units, down 2.0% from the previous year owing to year-on-year declines for both Class-1 motor-driven cycles and mini-sized motorcycles.
2. In 2008 mini-sized and small-sized motorcycles should post gains on the previous year’s levels. However, year-on-year declines are forecast for Class-1 and Class-2 motor-driven cycles, with total motorcycle demand therefore projected to dip to 701,000 units, down 3.0% from 2007.

1. Sales of Class-1 motor-driven cycles in 2007 should total 460,000 units, down 3.8% from the previous year. This decline is partly the result of structural shifts such as the drop in the number of new licensees and new purchasers, and partly the result of two additional factors: higher vehicle price tags brought on by stiffer emissions regulations, and the smaller number of new models on the market.
2. In 2008 the aforementioned structural shifts are expected to continue to have an adverse impact on sales, resulting in a total projected demand in this category of 434,000 units, down 5.7% from 2007.

1. Sales of Class-2 motor-driven cycles in 2007 are estimated at 96,000 units, a 16.8% rise over the previous year. The two main factors behind this growth are increased personal use (e.g., for commuting to work and school) and increased use in business operations.
2. In 2008 the demand for personal use should remain solid, but the outlook for corporate demand is not clear, resulting in a total demand forecast in this category of 95,000 units, down 1.0% from 2007.

1. Mini-sized motorcycle sales should finish 2007 at 84,000 units, dropping 11.8% from the preceding year. This category enjoys strong demand mostly from commuters in urban areas. The main factor behind the decline is the lack of motorcycle parking bays. However, there has also been a significant negative impact on demand caused by higher vehicle prices attributed to stiffer emissions regulations and by the smaller number of models on offer.
2. In 2008, the introduction of new models and the projected greater parking availability should push sales in this category to 88,000 units, up 4.8% from 2007.