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Cost Comparison: 2014 vs. 1989 38

For years now, I’ve heard people complain that motocross-bike sales are down because of the introduction of the expensive four-strokes. And, honestly, I always bought it, to an extent. I always knew that the economic crisis of 2007-2008 was responsible for most of the droop in sales, but I also bought the idea that four-strokes have to cost more to make, and they definitely cost more to fix, so it was obvious to me that it was likely a primary reason for modern MX bike MSRPs to be climbing ever-closer to $9,000.

A little while back, though, I had a realization when, in the middle of the night, I heard a four-cylinder streetbike go by on the nearby freeway spinning some incredible RPMs: I realized that the technology in those motorcycles was actually pretty incredible for what you pay.

I mean, a new Honda CBR1000RR – the top of their lineup – is $13,999. For that matter, a CBR600RR has an MSRP of $11,490! Compare that to what you get in the auto market for your dollar. These are finely tuned machines. The 1-liter engine in the CBR1000RR has a 12.3:1 compression ratio, revs to over 12,000 rpm, and puts out about 180 horsepower.

Now, compare this engine technology even to sports cars from any manufacturer: For that, we return to Honda, whose S2000 sports car puts out the most horsepower per liter of any stock, naturally aspirated car made: 120 hp per liter. And that’s the top of the heap on a per-liter basis. The CBR1000RR puts out 50% more horsepower per liter than the best any car manufacturer has ever produced, apples to apples. And the MSRP of the S2000 is about $35,000.

All of this got me thinking about the state of modern motocross bike sales, and I asked myself if it’s possible that motocross bikes are a similar “great deal” for the technology involved. The deeper I dived into the numbers, the more I found that they’re actually a better deal than they’ve ever been, four-stroke or two-stroke.

Sticking with Honda just for consistency, and since Honda has been number one in sales for my whole life, this is what I figured out:

The 2014 Honda CRF450R has an MSRP of $8699. That’s enough to give anyone who has been around the sport for more than a decade some serious sticker shock. However, it doesn’t seem nearly as bad when you consider inflation.

The 1989 Honda CR500R had an MSRP of $4098. Adjusting that for inflation from 1988 (the year the bike actually came out) to 2013 using this calculator (LINK: http://inflationdata.com/Inflation/Inflation_Calculators/Inflation_Rate_Calculator.asp ), that’s actually $8073.68. So, dollar-to-dollar, the new CRF450R is actually only about $600 more than a CR500R was 25 years ago.

And that’s only part of the equation, because that’s just inflation here in the USA. These bikes are manufactured in Japan and imported to the USA, which means that the exchange rate between the Japanese Yen and the US Dollar always plays a role in end-unit pricing. And the stronger the Yen is, compared to the Dollar, the more the bikes actually have to cost.

In 1988, the exchange rate was approximately 120 Yen to the Dollar. Today, it’s only about 104 Yen per Dollar. Less Yen per Dollar means the manufacturers must charge more dollars to get the same amount of Yen in return.

Adjusting inflation to current dollars, but using the exchange rate appropriate for the model year, the 1989 Honda CR500R MSRP was actually 968,842 Yen. The 2014 Honda CRF450R is only 904,696 Yen. Yes, it’s actually cheaper, all things considered, than a CR500R from a quarter-century ago.

And what do you get for that money?

You get electronic fuel-injection. You get Renthal handlebars instead of throwing away the stock steel bars before you even load it up at the dealership. You get rims that don’t fold up on your first hard landing. Although 1989 was the first year of the upside-down fork on the CR500R, do you really want to compare that suspension to the suspension on a 2014 CRF450R? No, of course not.

The manufacturers are doing everything in their power to keep motorcycles affordable for the American buying public. The problem isn’t four-strokes, and it’s not manufacturer greed.

The reason why these bikes don’t seem as affordable as they used to has nothing to do with the manufacturers and everything to do with the state of the US Economy and failings in the US Government.

Median Household Income in the USA in 1989 was about $27,500. Adjusted for inflation today, that’s $51,681. According to the US Census Bureau, the Median Household Income in 2012 was $51,017. Median Household Income actually peaked in 1999 at $42,000. Adjusted for inflation, that’s actually $56,080.

This began falling sharply from 2001 on, and then in 2004 it began to climb again as part of the Housing Bubble, peaking just short of the 1999 Median Wage in 2007 just before the Bubble burst late that year, causing the crappy economy we’re all trying to survive today.

Between 1989 and now, the Middle Class in the USA has been squeezed out like no other time in history.

Healthcare costs in 1989 amounted to 11.6% of Gross National Product. That means, for every dollar earned by an American in 1989, 11.6 cents went to healthcare, overall. (SOURCE: http://content.healthaffairs.org/content/10/1/117.full.pdf ) As of 2011, healthcare costs 18% of our GNP, and it’s projected to go up by 5.8% per year, every year, for at least the next seven years. (SOURCE: http://www.bloomberg.com/news/2012-06-13/health-care-spending-to-reach-20-of-u-s-economy-by-2021.html ) Simply put, healthcare is outpacing economic growth by more than 50% every year.

In 1989, the median price for new homes in the USA was about $120,000 ($225,550, adjusted for inflation). In 2013, it was $270,900. (SOURCE: http://www.census.gov/construction/nrs/pdf/uspricemon.pdf)

In 1989, a gallon of gasoline cost an average of $1.12 ($2.11, adjusted for inflation). (SOURCE: http://www.1980sflashback.com/1989/economy.asp ) Today, a gallon of gasoline costs on average $3.31. At its lowest, gasoline was 91 cents per gallon in March of 1999 ($1.27, adjusted for inflation), and gasoline peaked at $4.11 in July of 2007 ($4.62, adjusted for inflation).

So, not only are wages down, but costs are up all across the board.

Sometimes the truth is hard to swallow, but here’s the truth for those of you who can handle it:

Inaction (or ineffective action) by the US Government in order to properly address our economic woes in general (and American wages, gas prices, healthcare prices, etc., specifically) is the only reason today’s four-stroke motocross bikes don’t actually seem like an amazing bargain to the US buying public.

If you, like many of us, are having a hard time being able to afford a new motocross bike, don’t write to motorcycle magazines or websites, write your congressperson.

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