Archive for May, 2009

New Polaris On-Road Division Raises Questions

May 18, 2009

What New Products Will It Announce For This Division?
What Role Will Mark Blackwell Really Play?

Joe Delmont

Joe Delmont

The announcement today by Polaris Industries, Medina, Minn., that it is launching an “on-road vehicle division” is interesting from several perspectives.

Perhaps the most intriguing question the move raises is this: What new products will the innovative Minnesota OEM produce to fit into this segment alongside its popular Victory motorcycles? The move looks to bring the company one step closer to the “adjacent” industry that company executives have been talking about for several years.

Former Polaris CEO Tom Tiller often talked about the company’s planned move into “adjacent” industries— ones that could use Polaris’ existing technology and/or sell to its existing customer base.

Tiller’s replacement, Scott Wine, told analysts in April that,  “We remain on-track to announce a second adjacency later this year,” adding, “long-term, we’ve scaled back a little bit of our research and development in Victory and shifted some of those resources and funding to the front end of our business”

And Polaris President Bennett Morgan responded to an analyst’s question with: “We believe we’ve got some nice innovation coming in this adjacency that we are not talking about as well. So, we’ve got lots of good stuff….”

Indeed, Polaris did move outside the powersports industry recently when it signed a strategic alliance with Bobcat to jointly develop Bobcat branded products that will be introduced next year.

So, here’s what you might look for from Polaris to include in its new On-Road Vehicle Portfolio alongside Victory perhaps as soon as next month:

  1. An electric vehicle, probably a SXS model with two-wheel drive, that can be used in gated communities and other neighborhood developments. There’s been a lot of talk about electric vehicles, but so far nobody’s come up with a practical, efficient and economical machine. Perhaps Polaris, a company that prides itself on its innovation, can be the one to do so.
  2. A scooter, probably one in the 150cc size. We know that Polaris has been sourcing one in China for close to a year, so it wouldn’t be surprising to see them introduce one at the beginning of this scooter season.
  3. A sport bike to capture the strong youth market and its desire for speed and performance. This may be a bit of a stretch, but there are reasons to believe it could happen. First, speed and performance are features that Polaris offers on the snow side and in its radically hot RZR side-by-side vehicle. And a top Polaris executive who has been added to the on-road group, Mark Blackwell, has a record as a champion racer. Even though he’s guided the successful growth of Victory, Mark’s comfort level may be closer to the sport bike than to the cruiser. In its announcement, Polaris noted that Blackwell’s “deep knowledge of products and markets in the motorcycle industry will continue to be an invaluable asset to the Victory brand and all other on-road vehicles.” (My italics added.)

The one problem with each of these products, though, is this: Can Polaris teach its dealers to sell these products, ones that are radically different from the Victory and from Polaris’ off-road products?

Staffing Questions

As part of the new organization, Blackwell has been named vice president of motorcycles. Meanwhile, Mike Jonikas, vice president of sales and corporate marketing, has been named vice president of the On-Road Vehicle Division; he’ll be responsible for growing the division. In a related move, Steve Menneto has been named general manger of Victory Motorcycles.

The question here is: How much responsibility will Blackwell have? In the recent past, he’s worn several hats for Polaris, at one time running both the Victory and International operations simultaneously. Hmmm, perhaps the sport bike idea isn’t so far off after all.

We’ll find out soon how this all plays out. Guido Ebert, the senior editor at Dealernews magazine, has a meeting scheduled at Polaris this week. It will be very interesting to hear what he finds out. JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com

Second Co-Founder Departs Baja Motorsports

May 16, 2009

Ryan Daugherty Resigns From Leading Chinese Distributor

Handled Sales & Marketing, Product Development, Sourcing

Ryan Daugherty, one of the co-founders of Baja Motorsports, has resigned the company and is looking for other opportunities, he told me. Daugherty, Rich Godfrey and Jennifer Andrew launched Baja in 2004 and built it into a leading distributor of Chinese powersports products—including kid’s ATVs and dirt bikes— in the U.S. and Canada. Last year, Baja sold an estimated $70 million worth of products at wholesale. Its leading customers include Pep Boys, Fleet Farm and Canadian Tire.

Ryan Daugherty

Ryan Daugherty

“It’s just time for a change,” Daugherty told me. “I’ve enjoyed helping build Baja to its current strong position in the market, but I’m going to step back now for a bit and look at the powersports industry. It’s changing and I know there will be other opportunities down the road.”

Daugherty says he doesn’t have any deadline in mind for taking on a new position.

I tried to get in touch with Rich Godfrey a couple of times to see what changes he’s likely to make now that his partner is gone, but I haven’t hear from him yet. I’ll let you know what he has to say when we hook up.

Daugherty, 43, has been vice president for sales and marketing at Baja. His duties include developing new products, sourcing those products in China and marketing the products to dealers and consumers. One of his big efforts has been developing training and service materials for technicians and customers.

He also wrote Baja’s ATV Action Plan recently presented to the CPSC (Consumer Product Safety Commission); Baja is one of only two importers of Chinese products that has had its Action Plan approve by the CPSC. An approved Action Plan is required before a foreign manufacturer can sell ATVs in the U.S. under provisions contained in the Consumer Product Safety Improvement Act (CPSIA) of 2008.

With Daugherty’s departure, Godfrey remains the sole co-founder of Baja still with the company. Andrew sold her shares in 2007 and left the company when Techtronics Industries, Inc., (TTI) acquired a majority share of Baja. Daugherty sold his equity position to TTI almost two years ago.

TTI is a $3.2 billion manufacturer who’s stock is traded on the Hong Kong Exchange. It manufactures private label household goods for leading brands, and it also owns several internationally known brands, including Hoover, Dirt Devil, Milwaukee, Homelite and Ryobi. JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com.

CPSC Ban Blocks Kid’s ATV Training

May 13, 2009

The CPSC ban that prevents the sale of ATVs made for kids 12 and under is causing a number of unintended problems, not the least of which is that THERE IS VIRTUALLY NO RIDER TRAINING AVAILABLE for youths.

The Specialty Vehicle Institute of America (SVIA) and the Motorcycle Industry Council (MIC) noted today (May 13, 2009) that trainers and machines no longer are available.

This affects individuals and groups such as the 4-H.

Here’s the problem with this: Kids can’t purchase appropriately sized machines so there is an inclination to ride larger, more powerful, machines designed for adults. And now they can’t even get rider training to help them in this dangerous situation.

The CPSC’s ban stems from the poorly-written Consumer Product Safety Improvement Act (CPSIA) enacted last year.

Amendments to the law are needed to clarify the confusing safety issues/enforcement spelled out in the law. JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com


U.S. Firm To Buy International Scooter Business

May 13, 2009

Agreement in Principle Is Confidential

Joe Delmont

Joe Delmont

A major international manufacturer plans to sell its scooter business to a U.S. company, possibly as soon as next week, according to insiders at the companies.

The parties have an agreement in principle, but are waiting for  attorneys to complete their work dotting the “i’s” and crossing the “t’s” before announcing the deal. When the lawyers are finished, Dealernews will have all the details for you right here.

The seller, a diversified manufacturer,  has been in the scooter business for some time and has an extensive scooter operation, but is choosing to allocate its resources elsewhere, I’ve been told.

The U.S. buyer has experience in the powersports industry and could add considerable manufacturing and retailing expertise to this valuable brand. It’ll be interesting to see how the pending deal affects U.S. scooter market shares this year, since a recent research report suggests there could be a slowdown in U.S. scooter sales.

U.S. Retail Scooter Sales

U.S. retail scooter sales by non-traditional manufacturers— that’s primarily non-MIC reporting companies located in China and Taiwan— increased 155% last year to 250,000 units, according to research compiled by Power Products Marketing (PPM), a Minneapolis research firm that specializes in the powersports industry.

The company estimates that total retail scooter sales last year were 327,000 units, up 114% over U.S. retail sales in 2007.

The outlook for 2009 isn’t quite so promising, says Matthew Camp, the report’s author, since many U.S. distributors carried over high levels of inventory from last year. However, says Camp, U.S. scooter sales could still hit 200,000 units, a level not seen for two decades. Except for last year, of course.

We’ll present a complete report on 2008 U.S. Scooter sales and Camp’s 2009 forecast here soon. Watch for it. JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com.

Brammo Tests TTXGP Racer

May 12, 2009

Brammo, a privately held start-up manufacturer of electric vehicles, plans to take part in the upcoming TTXGP – a time trial competition open only to two-wheelers powered by clean emissions technologies – with a bike named the Enertia.

Scheduled for June 12, following the traditional Isle of Man TT, the TTXGP (Time Trials Xtreme Grand Prix) is to be held on the legendary Isle of Man Mountain Course, a 37.733-mile circuit with over 200 corner.

The TTXGP was concocted by British entrepreneur Azhar Hussain. Hussain says the event offers an opportunity for leading global innovators in racing and clean emission technologies to compete and prove to the world that being green does not mean being slow. The planned TTXGP will showcase a diverse range of vehicles capable of reaching race speeds. Teams are likely to be backed by international corporations, universities and high tech institutions, but all eager to prove their credentials in clean emission transportation.

“TTXGP is about competitive innovation – pushing the frontier and making the next leap,” Hussain says. Certainly a look, and listen, of Brammo’s test sessions suggest these bikes could indeed represent the future of motorcycling.

Brammo, founded in Ashland, Ore., in 2002, has said it plans to begin sales of the $11,995 Enertia at five Best Buy stores on the West Coast.

Attention Car Drivers — READ THIS

May 7, 2009

Cell phones. Applying make-up. Texting. Reading. Reading and texting. Eating giant hoagies while talking on the phone. Shaving. Going through spreadsheets. Is there anything a car driver can’t do while driving? Oh yeah, pay attention. I’ve seen all of the above while cruising down the freeway and it makes me insane.

According to the February 2008 issue of Brain Research, even if a driver is using a hands-free cell phone, there’s a 37 percent drop in activity in the region of the brain used for navigation (Thanks MSF for that tidbit.)

With May being Motorcycle Awareness Month, I’d like to share these tips for drivers from the Motorcycle Safety Foundation. Yes, I know there are some ayehole motorcyclists out there, but the majority of us aren’t. And most of us have families and jobs and lives that we’re pretty fond of and we don’t want to end up the losers in an “Oh my god, I didn’t see him,” situation.

1. Look for Motorcyclists – Use your eyes and mirrors to see what’s around, and check the blind spots when you’re changing lanes or turning at intersections. Look, and look again.
2. Focus on Driving – Hang up the phone, put down the MP3 player, settle the passengers, and drive. And NO texting.
3. Use Your Turn Signals – Signal your intentions for everyone’s safety.
4. Give Two-Wheelers Some Room – Don’t tailgate or pass too closely.
5. Take Your Time – Nothing is as important as the safety of your loved ones, yourself, and the others with whom you share the road.

Now that you’ve read those tips and committed them to memory, here are 10 things all drivers (more…)

Nominees Add Uncertainty at CPSC

May 5, 2009
Joe Delmont

Joe Delmont

President Obama’s recent announcement that he’s going to nominate two new commissioners for the CPSC doesn’t improve the current messy situation at the agency; it only adds to the confusion.

The announcement didn’t make clear whether the president’s nominations REPLACE Nancy Nord and Thomas Moore, both of whom were named by President Bush, or whether they are ADDED to the commission. Since there are spots for five commissioners, they could be added. One more nominee would fill the slate.

By the way, a quorum is actually THREE commissioners, but the quorum requirement was waived last year when the agency’s chairman resigned. Nord was named acting chair at that time. Since there’s no quorum, we’re seeing a lot of 2-0 votes.

I visited the White House website to see the official announcement for myself, but I didn’t get any answers. I’ll try to get more information in the next few days.

Unfortunately, this new confusion factor may give the foot-draggers in Congress one more reason to delay fixing the cluttered Consumer Product Safety Improvement Act (CPSIA).

Wouldn’t it be nice to have a full slate of commissioners at one of our country’s most important consumer safety regulators, a group that would be headed by an active, effective commissioner who is working with an adequate budget and who is directed by appropriate and clearly-worded legislation? Is that too much to hope for? JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com

Latest CPSC Action Simply Is Not The Answer

May 5, 2009

Two-Year Stay of Enforcement Doesn’t Solve Problem

Congress Should Fix Poorly-Written CPSIA Law


joedelmont

Joe Delmont

The CPSC’s recent promise not to enforce for two years a legal ban on the sale of kid’s ATVs, dirt bikes and snowmobiles and related parts, garments and accessories just doesn’t cut it. I’m sorry, but the move is woefully inadequate.

The vote Friday by commissioners Nancy Nord and Thomas Moore is simply the latest step in this silly dance between Congress and the Consumer Product Safety Commission. The awkward two-step is called the Consumer Product Safety Improvement Act (CPSIA) that was passed last year.

The dreadful legislative effort bans the sale of toys designed for children ages 12 younger that fail to meet several safety standards. The lead limit is 600 parts per million in parts that are accessible to children. The ban became effective Feb. 10, 2009.

Congress says the law gives the CPSC authority to grant exclusions where appropriate— in the case of brake cables, for example. The CPSC responds by calling the law poorly written, and says it is unenforceable.

Retailers and manufacturers from many industries are caught in the middle.

Today, the situation is in a shambles. Some powersports manufacturers are selling products that have been modified or reclassified for youngsters aged (more…)

SBA Details New Alternative Loan Criteria

May 4, 2009

Average  After Tax Income Less Than $3 Million? You May Qualify

Two Methods To Figure Eligibility Now Available

The Small Business Administration today clarified its new guidelines for loan guarantees as they apply to small business such as powersports dealers and manufacturers. The alternate company size standards announced May 1, 2009, apply to motorcycle, ATV, and personal watercraft firms. This updates an earlier post  here with additional information.

The SBA has created a second, more liberal, alternate standard for small businesses that couldn’t qualify for an SBA-backed loan under the original standard.

These are not NEW standards, an SBA spokesman told me, they’re alternative standards designed to expand the program to smaller businesses that have been seriously affected by the current economic downturn.

(more…)

Corbin-Pacific Up For Sale

May 4, 2009
mike_corbin221

Mike Corbin

Editor’s note: The following info is from Dealernews senior editor Guido Ebert.

Mike Corbin, founder of seat and accessories supplier Corbin-Pacific Inc., has put the company up for sale after 42 years in business.

Corbin says he’s ready to retire and sell Corbin-Pacific for $11.5 million, the company’s headquarters and manufacturing facility in Hollister, Calif., for $7.2 million, and a retailing facility in Daytona Beach, Fla., for $3.2 million. He’s also offering to work with the new owner for up to two years to ensure a successful transition.

The company is listed with a Los Angeles-based sales and acquisitions firm, Business Team.

Visit Dealernews.com for further details of the sale and a candid conversation Dealernews contributor Joe Delmont had with Corbin about how he built the company, how he sees changes in the marketing of motorcycle products, and what he plans to do in retirement.