In addition to the existing ones, every year brings new challenges to manufacturers and firms in different industries; the motorcycle industry is no exception, especially with its auto parts department. 2021 could see even more challenges with all the significant changes taking place. As we slowly move into the new year, several problems are becoming more evident. Here are some of them.
1. The Challenge to Keep Up with Technological Advancements
Technology is changing and developing faster than ever, especially within the motorcycle industry. Every day, news of new inventions and innovations are hitting the airwaves. Most automakers have been announcing their plans to move into electrification. However, it is unclear how fast the inventions will take over the industry or succeed. If it does, imagine for a moment that in coming years, most motorbikes will be electric-powered or something like that. This means that motorcycle owners will no need to purchase new filters, plugs, oils, and many other parts. Does this mean that the auto parts industry will be washed away? Will they be ready to improvise and have the ability to adapt in time to keep up with these changes? What will the retailer or supplier do when their stock is not needed anymore?
2. Boom and Bust Times
An exciting give and take exist between the motorcycle industry and its aftermarket. It is worth noting that both industries are actively dependent on the customers’ willingness and ability to spend their money. Even though the motorcycle industry relies on customers who want to purchase new, the aftermarket relies heavily on older motorcycles willing to pay for tune-ups and replacement.
The auto industry has hit a historical high with new motorcycle sales. However, 2020 wasn’t exactly a stellar year for them. The industry experienced an estimated 6% decrease in sales and profit. With all the distractions and mobility issues, this doesn’t come as much of a shocker.
3. Delayed Custom Clearances
The auto parts department has experienced an infamous evolution when releasing spare parts from custom offices. These recent delays have affected distributors’ ability to deliver timely services and commodities to their customers. Before all these happened, the release time for spare parts used to be a maximum of two days. However, it can now take up to two weeks for clearance to be issued, a significant delay in operational work and product delivery. In the long run, this deceleration might pave the way for increased supply and use of fake parts and products to provide a more comfortable and faster alternative. This is an agonizing strand for taxpaying stakeholders and the marketplace in general. The entire business system will be affected.
4. The COVID 19 Pandemic
For a long time, the automotive aftermarket was deemed resilient when it comes to crisis and distractions. However, the Covid-19 pandemic was leaving no industry behind, resilient or not. This global pandemic has by far affected most economies and industries all over the world. This does not only affect the manufacturers. Other businesses and firms within the supply chain (such as small-scale distributors and motorcycle component manufacturers) have also been affected.
The auto parts after the market’s supply chain felt the heaviest impact. A recent study showed that at least ninety-two percent of repair shops and auto parts dealers had to reduce their working hours and salaries by a staggering 54%. Some even had to downsize so that they would remain efficient while at the same time abiding by the COVID 19 regulations and restrictions. It even reached a point where customers could not be able to visit these shops. Obtaining these parts was also a problem. They had to devise and implement policies to reduce cost reduction, affecting the supply chain and logistics network.
It is rare for motorcycle owners not to complain about the cost of the auto parts. This is since the production cost is also high. Transport fees, staff costs, and many other factors still need funding. Therefore, getting authentic parts will have to cost you that extra penny.
Even with all these setbacks, the industry continues to hold its place in the country’s economy. Even though the growth has slowed, the foreseeable future still has a ray of hope in it.