In 2013, motorcycle sales in Colombia increased 10%, to 626,883 units. BMI forecasts 7.4% growth in this segment in 2014, and sustained growth over our 2018-forecast period, due to a number of strong fundamentals.
Shrinking real wages, poor access to credit, rising unemployment, and weakness in the currency weighed on consumer sentiment during the first half of 2013, and this impacted the passenger car segment. In H213, however, there was a sustained recovery in the Colombian economy and consumer story, with declining unemployment, cheap credit conditions, and improving consumer confidence. This helped buoy the full year figure for passenger cars to a decline of 5.3%, from double-digit declines earlier in the year ( see 'All Vehicle Segments Set To Rebound', February 20).
|Full Steam Ahead For Motorcycles|
|Colombia Motorcycle And Passenger Car Sales Historical Data And Forecasts, Units|
The country's motorcycle segment was somewhat more resilient, however, and registered strong growth over the year. There are a number of dynamics that have informed BMI's bullish view on the Colombian motorcycle segment.
In many developed markets, motorcycles are generally used for leisure rather than a means of transport. In Colombia, however, they are more popular than passenger cars and used as a viable means of transport. This is partly due to the low cost- as the sales figures in recent years attest, they are less susceptible to declines in consumer sentiment. Indeed, consumers may turn to motorcycles when they cannot afford a car, so two-wheel sales increase in times of belt-tightening.
Furthermore, they are a practical option in a country where many of the roads are not wide or sturdy enough to accommodate cars. Indeed, roads in the crowded urban centres are better suited to motorcycle use than cars.
Therefore, BMI believes that motorcycles are likely to remain the popular choice in the country, and that strong growth potential remains in the market. Indeed, as the chart shows, motorcycle sales far outweigh other vehicle segments in Colombia by volume , and the two wheel segment has registered strong growth despite declining sales in other segments.
BMI's bullish forecasts for longer-term growth in motorcycle sales come on the back of these strong fundamentals combined with an improvement in the country's consumer story ( see 'Consumer To Strengthen As Labour Dynamics Continue To Improve', February 19). Indeed, we expect annual sales in the segment to reach some 846,000 units by 2018, compared with some 225,000 passenger car sales by this point.