Aug. 10, 2025
Understanding the Decline of Motorcycle Dealerships Today
The decline of motorcycle dealerships is attributed to several key factors, including strict manufacturer demands and high renovation costs that require significant investments. Rising rent for retail spaces, challenges in finding qualified service technicians, and increasing insurance rates also contribute to the financial burdens on these businesses. Additionally, the relatively low popularity of motorcycles compared to cars limits sales volume, making it harder to cover fixed costs. Zoning restrictions further hinder the establishment of new dealerships, creating a challenging environment for the existing ones. These elements combined explain the ongoing decline of motorcycle dealerships across the industry.
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00:00 - Introduction
01:27 - Manufacturer demands
02:04 - Increasing rent
02:27 - Getting help
03:51 - Insurance rates
04:33 - Zoning
05:46 - Outbid by car dealerships
06:28 - Declining sales and tariffs
08:36 - Wrap up
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Your favorite motorcycle dealer just closed. And then you heard about another few closing.
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What is going on?
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Welcome to the Throttle and Roast podcast. I'm your host, Niels Meersschaert. There's been a lot of news about motorcycle dealerships closing and with seemingly greater frequency.
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Just looking within the hundred miles of where I live, there's been a number of closings, some not long after they opened.
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Riley Motorsports opened in Stamford, Connecticut in 2022, aiming to carry Ducati and KTM, but they closed within two years.
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Colonial Power Sports in Milford, Connecticut closed and they carried both KTM and Royal Enfield. And Max BMW closed their South Windsor, Connecticut location as they moved their Brookfield, Connecticut location over to New Milford. And New York City Harley-Davidson closed its doors last September. And this year, the Royal Enfield dealer in Kent, Connecticut closed and another Royal Enfield and Indian motorcycle dealer closed in Brookfield, Connecticut. The only bright spots have been that Max BMW added KTM to the brands they carry in the New Milford location. And Motoplex Fairfield opened, carrying many of the Piaggio brands like Vespa, Motoguzzi and Aprilia. So what is going on?
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Well, one of the biggest things that affects why motorcycle dealers are deciding to close up shop is some of the demands placed on them by manufacturers. Now, some brands require an exclusive on the brand in the space, and they also require extensive and expensive renovations to have a certain look required by the brand. Now, BMW is notorious for this, as is Harley-Davidson.
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They also may require locations to be near major highways or a minimum amount of showroom space that limits the option for shops and requires a huge investment.
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Now, when you think of that huge investment, of course, there's rent. And retail space in general is very expensive per square foot. But for motorcycle dealerships, they need space not just for the showroom, but also for the service department and their offices that are supporting the business part of it. And this rent continues to climb and add up.
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And of course, it's difficult for some of these shops to be able to get help, especially for service techs.
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And if we think of it realistically, there's a lot of demand, but there's not necessarily a lot of qualified people in every area where you're trying to put a motorcycle dealer. And service often makes more money for a dealership than sales. And as a rider, we all try to get the best deal on a new bike. So the ability to stay in business has to come from somewhere. And that's usually parts and service.
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And there's plenty of motorcyclists who will always refer to it as the "stealership".
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And then they will try to do all of the service themselves. I think this is probably why a lot of manufacturers have limited the ability to get service manuals. This is something that a lot of BMW riders do complain about because BMW does not have service manuals for the general public anymore. It's only available to the dealers, therefore forcing you to bring your bike in for service to the dealer. And this is an attempt, I think, by some of the brands to keep the dealers in business.
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But I don't think that they're really looking at the big picture of all the other characteristics and requirements, let's say, that they're putting onto their dealers that are adding to the expenses for them.
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So the dealers now had to deal with the manufacturer's demands.
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They have an excessive amount of rent. It's sometimes hard for them to get the help that they need.
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But they also have to pay insurance. And insurance rates have been climbing for a lot of dealers because there's a potential for hazardous materials like gas and the theft of these high-value items of motorcycles. Insurance rates have been just climbing dramatically. So the cost for an overall business of a dealership to maintain that going forward is just continuing to climb. And if we are realistic about it, motorcycles are not as popular of a vehicle for people to purchase as a car. So the volume that a dealer can deal with to amortize all those fixed costs over each individual unit is much, much harder.
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And as if that enough, there's also a lot of the NIMBY people, you know, not in my backyard. And this is preventing some of the zoning that would allow you to build new dealerships in all sorts of various areas. So vehicle repair specifically is often highly restricted. And so the number of areas that you have available to open up a dealership is very restricted. I was actually really surprised by this when I was getting my motorcycle inspected recently. And I'd looked for some stuff that was in the area because a lot of the places I would normally go to haven't stopped doing motorcycle inspections. It's just not very profitable for them. And I found one and when I got to where it was, I was like, wait, I'm in a residential area. This is not making any sense when I'm looking at the GPS. And it turned out that it was actually built on an old farmhouse. And most of the land that was surrounding it had then turned into other residences. But they had had this auto service center there for many, many decades.
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And so they're sort of grandfathered in, even though this service center is sitting right in the middle of a residential area. But that's the exception rather than the norm.
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And when you do have some of these dealerships that have been zoned for vehicle repair, another thing that motorcycle dealerships are finding is that they're being outbid by auto dealerships because those auto dealers have a lot more capital.
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They have a lot more volume that they're pushing through. And especially as a motorcycle dealer may have been in that space for a while. Their landlord may see an opportunity to raise the rent by kicking them out and allowing an auto dealer to come in because they're willing to pay a little bit more of a rent than what the motorcycle dealer will. So all of these things are contributing of just making it so much harder for a business to maintain.
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And when you're thinking of how challenging the motorcycle business is and how much it's been really swaying quite significantly in terms of sales are up, sales are down, sales are up, sales are down. It is a challenge. And that kind of does come into a bit of the cycle that we're in right now, where we did have after the pandemic or even during the pandemic, There was certainly here in the United States, a big climb in motorcycle sales and really specifically within off-road motorcycle sales. And this has allowed them to continue to grow. But as the economy has started to deteriorate we've had a little bit of a sales decline. And if you look across most of the manufacturers, this has been pretty evident KTM, as we've spoken about in some previous episodes, KTM they kept running out of capital and kept having to go back to their creditors and asking for more. They finally did get a bailout from one of their partners with Bajaj.
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But overall, sales have not been doing really, really well for a lot of manufacturers. And when we look at some of the other things that are happening on a macroeconomic level, and specifically in the U. S., let's talk about tariffs. This is something that's also not helping. Pretty much the only mainline manufacturer that is produced in the United States is Harley-Davidson and Indian. So most manufacturers are not in the U. S., which means they're going to be subject to tariffs.
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And this is going to have a dramatic impact on whether a motorcyclist says, hey, let me go and get that new bike this year, because they're going to look at that and say, wait a minute. And that bike now is 10, 20, 30, 50 percent more expensive than it would have been just a few months prior.
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That may give them pause, and so you have to think if for each dealership, their volume of sales is going to go way down, and as a consequence, they can't keep the lights on because they don't have the sales, they don't have the service coming in, and it just makes it that much harder for these dealers.
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So we discussed how manufacturers are requiring significant investments on dealers to have the right brand image. We discussed how commercial rent is very high along with insurance. We also talked about the difficulty in getting help, especially with the techs who are often the real breadwinners in a dealership.
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Zoning restrictions and being outbid by car dealerships for these spaces zoned for vehicle service have also crowded out many motorcycle dealers. And finally, motorcycle sales, at least here in the United States, have been flat to declining and the recent tariffs aren't helping. So my question for you is, have you had a dealer near you close recently and do you know why? Share your thoughts through the text to show link in the show notes or leave a voicemail at throttleandroast.com slash voicemail. Thanks for listening.
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I'll talk to you next week.
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