Weekly Update 2020-05-24

By Jaco du Plessis | Published on 2020-05-24

Good Sunday evening!

We didn't write any new posts this week. If it's any consolation, we did spend our time on motorcycles.

Rowan got his new BMW F800GS, and like any adventure bike owner knows the immediate next step is to
think of some idiotic reason to ride the thing a couple of hundred kilometers.

(When I got my GS, I returned the spoon of the Graaff-Reinet guest house that I found in my luggage after a trip. A quick 2000km exercise over a weekend.)

So we came up with this: I loaded his dirt bike on a trailer, and got it down to Swellendam. Now he had to come through to ride it - so he did the 500km round trip on the new BMW to have a 4-hour burn on the KTM, all in less than 24 hours.

Yes, it makes total sense.

Now, something else.

Just before lockdown started, I made the not-so-original hypothesis that the economic strain to which many small business owners would be subjected, would cause an increase in the number of motorcycles being sold in the second-hand market.

To test this idea, I'm scraping every listing on Gumtree daily. This data collection is now about
200,000 entries in size, and I've started doing some preliminary analysis.

I'm not going to say whether the numbers support my original hypothesis or not as I need more data to draw sound inferences. I will write a proper blog post on that when the time comes.

But here's a question: which bike manufacturer do you think forms the biggest chunk of the second-hand market in South Africa? The answer surprised me.

It's Harley Davidson, by quite a margin. Then BMW, at about half the market cap.

Some contributing factors are that Harleys are on average the most expensive bikes, and a number of traders each advertise a truck load of these bikes on Gumtree.

Interestingly enough, the FortNine YouTube channel made a video last week titled "How Harley Davidson Killed Itself". Apparently HD is in deep financial trouble. As reasons they cite a changing demographic and a complacency by the company because they were supported by tariffs the US government placed on foreign competitors.

Watch it here: https://youtube.com/watch?v=EOwxxsPaogY

So maybe the Gumtree observation is part of the death knell of a company that has zero appeal to the younger riders of today. I'd welcome a reply to this email if you think otherwise.

Good luck for your week, and steer clear of the storm that is supposedly brewing off shore.

Jaco du Plessis

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