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ACEM Secretary General Talks About PTW Market in EU
2007/10/29
Jacques Compagne, secretary general of ACEM (Association des Constructeurs Europeens de Motocycle, or Association of Motorcycle Manufacturers in Europe), gave a detailed presentation on the topic of "The European Market--10 Years of Contrasts" during the Taiwan International Motorcycle Industry Show (Motorcycle Taiwan) 2007 held on May 18-20 at the Taipei World Trade Center. In it, Compagne, talked about the role of ACEM, presented European Union (EU) market facts and figures, and described the EU market, production situation, and influential factors in the big powered two-wheeler (PTW) sector.
 | | Jacques Compagne, secretary general of ACEM, gave a detailed presentation about the EU PTW market at Motorcycle Taiwan. |
Since 2004, Compagne has been the secretary general of the ACEM. From 1974 through 2003, he worked at Peugeot Motorcycles, a subsidiary of PSA Peugeot Citroen, where his last jobs were Export Area Manager and Marketing Director, after which he moved to ACEM and acted as the public affairs and communication director. Compagne graduated from the Superior Institute of Economic and Commercial Sciences in Paris, where he majored in Marketing Studies and Research, and graduated from the University Institute of Technology in Nancy, France. All that background has made him an experienced expert with deep insight and know-how about the European PTW market.
ACEM`s Role
If you want to understand more about the European PTW market, you should first know more about the key major association in the region. According to Compagne, ACEM represents the interests and combined skills of 11 PTWs manufacturers, 11 national associations, and three guest members at the European level out of 11 European countries, representing a turnover of 10 billion euro and over 200,000 jobs in the EU.
The products represented by the company range from tiny 50cc urban vehicles up to 1,000cc heavyweights and even cruisers in the 1,500cc-plus category. The PTW sector is worth more than 1.5 billion euro per year, for which ACEM members turn out 90% of its output and account for up to 95% of the total market in Europe-adding up to about 1.5 million PTWs yearly.
ACEM was created in 1994 by the merger of two associations of manufacturers of motorized two-wheelers, including COLIMO (Comite de Liaison de l`Industrie du Motocycle) established in 1962 and ACEM founded in 1990 by the eight main European companies in the field. Upon its creation, the manufacturers of motorcycles in Europe decided to maintain the name ACEM as a sign of continuity of their presence in Brussels.
The role of ACEM has expanded with the development of European legislation and activities within all member countries. Therefore it is essential for ACEM to have a broad view of the complex economy, social, political, technical and legal issues surrounding European integration, regulation, harmonization and trade, Compagne said. All these issues represent a great challenge for the motorcycle industry.
ACEM has several major missions, Compagne said. It is a committed partner of major European institutions (including the European Commission, European Parliament, European Council, and the permanent representations of the member states); and an influential organization with expertise and networks. ACEM members have also declared their full commitment to environmental, safety, mobility and economic responsibilities.
EU PTW Market--Mopeds Vs. Motorcycles
According to Compagne, the EU is an area of more than million square meters and a population of 490 million, giving it the third-largest population after mainland China and India. The EU represents 30% of the world economy. In 2005, it had a GDP of 10.8 trillion euro, or 23,400 euro per person, and accounted for 20% of global trade.
 | | The six countries representing 90% of the EU PTW market (left), and top brands in the market in 2006 |
About three-fourths of freight and passenger traffic in the EU is by road, and forecasts predict that road transport will remain by far the most important mode of travel for passengers.
The EU PTW market, according to Compagne, peaked in 1999 at over 2.7 million units and fell to under two million during the period of 2000 to 2002. Since then, the market--comprising mopeds (under-50cc motorcycles and scooters) and motorcycle (over-50cc models--has been on the rise.
The market is highly concentrated. Just six countries represent about 90% of total PTW sales in 2006, including Italy (accounting for 28% of the total), Spain (19%), France (18%), Germany (13%), Greece (6%), and the U.K. (6%). Between 1997 and 2006, the top-three national markets saw markedly different trends. Italy maintained its No. 1 position, but sales dropped; Spain rose to the No. 2 spot, displacing Germany; and France maintained at the third position with stable sales volume.
The main players in the EU PTW market in 2006 were the No. 1 Piaggio Group (with a market share of 19%, including family brands Aprilia, Derbi, Gilera, Moto Guzzi, etc.), followed by Yamaha (15%), Honda (13%), Suzuki (8%), Peugeot (5%), and Kymco (5%).
Between 1997 and 2006, moped sales in the EU were down, while motorcycle demand rose. In 1997, mopeds accounted for 32% of the total market while motorcycle contributed 37%. In 2006 the former ratio declined to 32% while the latter climbed to 68%.
Mopeds Down
Moped sales have nearly halved over the past 10 years, Compagne said. In Italy the fall has been especially deep, with sales plummeting from over 700,000 units in 1997 to only 100,000 units in 2006.
 | | The five countries representing over 80% of the EU moped segment (left), and the main players in the EU moped segment in 2006 |
The top-three moped markets have also undergone a significant change over the past 10 years. In 1997 they were Italy, Spain, and France. Last year they were France, Spain and Germany. In 2006, five countries represented over 80% of the EU moped market, including France (21%), Spain (20%), Germany (17%), Italy (17%, but less than Germany), and the Netherlands (7%).
The major actors in 2006 EU moped market include Piaggio Group (24%), Peugeot (14%), Yamaha (12%), Kymco (7%), and others (28%).
Motorcycles Up
Over the past 10 years, the EU motorcycle segment nearly doubled in size, with steady gains achieved in each year except during a slight correction in 2001 and 2002, the speaker told the audience.
Only five nations accounted for over 80% of the EU motorcycle segment in 2006, including Italy (30%), Spain (18%), France (16%), Germany (12%), and the U.K. (8%). The top-three list changed from Germany, France, and Italy in 1997 to Italy, Spain, and France by 2006. Italy`s motorcycle segment enjoyed the sharpest growth in the past 10 years, from about 130,000 units sold in 1997 to about 450,000 in last year.
In 2006, the top brands in EU motorcycle segment were Honda (19%), Yamaha (17%), Piaggio (15%), Suzuki (12%), Kawasaki (5%), BMW (5%), and Kymco (4%).
In the past 10 years, the 125cc sector in the EU has doubled in volume. In the same period, the over-125cc sector jumped considerably during the 1997-2000 period and has since remained flat at about 95,000 to 100,000 units a year.
Engine-capacity Evolution
A shift to larger engines has been another trend over the past 10 years, Compagne said, though the 125cc category has held steady at the top. In 2006, the 51cc-125cc category maintained a 35% share of the total EU PTW market (compared with 34% in 1997); the 126cc-500cc accounted for 25% (up about 10% from 15% in 1997); and the over-501cc category sank to 40%, from its 51% share 10 years ago.
 | | The five nations representing over 80% of the EU motorcycle segment (left), and major players in the EU motorcycle segment in 2006 |
Most major 125cc national markets saw similar positive trend in the past decade, except in Germany, Compagne said. Spain enjoyed the highest growth in the category, going from under 20,000 units in 1997 to over 120,000 units last year. The top brands in the EU 125cc segment last year were Piaggio (24%), Honda (20%), Yamaha (16%), Kymco (6%), and Suzuki (4%).
Motorcycles vs. Scooters
Scooter-style models have been gaining increasing importance in EU PTW market, the secretary general told the audience. The annual demand for scooters rose by about 50% between 2000 and 2006, increasing its share of the total market from 24% to 43%.
PTW output in the EU is between 1.5 and two two million units, Compagne said, with manufacturing concentrated in Italy, Spain, France, Germany, the U.K., and Austria.
The EU imports a large share of its PTW parts and accessories, much of it from Japan, which provides about 2.5 billion euro of the stuff to the EU. Taiwan is another steady supplier to the EU.
Market Influences
According to Compagne, the EU has a highly competitive PTW market with more than 40 producers in the market. Intensive marketing efforts have succeeded mainly in shifting market shares rather than increasing the overall size of the pie.
The secretary general says that the EU PTW market is influenced by product innovation (makers push new-type models to stimulate sales, such as the MP3 three-wheel scooter developed by Piaggio), and external forces, such as work and leisure mobility needs, regulated access to and use of products, and related costs.
For example, Compagne continued, public transport does not meet modern personal mobility and flexibility needs. Mono-directional, linear paths are progressively being replaced by multi-purpose and multi-destination routes. This is true for both business and leisure road travelers. "Forecasts predict that road transport will remain by far the most important mode of travel for passengers in the EU," Compagne said.
 | | Market shares of different engine-capacity categories in EU |
Another factor, according to the expert, is that the traffic congestion in major European cities has become a serious problem. "In 1970, Europe had only 31 cars per kilometer of road. By 2003 the figure was 241," he explained. "Congestion is a reality, and this has created growing demand for PTWs, especially for urban-transport."
PTW makers can also take heart in the road-safety survey results provided by Compagne. He said that the overall PTW-rider fatality in the EU fell by 6.1% between 2000 and 2004 (with moped rider fatalities down 25.6% and motorcycle rider fatalities up 3.4%).
Challenges Ahead
The EU`s PTW market also faces some potentially negative factors, including stricter enforcement, higher insurance costs, and complex and costly access to the products in certain nations, such as France, the U.K., and Portugal, Compagne said.
The increasingly stringent emission regulations in EU are another noteworthy issue worth noticing. Between the Euro 0 and Euro 3 stages of emission standards required by EU, Compagne said, CO and HC emissions need to be reduced by 94% and NOx emissions by 50%. The emissions reductions will also be coupled with more severe testing. The increasingly stringent emission standards are expected to challenge PTW manufacturers` technology capability and cost-control ability.
Another pollution factor, he added, is noise.
Conclusions
Compagne concluded that the EU PTW market is worth about 10 billion euro, provides more than 200,000 jobs, and generates significant demand for related imports. Already 30 million citizens in EU 27 nations choose PTWs as a regular means of transport.
 | | EU PTW production (1997-2005) |
The region has a harmonized market through the WVTA (European Whole Vehicle Type Approval) system and licensing system, he added. However, market conditions and trends vary in each member state due to historical, cultural and regulatory factors.
The market is steadily growing in terms of volume and turnover, Compagne continued, though safety and pollution factors remain challenges to be confronted.
Suggestions to Taiwan Makers
The ACEM secretary general suggested that Taiwan PTW and parts makers focus more on product design to be attractive and competitive in the already competitive EU market. They should develop advanced electronics systems that can upgrade riding comfort and reduce emissions (such as electronic fuel injection systems) and work on advanced safety-related devices and systems for PTWs.
(by Quincy Liang)
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