Blog

The bike market in Brazil



 

By C2W Brazil correspondent Mark Fawcett in Sao Paulo

 

Several Chinese motorcycle manufacturers have tried to enter the Brazilian market but it remains a (Brazil) nut yet to be cracked by the Chinese. Here Mark Fawcett gives us the low down on the industry in the land of samba.

 

In Brazil every two years in October the largest motorcycle exhibition in Latin America ‘Salão Duas Rodas’ or Hall of Two Wheels, is held in São Paulo, Brazil. This year several new models will be on display next to smiling Brazilian beauties.

(Salão Duas Rodas 2013)

 

The attendees will enjoy the event, of course; after all there are many new and exciting models to see. However a cloud of uncertainty will be also be present this year, one which is more acute than at any time since the Brazilian market peaked at just over 2 million new unit sales in 2011

In the 4 years following that sales milestone much has happened. Finance incentives have disappeared and loan costs, which are staggering in Brazil, have increased. Annual interest rates on motorcycle loans, if your bank will even do a motorcycle loan, begin around 27%.

There is a general malaise in Brazil as the country is roiled by political scandals and inflation is adding to the already high price of motorcycles here.

 

All this has contributed to a decline in new unit sales down some 29% from 2011 registering 1.43 million in 2014.

 

 

Brazil has 2,197 new motorcycle dealers located throughout this huge country, but that number is down markedly from 2011. There are also many more independent shops selling pre-owned motorcycles. Doom and gloom is not something I like to dwell on and it would be easy for one to get depressed reading the first paragraphs of this article. Let’s shift to some more positive points.

 

(Serra do Rio do Rastro – in the southern state of Santa Catarina is a motorcycle rider’s dream)

 

The good news in Brazil is that there are still close to a million and a half customers that will make the decision to purchase a new motorcycle this year. I suggest the challenge these days goes beyond simply “getting the sale”. It is always a good idea to build a relationship with your clients, but in lean times it is not just smart business it is essential to maximize interactions and connections with your clients.

 

In the course of my own business I encounter many dealers saying the trouble they have (besides lower sales) follows the initial sale when the buyer leaves and often never returns to the store for maintenance, OEM parts or gear. The internet has contributed to this phenomenon to be sure. Dealers, particularly franchise dealers, have significant capital tied up in their physical store, special tools, staff, motorcycle and parts inventory. Any dealer needs return business and steady service traffic to survive.

 

 

 

 

On the other hand buyers want – no, actually they need – to find great deals in order to justify a new or replacement motorcycle these days. Naturally they will gravitate to shops and vendors that offer low pricing. But all is not lost, and I disagree if you think my logic means a race to the bottom by price selling is the only way to gain sales and customers. I am not saying that at all. In fact there is plenty of evidence that customers do not base a purchase entirely on price.

Service at time of sale, inventory, selection, store location, atmosphere, friendliness and more all factor into the rational to buy from one store over another or from one salesperson in particular. These same factors have and will continue to be a big part of the buying process.

 

It seems that the new variable is how people receive information these days. What do I mean? Well, the answer is right in front of your face. What are you reading this on, a smartphone or a tablet? According to Google’s Our Mobile Planet, Brazil has 52 million smartphone users, in China there are more than 600 million. Can we all agree that mobile is the future?

 

(Google Android powers 89% of the smartphones in Brazil)

 

How buyers and sellers receive and send information has changed. It would be unusual today to find a dealership not using at least one social media account to stay connected with their clients as well as attract new followers. Connectivity and social sharing are the norm for the vast majority of potential motorcycle buyers, salespeople and managers (in every department of the store by the way) along with dealer principals and manufacturers of motorcycles as well as those manufacturers producing all things motorcycle related to be open and ready to explore the full range of channels available today as a result of new technology.

 

Pick a verb: maximize, connect, engage, share, attract, interact, send, receive, find, locate (I have used them all here) and take advantage of the latest technology in order to grow your business relationship with your clients and increase the probability of having your clients opt to commit to another important verb: buy.

 

 

Mark Fawcett is the Founder of KMS VPP a technology company servicing the motorcycle market. He can be reached at mark@kmsvpp.com.br

 

 

 

 


February 21, 2016
Comments