August 11 2008.

Japanese domestic sales of motorcycles dropped 1.4% to 740,000 units in 2007. The Japanese motorcycle market is on a downtrend due to a lack of interest among young consumers, especially for 50cc bikes.

Honda remained at the top, while Yamaha rose to second spot, supported by the release of a low-priced 50cc model. Although Honda controlled a huge chunk of the market, it lost some ground in the price wars for small bikes.

Yamaha's October 2007 release, the Jog CE50, was a strong seller. It complies with new domestic emission standards and is equipped with fuel-injection technology. The company reduced the motorcycle's features to a minimum to lower the price to 144,900 yen, (£686).

Manufacturing bikes that meet emission standards boosts costs by about 20% on average. While other makers are in the midst of price adjustments, Yamaha's low-price strategy has been successful.

Harley-Davidson Japan put up a good fight. Its aggressive domestic marketing campaign paid off, with sales rising for the 23rd year in a row.

However, the overall domestic market appears to be approaching a contraction. New parking regulations have led to a drop in parking spaces for motorcycles, putting a damper on demand. The rules will most likely affect already waning demand for large scooters.

Source: Nikkeinet