After a great expansion some years ago, where is motorcycle heading during an economic crisis?
This is an interview with Dimitris Baxevanis, owner of one of the greatest motorcycle Honda dealerships in Athens, Greece and an importer of several biking accessories brands.
Greece is hit by recession for the last 4 consecutive years. Thus itĘs an example about the course of biking when things get tough.
Question: Mr Dimitris how many years do you own a showroom selling bikes?
Answer: Although we had been helping our father earlier on, we started in 1976 together with my brother.
Q: Your brother?
A: John Baxevanis who was a motocross Champion at that era. Now he is working with me here. My father kept the garage and I opened this shop-showroom. At that time there were only ten dealerships in Athens. Thus when we opened the showroom the other dealers were coming at night to see whatĘs inside, it was going on like that, at that time. When the eleventh motorcycle shop opened and I donĘt remember who that was, I did the same, looking at his showroom, we were very competitive at that time. Quite reasonably.
Q: That was a time when the motorcycle audience was limited.
A: Yes, people interested in motorcycles were less, my family introduced the motocross in Greece then. We loved it, I started it and when my brother grew up he started racing. That was great, since I dealt with the store (business were always poor in Greece at that time) quite in a Greek way of doing things. My brother really loved riding and we were successful, since our father became our mechanic and we had a terrific family team. We were the “ambassadors” of motocross in Greece at that time, one of the four or five families bringing the sport in Greece and we made it widely known.
Q: When did you become a Honda dealer?
A: Since then, it could be 1976 or 79 – 80 at the most. From the very first time that I could formally own a business, I had a cooperation with Honda.
Q: About the present, compared with the vast numbers of the past, what is the percentage of reduction concerning the motorcycle market?
A: ‘he reduction of the market as a percentage is about 65% and that refers to units, thatĘs how they measure it. My opinion is that it could be 75% in terms of money at the market. Specifically, smaller bikes are sold, so the drop of money in the market is unprecedented.
Q: As an example, if some 100000 euros bikes worth were sold in the past, this amount now has descended to 30000 Euros.
Q: Do you believe that the market is stabilizing now or its still descending?
A: As a professional IĘm trying to specify where things are going, to see where the bottom of the situation is, so we could start stepping on that. I donĘt know, IĘm trying to be optimistic although reality dictates that we are not certain, I think we are close to the bottom. I think, I hope, to be close to that.
Q: Judging by your experience, with what era of the past does this period resemble, concerning motorbike sales?
A: In my opinion there isnĘt any similarity with the past as the market was totally different in the 70s or 80s where up growth was the only way to go. After WW2 we needed the development or the governments were borrowing money and they didnĘt inform us how bad that was. I donĘt think that there is any relation with the past, some people try to refer it, saying that the market today resembles to the 80s or 90s etc. I donĘt think it has anything to do with it, the sales numbers yes, maybe, not the style though which is totally different. This is my concern also today, we donĘt know about tomorrow, while at the 80s or the 70s, the growth was steady and progressive. Now, IĘm afraid that there will be a steady decrease on the market, not increase, thus the things are totally different.
Q: Concerning the bikes sold, is it about the same style, e.g. ten small bikes to one big motorcycle with the end of the 70s or the 80s?
A: It is logical to choose smaller bikes due to the expensive petrol. The fuel prices have been risen so that we take it into account, thus engine capacities will be smaller and the government increases the taxes. Taxation is greater not only on motorbikes but also to cars as well, while most riders own a car also. Adding up all the these taxes, house taxes also, its very reasonable for a rider to decrease the engine capacity. During the last 6 months, people are bringing big bikes to be exchanged with small ones. We donĘt want that though, as the big bikes cannot be sold.
Q: Are there any bike categories resisting downfall e.g. the cubs and scooters?
A: Well, some scooters which are of the latest technology and applicable at the standards of today, yes they do resist. They are mainly of a small engine capacity, 150 to 350 c.c. at the most, they are contemporary in terms of technology equipped. They combine ABS with adequate engine power, the fuel consumption is always significant, recent production dates...
Q: The prices of the used bikes are decreased as the prices of the used bikes?
A: Concerning the used bikes the prices are falling because there is the need for people to sell. What did you mean about the new bikes?
Q: If the importers had many years ago a profit of lets say 5% , have they decreased it to 2%;
A: Of course.
Q: Then it will be right to assume that we will not get any further price reductions from now on.
A: At the last two years all the importers, since I own a Honda dealership I could speak about Honda, but IĘm sure that it happens to every importer, they are even paying for some models… There are some bikes which havenĘt produced any profit and I donĘt know if the healthy products make an adequate profit to counterbalance the loss of the stock. This is very vivid within the last two years. A proof to that is the people who have been fired from the dealerships. ‘hus unfortunately the market is not going well within the last years and there are some war victims here. Friends and people working in dealerships who have been fired, they are unemployed and they donĘt know what to do. This shows how much the prices have shrunk at the last two years.
Q: Are people interested in used bikes as there are many motorcycles at this showroom for every price category and taste?
Ń: The answer is yes for a decent used bike.
Q: Which were the criteria to buy a motorbike before and during the recession? Are there customers for big and expensive bikes?
Ń: Since the year 2000 I had been observing an exaggeration concerning the engine capacity and an ill effort of copying the taste from other riders. I mean there were sold too many adventure bikes while half of the riders needed a street bike. They discovered that later, they lost some money then and all these things. Unfortunately I think that we are carried away from fashion, one rider follows the other when buying a bike thus there were many Transalps and V-stroms. These belong to the middle category, I could also speak about Varaderos. So there was and maybe there still is a tendency for big engine capacity bikes. Since IĘm at this job, I always advised, there isnĘt any need to buy a 1000 c.c. bike, you may buy a 800 c.c. one, or a 700 c.c. motorcycle, referring always with what he previously owned. So, yes there was an exaggeration for cubic centimeters. Nowadays, there is no relation to the past. Now the first priority is fuel consumption, there are many motorcycle owners wishing to exchange them with small bikes, scooters etc., there are ten to one cases like these, I mean there are nine out of ten recommendations to swap their big bike with a smaller one. Generally speaking, either by panic or by logic, everyone wants to shift to a smaller bike. Now some people respect their work even more, they could become a courier just to have a job to do, they are not refusing jobs and consequently, its all about usability and distance to be covered.
Q: Thus people are not interested in large engine capacity motorcycles anymore?
Ń: Not anymore.
Q: Are there any bank loans now, or do buyers pay cash?
Ń: I would say that they are paying cash, although additionally there is the case of drafts for trustworthy and respectful clients, in an effort to push sales as much as we can. The bank loans have not really stopped as many people think, although the filters are stricter now, e.g. if anyone can guarantee that he will keep his profession tomorrow, which is also difficult. There is a difference though, we had been hiding some of our incomes although we wanted expensive bikes. Thus one could be taxed for 8000 euros and he wanted a 15000 euros motorcycle. That was a case from the year 2000, not anymore though. Due to the recession these symptoms are filtered, we are at a healthier level now.
Q: You are an importer for Nolan, X-Lite, Tucano Urbano, and some other brands?
Ń: Concerning clothing Clover, Styl Martin boots and AP brake pads, Goodridge braided brake lines, Labo lubricants, cases Kappa, Puig screens, fenders etc, onguard locks.
Q: Since you can tell about accessories, their sales are equivalent to the bike sales that we spoke earlier on?
Ń: Yes the sales decline is not exactly the same, it could be between 50 to 65%. ItĘs a great percentage as well. Its also another difficulty, once riders were buying 400-500 euros jackets, now they are asking for jackets at the price of 100 euros.
Q: As I understand riders are willing to keep their bikes a little more than before, thus they are willing to install accessories easier. That makes the accessories sales still an option for the rider, or not?
Ń: I think this is a question for the garages not for us. I mean, since we are dealing more with riderĘs clothing, we cannot really answer that. However our mechanic says that the decline of the bike service is about 50%. Despite that there are bikes again on the roads which had been buried at the backyard. The day before yesterday I saw two Viragos, the one behind the other, I had forgotten them. In a similar way I see many Honda C50 cubs, rusted of course, although still operating these poor bikes. ItĘs a proof that OK these bikes are back into service once more, some of them will be repaired, although this shows that we have begun to love some things that we had forgotten them, as we were feeling “rich”.
Q: The big bikes that stepped on Greece, four years ago lets say, where are they now? Have they been sold at a low price, are they parked at an underground floor, or occasionally been ridden by their owners?
Ń: A great percentage of them are in our showrooms. Another percentage is parked in a garage with their number plates returned to the ministry of transport and a very small percentage still belong to the brave owners who still ride them, where they obviously love them. Its not that the other riders have forgotten them or they didnĘt love them, then or now. I mean the bikes sold, people are still in love with big bikes although their needs are greater than their love to buy these bikes. This is the only similarity with the past, we did respect expensive bikes once, because we didnĘt have the money to buy them.
Q: The motorcycles which are asked by the customers to be swapped with a smaller bike are more neglected than before, eg they could need a chain, sprockets and tires replacement?
Ń: Yes a lot, in our classifieds we are asking our customers, we donĘt need your old bikes, we are not swapping them if they are not perfectly serviced, this is our slogan.
Q: This is the final question. Recently the EU voted for mandatory ABS for bikes bigger than 125 c.c. and combined brakes for the smaller ones. Will this affect prices?
Ń: Always the ABS was slightly more expensive and we have seen it vividly in the case of the SH300. Now the SH 150 ABS is expected to come.
Thanks to Mr Dimitris Baxevanis for his time and interview.