Alberto Tanus
Director General
Italika
/
Insight

Motorcycles: an Urban Mobility Option

Fri, 09/01/2017 - 14:15

Motorcycling in Mexico has not yet reached the popularity that dealerships hoped but it has been growing over the years. INEGI reported during the last quarter of 2016 that 2.2 million bikes were circulating on the streets. Although the market is not at its peak, the country’s top-selling brand, Italika, sees great potential just down the road. By targeting people whose habits are evolving toward new mobility alternatives and providing more affordable products, the company says it is on course to sell a million bikes, doubling its current yearly sales.

“We did not enter the market to take customers away from Honda, Yamaha or any other brand. We created our own market, developing the category in which we wanted to participate and increasing the overall audience for motorbikes,” says Alberto Tanus, Director General of Italika.

Italika established its manufacturing operations in Toluca for better market development and to speed up penetration, Tanus says, “but motorbike manufacturing still has room for development in the country.” Components of national origin are required for Italika to no longer depend on imports. The automotive industry already supplies motorbike assembly with a certain level of local content but in the motorcycle industry, there are areas of opportunity that have not been exploited, according to Tanus. “During the crisis of 2008, we tried using local automotive industry suppliers to take advantage of their production capacity but they were not familiar with our business, even though some parts of a motorcycle are similar to those of a car,” says Tanus. He suggests that it would be easy for several suppliers to cross over; tire makers for example could simply make different tire shapes and sizes with the same raw materials.

Tanus says motorcycles are gaining speed as an alternate mobility solution. “We are looking to give people access to their own means of transportation, allowing them to be more efficient while conducting their daily activities in a comfortable, reliable and fun way,” says Tanus. The company’s priority is to make customers feel confident that bikes will meet their transportation needs. Italika is specifically targeting people who want to leave either the traffic or public transport behind. Italika’s 500,000 motorcycles sold annually reflect demand for alternative transport that is not as costly as a car but gives the user more control, Tanus says.

However, motorbikes can be both a problem and a solution when talking about mobility, Tanus says, adding that various issues must be addressed for motorcycles to become a viable alternative. “Brands must promote better use of motorcycles in terms of safety, by providing active training.” When motorbike owners are in areas where they do not know the regional rule of law on bike use, they can become a hazard. These problems arise due to the user’s ignorance, which could be corrected with proper training.

Another inhibiting factor is the government. If the legal framework including Mexico City’s mobility law had welldefined incentives, motorbikes could become a mobility solution, Tanus says. “Cities should also have adequate parking for motorcycles, since units parked on the sidewalk obstruct pedestrians, posing another problem. Mexico’s car culture can cause further complications because when the police tow an illegally parked motorcycle, they rarely have the tools to do so properly and may damage the bike by removing it with equipment for towing a car.” Despite these issues, Italika is confident of driving its sales up. “The potential market of 1 million motorbikes per year is not an idea that can be discarded for those of us in the industry. In the longterm, motorbikes could be considered an excellent option for Mexican mobility.” Market growth is expected to remain constant and Tanus speaks of double-digit increases in sales. This will be derived from an expansion of the company’s distribution network and a wider range of models to extend Italika’s products to more consumers.

Italika already has 3,500 points of sale in the country, 200 of which are specialized distributors. The company also ventured into online sales in 2016, which accounts for 1 percent of its annual sales. “The fact that there is interest from the consumer so quickly tells us this sales outlet has great potential,” Tanus says. One sticking point is that delivery of online purchases requires a complex logistics process, with direct distribution from the plant.