Why Motorcycle Businesses Are Closing (It’s NOT Sales)

I asked four motorcycle dealership and shop owners why motorcycle businesses are closing, and none of them said it’s because of declining motorcycle sales or consumers.

I’m Adrian, I’ve worked in the motorcycle industry for almost 15 years. Here are ten reasons why motorcycle shops are closing, that have nothing to do with customer demand.

THE MYTH: Weak sales are killing the industry

First, some acknowledgements, yes, as in any industry, there are some shady businesses and shady people in the motorcycle world. We’ve all had the misfortune of meeting at least one.

But the truth is, most of us aren’t here for the money. If we had the same job titles, and the same job descriptions in other industries, and we’d probably all be making a lot more money. Most of us are here because we just love motorcycles, and we’re working our butts off.

Right now, June 2025, most motorcycle dealerships and shops around me have a one to two week wait for a service appointment. Some Harley-Davidson dealers are up to a one month wait for service now.

And yes, new vehicle sales are declining. Yes, the industry as a whole is declining. But, as someone who first started working in the motorcycle biz in the tail end of the 2008 recession, we know just how cyclical our industry is. Trust me. We count on it. Especially all the folks who have been doing this for decades before I showed up.

The sales decline isn’t our biggest problem right now. Anyone with half a brain was budgeting for it… as long as you aren’t an executive working for KTM.

THE REALITY: 8 Reasons Shops Are Closing

So why are more motorcycle dealerships and motorcycle shops closing then there are new ones opening?

1. Rent Is Out of Control

Averaged out over the last five years, commercial rent is the highest it’s ever been. Rent can often be even more costly than employee salaries at the end of the month. It doesn’t just crush current motorcycle shops and dealers, it’s a major barrier to entry for people wanting to open their own motorcycle business.

2. Good Help Is Hard To Find, & Harder to Keep

The service department is one of the most consistent revenue generators in a motorcycle business, whether in good economic times or bad. But like any other skilled trade right now, there is a major shortage of qualified professionals. That means dealers and shops aren’t able to recruit, train, and keep, as many motorcycle technicians as their business has demand for, which limits their income potential.

3. Insurance Has Skyrocketed

Insurance is usually among the top three operating costs for a motorcycle business. Especially where I am in Ontario, where insurance costs for motorcycle shops and dealerships have gone through the roof over the last few years.

4. Regional Specific Stuff

There’s always a chance of regional specific stuff, so you should talk to dealers and shop owners where you live. But here in Ontario in 2025, we got a whole new system of doing vehicle safety inspections, and the insurance companies used this as justification to even further jack up the rates for shops participating in the new vehicle safety inspection system. Some people mentioned insurance rates doubling, in the tens of thousands of dollars, to do what shops and dealers need to legally be able to do to sell motorcycles. It’s basically white collar extortion, and it’s so bad, that many shops have stopped offering vehicle safeties altogether.

5. Zoning: There’s No Place Left to Work

There are fewer spaces zoned for vehicle repair and sales. We are living in a housing crisis. The places that do come up for sale are typically bought up by developers to be torn down and turned into housing or public infrastructure. Within a 15 minute drive of my house I’ve seen the old McBride motorcycle shop and Cyclewerx repair shops both get torn down to be turned into condos, and the old Vespa Toronto West location being ripped down as part of some rail expansion project or something.

6. Auto Shops Outbid Everyone

Automotive work makes a lot more money. So when a rare vehicle repair and sales zoned property does come up, that a real estate developer doesn’t want, auto repair businesses easily outbid motorcycle shops, because their return on investment is so much higher, making it hard for people to find anywhere to set up or move a motorcycle shop.

7. Manufacturer Pressure (for Dealers)

OEMs want dealers to invest more in bikes and branding than ever before. Harley-Davidson even cancelled a sixty year partnership with a dealer who refused to move to a location close to a major highway. The demands and amount of investment that manufacturers want from dealers is getting ridiculous. That means that when mom and pop want to sell their motorcycle business and retire, there aren’t a lot of people who can access the kind of financing needed to either buy it or open their own dealership.

8. Financing Is a Huge Barrier (for Indies)

Operating costs for independent shops are also at all time highs. The question isn’t “Who will buy the business when I retire?” The question is “Who can afford to buy it?” Yes, a small percentage of motorcyclists do have access to the kind of financing needed to buy a business. But the people who have access to that level of credit, will always find something much more profitable and healthy to invest in. So who buys the business?

9. Owners Sell the Land, Not the Shop

Faced with the challenge of finding a buyer able and willing to offer what the business is actually worth, many motorcycle business owners realize they’re better off just selling the property, not the business. We live in a housing crisis. Cities have a shortage of lots zoned for commercial vehicle use. It’s easy to find real estate developers, or automotive business owners, who would happily top dollar for a large property they can turn into something that has nothing to do with motorcycles. So often times when a motorcycle shop closes, no one steps in to replace it, because no one who can afford to, wants to.

10. Tariffs and the Economy

Now, the US government has decided to launch a trade war against it’s closest trading partners. They’re willing to hurt American businesses in hopes of hurting the foreign businesses that they trade with even harder. It’s a tactic that makes you and your closest allies grow financially weaker together, while your enemies grow ever stronger, ever more brazen, and ever more unified. Cool cool cool, great idea!

I’m sure half of you like the guy, and half of you don’t, but the one thing we can all agree on, as motorcyclists, is that when our manufacturers, dealerships and indie shops can have the price of our motorcycles and parts go up 25% to 50% overnight, no matter who you voted for, that instability is very bad news for all of us on two wheels, and very bad news for our industry as a whole.

Conclusions

A lot of YouTubers have made content on this topic and always seemed to talk about the impact of decreasing demand. The boomer tubers blame the millennials for being too afraid of going outside to get into motorcycling. The millennial youtubers blame the boomers for making everything too expensive and not paying them a living wage. The immigrants say “Don’t look at me, I just got here.” Then everyone turns around and blames them anyway.

But when you talk to the people who actually have their boots on the ground, out in the field, our perspectives are very different.

Two of my four friends who own motorcycle businesses were forced to pick up and move their entire business, on a few months notice, in a city with very few locations available to choose from, while facing all kinds of other challenges outside of their control at the same time.

What would have happened if they couldn’t find a place? How long will their costs keep rising? Who’s going to want to buy their businesses when they’re ready to cash out?

Those are ten real reasons why we end up with fewer and fewer motorcycle shops every year… without even listing anything to do with consumer demand. Because again, we know it’s cyclical, we know it’s shrinking, and we budget for that… KTM excluded.

I’m Adrian. I hope my video helped you gain a little insight into the motorcycle industry. Please hit the Like button if you want to encourage me to make more videos like this one, and hit subscribe if you’d like to see them.

I’d love to hear your feedback on this video and what your thoughts are on this topic. Please leave me a comment down below.

As always, ride safe, but have fun! Peace!