Motorcycles
My friend Terry Frazier is a long-time blogger and motorcycle enthusiast, and he has combined the two passions in a relatively new blog called MuddyWatersMX.net. I've talked about oligopolies with him, and he has brought the subject into the motorcycle world.
As he notes, the motorcycle world is dominated by a loose oligopoly of six major companies that sell over 80% of the machines. The big six include four Japanese companies (Honda, Suzuki. Yamata, and Kawasaki), one American (Harley-Davidson), and one German (BMW). The companies "utterly dominate the motorcycle market in every way that really matters (it's all about the money.)"
In particular, he thinks that these big powers wield strong influence over the American Motorcyclist Association (AMA), a collection of bike fans like himself
When the AMA must decide whether or not to take an action that will benefit rider-members but will significantly anger the 6-member motorcycle oligopoly - who control $150 billion of capital and 80%-90% of the market - will the rider-members prevail?
In another post, he notes the increasing sameness of dirt bikes and the way in which the top players are converging and thus stifling real innovation:
If you go back to the 1950s and 1960s you can see wide variety in both style and approach to offroad motorcycles. In the 1970s the technology wars began and the variety in modifications, experiments, and technologies was explosive. But by the mid-1980s most of the variety had been shuffled out of the dirt bike market. The Japanese, with their big conglomerates (making automobiles, ships, trains, power equipment, etc.) had the resources to match and absorb every innovation made by a competitor, and the dollars to out market them.
And, he argues, the kind of specific expertise has been lost, and along with it, some of the factors that attract many people like him to the sport:
From the market's perspective there are many advantages to the sameness - widespread availability of product and parts, ubiquitous support, and much less thinking required in product decisions. How many motorcycle dealerships are now Honda/Yamaha/Suzuki/Kawasaki/KTM dealers, with real expertise in none of them?
I know next to nothing about motorcycles (other than the names of the key makers), so it's great to see my oligopoly principles so clearly described in an industry I have no insight into.
