Archive for January 5th, 2009

Good Time to Buy a Dealership?

January 5, 2009

Motorcycle sales since mid-September have been horrible, I’m told. And given low gas prices and scared customers, 2009 looks worse. Many dealers will probably want to cut their losses and sell their business. Other dealers, the more fortunate ones, may find themselves surrounded with good deals.

A couple of weeks ago I talked to a dealer in the South who is trying to buy a nearby competitor. This potential buyer has been in business since 1996. During the years of double-digit growth, he was able to pay off the mortgage on his building. He’s also been able to buy his inventory as soon as the flooring terms expire. In fact, because sales came to a standstill in mid-September — after months of record store sales — much of his money is now on his floor. But, as he says, luckily it’s been sitting there instead of the stock market.

So he called me up for articles on buying and selling a dealership. He was going to give the latter articles to the potential seller. You know, to soften him up to the idea.

One of our columnists, Clark Vitulli, founded America’s PowerSports Groupforsale, a large dealer network, so I suggested him. You can read his past columns here.

Another industry guru, Ed Lemco, has hosted seminars and written articles on buying dealerships. Dealers can see him in February when he hosts the annual meeting of the National Council of Motorcycle Dealer Associations in conjunction with Dealer Expo in Indianapolis.

And, of course, many books have been written about buying or selling a business. There’s also a lot of good stuff on the Web. For example, I like this article, which outlines who you should hire to help you buy a business. Our Southern dealer has already hired a broker to mediate his dealings.

One Man’s Take on the Motorcycle Industry

January 5, 2009

Not mine, but that of Bruce McLaughlan, a motorcycle blogger (read him here) for The Detroit News. In his latest posting, McLaughlan riffs on the result of the most recent J.D. Power and Associates Motorcycle Competitive Information Study — yes, we love studies with unwieldy, ponderous titles — and the Novi, Mich. stop of the Cycle World International Motorcycle Show tour. To see the result of the J.D. Power study go here.

KYMCO unveils the Quannon at the Long Beach IMS stop.

KYMCO unveils the Quannon at the Long Beach IMS stop.

McLaughlan, a marketing executive/club racer, digs into one of the study’s main results and that is being able to test ride a bike is a big HUGE factor in buyer satisfaction. He points to the crowds at the Novi IMS show, noting how most everybody spends the better part of their time test-sitting on bikes. And in his words:

Potential buyers can spend a few hours trying the “fit” of bikes representing all of the major brands, and perhaps even ask questions of knowledgeable factory reps.

This saves a lot of running around, and sadly, it represents a more personalized level of attention than you’ll get in the typical multi-brand dealership. That’s pretty pathetic.

I happen to agree with McLaughlan’s take. I’ve never been able to understand why more dealerships don’t offer test rides. I mean, if there’s anything where a perfect fit is essential it’s with a motorcycle. I understand the worries about liability, etc., but I’ve talked to enough dealers who do offer test rides (usually with the help of their OEMs) and say they are critical to selling units.

I’m not a dealer, nor do I own my own business, so I can’t say I’m second-guessing anybody, but I’d think that having a tool like test rides in your sales arsenal would be a no-brainer. Even working with the local Eagle Rider franchise to help customers size up their potential rides seems like a smart idea. I’m lucky enough that I get to ride a lot of new bikes and for some of them I’m thankful they’re only on loan to me and not sitting in my garage on a payment plan (though I’d really like an MP3 500 or a Star/Yamaha Raider for a l-0-n-g term test. You hear that Brandware and Yamaha?). But if I were in the market again for a new bike, I’d certainly gravitate toward dealerships and brands that offer test rides as an option. Given the current state of the economy (mine and the country’s) I’ll have to stick to the press loaners.

As sales get tougher will dealers and OEMs take note, not just of my ramblings, but of McLaughlan’s take and the J.D. Power results?

Polaris Shows Dakar Team

January 5, 2009

This morning Polaris sent over some pics of its four-man Dakar team, organized by Polaris France.polarisdakar13

French racer Hubert Deltrieu leads the team. He is accompanied by Italian racer Pietro Fogliani and French racers Eric Carlini and Betty Kraft. Kraft is one of only three women competing in this year’s Dakar.

The Polaris team chose the 2009 Outlaw 525 IRS for this grueling race. The Polaris France team was 30 minutes behind the leader after Stage 2.