Local motorcycle market picking up speed

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GMI

By Assaf Bar-Shai

Gadi Avraha, CEO of Metro Motors, which imports Sanyan, Kawasaki and Yamaha motorcycles to Israel, is very optimistic about the future of the local market for motorized two-wheel vehicles.
He gives several reasons, most related to changes in the law, for the anticipated surge in demand for motorcycles, motor scooters and all terrain vehicles (ATVs), which have four wheels but are often mentioned in the same breath with the two-wheelers. The first change, says Aviram, is to the "125 law," as he calls it. This is part of a general change in Israeli vehicle licensing regulations. Starting in 2007, a driver's license will no longer be required to use motorcycles and motor scooters with engines smaller than 125 cubic centimeters. Anyone wishing to drive one of these will have to pass a basic control test administered by the Transportation Ministry, similar to the case today concerning 50cc motor scooters.

One significant consequence of the change is that insurance rates for all the motor scooters and motorcycles in the 50cc-125cc class will change to be the same. Insurance prices for 50cc motor scooters will rise significantly, while rates for 125cc motorcycles will drop slightly.

"All the manufacturers of two-wheelers now understand that 125cc vehicles are a good product, suitable mainly for businessmen who travel every morning from the suburbs into the city centers," says Aviram. "After the law changes, all Sanyang models brought to Israel will have 125cc engines."

The problem with 50cc motor scooters is that they cannot keep up with the traffic on intercity roads. A 125cc motor scooter can travel those roads much more safely. Lower insurance costs for such scooters, along with the increased ease of licensing, will prompt many car owners to buy them, Aviram says.

The second expected change in the law is the Motor Sports Bill, which is nearing passage.

"Government approval for holding races will help legitimize the purchase of sport motorcycles and increase sales," says Aviram. "Also, a lot of vehicles will be purchased for competitive purposes. I think the Motor Sports Law will increase sales by hundreds of motorcycles annually," he says.

The new law would cover the operation of race tracks in Israel, with all that entails - insurance, safety regulations and permits to participate in races. The law would permit the formation of competitive leagues for each types of vehicle.

The third legal change will take effect this July, when holders of Class B licenses, for driving private cars, will be allowed to drive any type of ATV. At present, only those licensed to drive tractors can drive ATVs. Even after the change, ATVs will not be allowed on public roads; they will still be restricted to open terrain. Aviram says that this change in the law will bring ATVs closer to the general population and result in increased sales.

Aviram also attributes the growing popularity of two-wheeled vehicles to the increasing density of highway traffic in the Western world's big cities. It is increasingly difficult to find parking in these cities, and entering the downtown area often involves traffic jams and delays of an hour or more. Another factor he cites is the rising price of gasoline.

Aviram says that 2004 was a good year for the two-wheel market in Israel, with sales up about 24 percent over 2003. Some 9,700 such vehicles were sold in Israel last year.

The Taiwanese Sanyang label was the best-seller in 2004, with sales of 3,071 units, up 8 percent over 2003. The most popular model is the Joy Ride 200, which costs about NIS 18,000.

Despite the rise in motorcycle sales, the downward trend in jet ski sales continues, and Aviram, who imported models by Kawasaki and Yamaha has decided to stop importing them altogether.

"Sales plunged 50 percent in 2004," says Aviram, citing the difficulty in finding suitable places to ride as the main reason. People buy jet skis for tens of thousands of shekels and then discover they have no good place to use them and that they keep getting tickets from the coast guard.

This year, Metro will introduce at least seven new models of two-wheeled vehicles: The Sanyang Mio 50/100, which prides itself on low fuel consumptions - 50-60 kilometers per liter, according to the manufacturers, and has a price tag of NIS 10,500. Two larger Sanyang motor scooters are the HD200, which has a 200cc engine and costs NIS 17,000, and the Voyager, with a 250cc engine and a price tag of NIS 25,000.

Kawasaki is offering three new models of motorcycles, including the KLE500 and the ZR750. Yamaha's new model this year is the MT-01, which has a 1,700cc engine and lots of extras, and costs NIS 140,000.