Tuesday, 28 February 2012
Lessons from history
Benzina #004 courtesy of Made in Italy Motorcycles. When Ducati/NCR beat Honda's RCBs at Montjuic Park's 24 hour race in 1980 even the biggest Duke fan must have accepted the mighty Big H would go on to rule the two wheeled world. Laid out in front of our stand was a Hailwood 350/4, a replica 500/6 and Ron Haslam's mighty 1100cc superbike. These were the racebikes fantasies of my embryonic love of motorcycles, and while I was one of the few people I knew who thought Mrs T could wrestle control of the UK from the big unions, I accepted Honda would probably kill Ducati the way they'd already killed Triumph. How wrong can you be?
I've blogged before on the heroic rebirth of Triumph under John Bloor, but who'd have thought back in 1980 that in 2012 a new Ducati would be hailed as the world's finest sportsbike? Or that a biking superstar like Rossi would be riding for Ducati in MotoGP? Or that 2012 might be the year when the Chinese sell more bikes in the UK than the Japanese? How did the Japanese get caught napping in exactly the same way as the British bike industry did way-back-when?
Sorry to any of my old economics and business studies tutors for being so succinct (for once), but the parallels are spooky. The Japanese rose to dominance, but fail to establish a premium brand. Just like the Brits even Honda have been (mainly) happy to let the Italians build the low-volume high-end motorcycles. And just like the Brits, they let another country pinch the low-value commuter and newcomer bikes, laughing at the poor quality of their early efforts. Did these people not learn this stuff while studying for MBAs? Worse, they built bikes in China just to benefit from artificially low wage and currency exchange rates, the later also a device used by Japan to protect her nascent motorcycle industry. Apparently no-one thought that the Chinese might copy not just the bikes, but also the production lines.
But there is another lesson here, especially for those who think our current woes can be brushed aside with some good old fashioned Keynesian tax-and-spend. When the world economy last crashed in the late 1980s the west chewed slowly, let over-borrowed households and businesses go bust, and moved on. It was horrid - and as the guy often collecting keys from bailiffs, believe me I know the heartbreak of watching a kid pulled out his home by a weeping mum on his fifth birthday. Japan did what people want now, but reflect on this; Japanese asset values are largely still below (often well below) 1988 values, and Japanese bikes have barely moved on from the early 1990s models that would have come from the R&D momentum of Japan's 1980s boom.