Why Major American Auto Makers Have Not Seriously Competed in the Motorcycle Industry

The motorcycle market in the United States stands in stark contrast to the renowned automobile industry, being significantly smaller and often viewed as a recreational toy rather than a practical form of transportation. In many parts of the world, however, the situation is quite different, with companies like Honda and BMW operating successfully in both sectors. Despite this, major American auto makers have largely abstained from serious attempts to enter the motorcycle industry. This article explores the reasons behind this phenomenon.

Market Considerations and Economic Incentives

The motorbike market in the United States is considerably smaller compared to the automotive sector. Industry statistics show that the number of motorcycles sold in a year typically does not come close to matching the number of cars sold. This difference in market size makes it economically unfeasible for automotive giants to divert significant resources into motorcycle production and sales.

The Nature of the Motorcycle Market

Motorcycle production, even for well-known brands, is often a relatively small contribution to their overall profitability. For instance, companies like Harley-Davidson, despite struggling at times, have not been able to muster enough resources to encourage other major car manufacturers to enter the race. The failure of some motorcycle manufacturers, such as Suzuki’s US auto division, highlights the challenges involved.

Regulatory and Practical Considerations

Regulations and practical considerations also play a significant role in keeping automotive giants from delving into the motorcycle market. For example, if certain regulations were relaxed, it might make more sense for car manufacturers to produce more economical city cars that blend aspects of both cars and motorcycles. However, this is not currently the case in the United States, where motorcycles are often seen only as recreational vehicles.

Historical Context and Car Manufacturing Costs

A notable example is Ford, which exited the passenger sedan market in the USA due to financial struggles. The sum of their motorcycle sales is minuscule compared to their overall car sales. This scenario underscores the economic reality that for a major automotive company, the profit potential from motorcycle production simply does not justify the investment required to compete in this niche market.

Comparative Success in Other Markets

While the American market is conservative, there are notable exceptions. For instance, in Japan, companies like Honda have achieved significant success by producing cost-effective city cars that blend car and motorcycle elements. These vehicles are ideal for transport in crowded cities and are regarded as practical and economical. The Honda Cub motor scooter, in particular, has become one of the most produced vehicles in history, with over 100 million units sold since 1959. However, in the United States, such vehicles are often perceived as toys and do not align with the prevailing tastes and needs of American drivers.

The story of the motorcycle industry in the United States is one of economic reality and market size. While there may be periods of need for reliable transportation, the overall market for motorcycles remains niche, making it difficult for major auto makers to see a significant return on investment.