Archive for February, 2010

Bank Lending Will Improve— Slowly

February 22, 2010

Says Chamber of Commerce Economist at Dealer Expo

INDIANAPOLIS — If you’re looking for working capital for your small business, don’t count on getting it from your local banker any time soon, says a leading economist. Martin Regalia, chief economist for the U.S. Chamber of Commerce, told a gathering of business executives at the Dealer Expo here it will take about six months for banks to return to “normal lending practices.”

Martin Regalia

Speaking at the annual meeting of the Motorcycle Industry Council (MIC), Regalia said that it will take time for banks to define the risks— financial and regulatory— before they feel comfortable lending again.

“The biggest factor in getting banks lending again is time,” said Regalia. “Banks are in it to make money like everybody else, and contrary to what the president says, you cannot run a free enterprise system without risk.

“Risk is what we all take. It’s what we all manage, and it’s why we make the money we do. Without risk, there is no return—nobody pays you for certainty. So, banks are in it to manage risk. As time goes on a little bit, they will get a better feel for that risk, and they will begin to lend, and they will probably, at some point down the road, overshoot again and under price and over lend to the risk. But that takes time.”

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FirstGear TPG Apparel Road Test: There Will be Rain

February 22, 2010

Back in the fall, we had a chance to head out to Colorado with Tucker Rocky and FirstGear to check out the TPG lineup of apparel. This is pretty high-end stuff aimed at the hardcore adventure touring rider, the type of person who thinks nothing of clocking 50,000 miles a year on two-wheels, often in less-than-pristine conditions. I am not one of those people. However, I was up for a dual-sport ride through the Rockies with the chance of experiencing some weather and putting the TPG duds to the test. Well, we got weather. Rain. Sleet. Hail. All that stuff that’s mostly foreign to So Cal natives (me!). 

So, you’ve got to hand it to Tucker Rocky and FirstGear for picking a such a route and ride as a way to showcase the features of its TPG (Technical Performance Gear) apparel. They either had strong foresight into what we might encounter or had some major pull with certain parties to arrange that kind of weather.

Click here for the full story.

U.S. Economic Outlook Turns MIC Breakfast Sour

February 22, 2010

Very Slow Growth Expected In Foreseeable Future

INDIANAPOLIS, In.  (Feb.22)—  Looking for the Good, the Bad, and the Ugly of the U.S. economy this year? Well, we heard all about it during the Motorcycle Industry Council’s annual meeting at the Dealer Expo here.

Martin Regalia

The U.S. Chamber of Commerce’s chief economist, Martin Regalia, plopped the unpleasant news right in the middle our breakfast coffee and donuts in a most unappealing fashion. Unfortunately, the bad and the ugly outweighed the good by a wide margin.

Regalia saved his heaviest punches for President Obama’s new budget. But more about that later.

Here’s Regalia’s outlook, in a nutshell:

The Good: We’re coming out of the recession, although very slowly.

The Bad: We’re not growing fast enough to replace all the jobs we lost, among other things

The Ugly: We’re staggering under so much federal spending that we may never get the budget (more…)

When Sharing the Road, How Much Responsibility Belongs to the Motorcyclist?

February 18, 2010

 

Photo courtesy of somewhere on the Internet.

 

 

NOTE 2/19/10 : Here is a link to a story in the San Diego Union Tribune regarding the “Share the Road” freeway signs. Sadly, it looks like I’m kinda right about some car drivers. For the life of me, I can’t figure out why so many drivers have it out for motorcyclists and bicyclists alike. 

I was driving into work this week when I noticed that the digital freeway sign that usually informs me about the minutes I’d spend in the purgatory of traffic that is the 405 south had a new message. This week these signs read, “Share the road. Look twice for motorcyclists.” What a fantastic message I thought, and a good sign that the CHP and CalTrans were reinforcing a warning that we riders have been proselytizing all along.

In fact, the “Share the Road” message showing up on the approximately 700 so-called Amber Alert signs across California is part of a public service campaign by the CHP, the Office of Traffic Safety and CalTrans to promote highway safety by getting drivers to actually look for motorcyclists. Nice stuff.

The pessimist in me had another thought — I bet there were more than a few drivers cruising by, reading that sign and thinking, “Why should I care? These stupid motorcyclists are crazy to begin with and dying is a part of their equation.” I honestly believe that there are those out there who don’t give a flying crap about riders and believe some motorcyclists deserve to die or be injured.

After getting into the office and going through my e-mail, which includes Google news alerts that notify me of news stories containing keywords like “motorcycles” and “honda” and such, my thoughts were confirmed. Again. I have a morbid (more…)

StoptheBan Movement Grows. Please Participate

February 17, 2010

Duane Taylor, director of federal affairs for the Motorcycle Industry Council, packages up the more than 4,000 letters urging the CPSC to drop its ban on youth ATVs and motorcycles. The letters were collected at the recent Dealer Expo in Indianapolis and will be delivered to the Consumer Product Safety Commission in Washington, D.C. In addition to the letters, more than 175,000 email messages were sent to Congrerss in one week urging that the ban be dropped. For more information, visit http://www.stopthebannow.com or click here. Please make your feelings known; your participation is vital.

SOKON USA Offers UTV Alternative

February 13, 2010

News From 2010 International Dealer Expo

Mini Truck To Sell for Less Than $15,000

INDIANAPOLIS, IN. (Feb. 13, 2010)—Mike Lewis and Hal Ferrell are a couple of good ol’ boys from Mississippi, who noticed that hunters wanted a 4×4 that no manufacturer was willing to build for them. They saw hunters customizing used mini trucks imported from Japan and China for backwoods transportation. The trucks had plenty of warts and problems, but they had cabs and heat and doors and roll-up windows.

Hal Ferrell, left, and Michael Lewis of Sokon USA, pose in their Sarge truck at the Dealer Expo in Indianapolis, In. Photo by Branimir Kvartuc

“They had right hand steering, no warranty, no parts, no service, no single sourcing, no dealers, the clearance was too low, and the cockpit was too small for Americans,” says Ferrell, president and CEO.

“But Bubba wanted it,” said CFO Lewis, jumping into our conversation Saturday, “and Bubba bought it and fixed it up to suit his needs because that’s all that was available. But we knew that source would be gone as soon as the EPA tightened its regs. The consumer was speaking very loudly to the industry, but no one was listening. We thought we saw a niche there.”

Numbers were difficult to come by, but the pair knew that container loads of the small trucks (sometimes called keis) were being shipped in and sold by Mom and Pop operations across the country. That was about three years ago.

The pair jumped in, sourced a truck in China and launched a company called Mattrucks. They offered a prototype at the 2007 Dealer Expo and took deposits from about 50 dealers. Unfortunately, the first container load of eight prototypes was a disaster when tested; the drive train was a mess and the Ferrell-Lewis team finally dropped the Chinese factory, refunded dealer deposits and rolled up the company.

Now they’re sourcing from DFM, a subsidiary of Chongqing Yuan Group, an established auto, truck and engine manufacturer. It produces more than 100,000 engines each year, and has an annual production capacity of 300,000 motorcycles and 100,000 minivans, according to its website. You can check it out here. The 4WD truck being shown under the SARGE brand in Booth #5715 sports an 1100cc engine, has 45 hp, and a top speed of 25 mph, which classifies it as a low speed vehicle (LSV). It’s an off-road vehicle but it’s street legal, depending upon state and local regulations.

It weighs just over one ton and carries five passengers. It comes with a short bed (55 inches) or a long one (65 inches).

The SARGE will MSRP for about $14,500 and will be available this summer to take advantage of the fall hunting market. That makes it price competitive with comparably equipped UTVs, Ferrell and Lewis believe. With its safety cab, heater, doors, windows, security and on-road capability, Ferrell and Lewis think the SARGE will appeal to older hunters as well as customers in construction, golf course management, ranching, farming and government. “We see this as head-to-head competition with UTVs, depending upon use,” says Lewis. UTV sales were about 200,000 units last year.

Ferrell plans to add 50 dealers by this summer, and ultimately have an operating network of 500 U.S. dealers. It’s not a business opportunity for everyone, though. Floor planning won’t be available, so dealers will have to be well capitalized to fund the operation themselves.

For more information, visit Sokon’s website, www.sokonusa.com. JD

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

CFMOTO Offers New Z6 600cc EFI Rec UTV

February 13, 2010

News From 2010 International Dealer Expo

INDIANAPOLIS, IN. (Feb. 13, 2010)—CFMOTO reduced its Dealer Expo commitment this year but that doesn’t mean it’s backing off its marketing efforts. The Minneapolis company is introducing two EFI products at the Expo— a hot 600cc recreational UTV and a 250cc scooter—, it’s offering 30% show special discounts on 2009 scooters and motorcycles, and it’s planning to increase its dealer network by 75 dealers, a jump of nearly 40% this year.

The company ran a large 60 x 70 foot booth in a premium spot in Lucas Oil Stadium and augmented it with advertising and promotion efforts throughout last year’s show. It was a huge—and very successful— push by a small, relatively unknown company. But this year is different: a 30 x 40 foot booth (#2201) and limited promotions.

CFMOTO sports its UTV lineup, led by its new 600cc EFI Z6. It also shows off its new JetMax 250cc EFI scooter.

“Last year was definitely worth the expense,” says Lev Mirman, president of CFMOTO Powersports, Inc. “The show was absolutely great for us. If it weren’t for the economy… We’re just basically saving money and downsizing because this recession isn’t over.”

CFMOTO has a lower profile at Dealer Expo this year, but it new Z6 sport UTV and its Jetmax scooter are worth a look.

The Z6 bears a striking resemblance to the very hot Polaris RZR, but it sells for a lot less— MSRP is $7,999. “However, dealers will be able to give discounts off MSRP,” says Mirman. “Pricing includes significant margin so they can entice customers with a lower price or accessories. That’s up to the dealer.”

Mirman said units will be available in dealerships May 1. The initial shipment will be 200 units. “We’ll check response; the factory is ready to ship a lot of units, but they’re being very careful.” The Z6 power plant has been in development for more than three years, so the bugs have been worked out, he says.

The JetMax was showed here last year as a carbureted version but that model wasn’t brought to market. The EFI version has an MSRP of $3,999 and will be available in April.

CFMOTO has about 200 dealers, some 140 of whom are active. Mirman plans to add 75 dealers this year, mostly in areas west of Colorado, including Hawaii and Alaska. Ivan Escalante (ivan@cfmoto-us.com) is responsible for signing up western dealers.  JD

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

MIC Battles Excessive Government Regulation

February 12, 2010

Proposed CPSC Regs Could Effectively Ban SXS Vehicles

The Motorcycle Industry Council (MIC) is gearing up to address new and existing federal regulations this year that pose a threat to the powersports industry, said Paul Vitrano, MIC general counsel, in a speech to the annual meeting of the MIC today.

Paul Vitrano

He noted that the U.S. powersports industry is still fighting the CPSC ban on the sale of youth ATVs and motorcycles that do not meet lead requirements spelled out in the Consumer Product Safety Improvement Act (CPSIA) of 2008. At the same time, he said the CPSC is developing regulations that would  “effectively ban” off-highway, side-by-side recreational vehicles (ROV).

“The time is now to stop the (lead-based) ban once and for all,” he said. Noting that the CPSC has asked Congress for the flexibility to lift the ban on youth ATVs and motorcycles, and that there are indications that Congress is willing to solve “the unintended consequences of this well-intentioned, but ill-conceived law,” Vitrano told the audience that Congress has to amend the CPSIA to “exempt or permit exclusions” for ATVs and motorcycles.

Vitrano urged the gathering to take advantage of the MIC’s extensive multi-media campaign at the Dealer Expo to contact their congressmen in Washington. “We need your help to drive your dealers, employees, and customers to stopthebannow.com, so they can send a message to Congress,” he said.

Meanwhile, CPSC has proposed such strict new requirements on SXS vehicles that they could “effectively ban ROVs as we currently know them,” said Vitrano. “We need to convince the CPSC not to adopt design restrictive mandatory standards,” he said, “but rather work with industry to maintain… voluntary standards and to address behavior that is causing crashes and injuries.”

The powersports industry, through its Recreational Off-Highway Vehicle Association (ROVA), an affiliate of the MIC, has developed a voluntary safety standard for ROVs, according to Vitrano. “Even though the data is clear that over 90% of people who are seriously injured on UTVs violated at least one safety rule,” the CPSC still proposed restrictive mandatory federal standards on this segment of machines, Vitrano said.

Vitrano called on SXS stakeholders to send comments to the CPSC before its March 15, 2010, deadline on proposed rulemaking. ROHVA has created a site, rohva.org/anpr, which can be accessed from rohva.org, to help individuals submit comments. The ANPR (Advanced Notice of Proposed Rulemaking) site provides a variety of easy-to-use tools for researching and commenting on the proposed rules. JD

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

Dealer Expo: A Valuable Investment

February 11, 2010

Dealer Expo: Is it worth the time and expense for dealers?

Probably not, unless you want to participate in our industry’s biggest business meeting of the year.

Unless you want to discuss store operations with your peers for four days.

Unless you want to see and touch the latest P&A items.

Unless you want to meet new suppliers not carried by your distributors.

Unless you want to see and talk with new OEMs on your terms.

Unless you want to pick up enough new operating ideas in seminars to pay your trip expenses many times over.

Unless… well, the answer is obvious, isn’t it?

Let’s talk when you’re at Indy this weekend. JD

Join MIC Campaign To Stop the Ban

February 9, 2010

MIC Launches Communications Effort at Dealer Expo

The Motorcycle Industry Council (MIC) again this year is offering a variety of  communication tools at the Dealer Expo so that attendees and exhibitors can urge Washington to drop the existing ban on the sale of youth ATVs and motorcycles.

“There is tremendous momentum for Congress to amend the Consumer Product Safety Improvement Act’s (CPSIA) lead content provisions to exclude youth vehicles,” said Paul Vitrano, MIC general counsel. “We need our voices to be heard now.”

The MIC’s multi-media communication offerings at Indy and on www.stopthebannow.com include:

  • Text. Use your cell phone to send the text message “StoptheBan” or “STB” to 30101. An SMS interface on http://www.stopthebannow.com allows the public to send StoptheBan text messages directly from the website.
  • Letter. You can add your signature to letters urging Congress to amend the CPSIA to exclude youth vehicles. Last year’s campaign generated over 5,000 hand-signed letters at the show.
  • E-mail. Computers are available in the MIC Business Center (Booth # 4508) so you can send e-mails to Washington calling for the ban on youth equipment to be dropped. Last year, more 1 million electronic messages were sent to Congress.
  • Call. A computer station in the MIC Business Center will identify key members of Congress, and a Skype account will enable you to call your congressmen directly from the computer.
  • Video. You can “Send a Video Message to Congress.”  A camera and filming booth will be set up in the MIC Business Center so that Stop the Ban messages can be created, posted online, and forwarded to Congress.

Vitrano said there are three key reasons why youth ATVs and motorcycles should be excluded from the CPSIA’s lead content provisions: (1) the lead content poses no risk to kids; (2) the key to keeping youth safe is having them ride the right size vehicle; and (3) the lead ban hurts the economy.

“MIC calls on Congress to draft legislation as soon as possible to either grant a categorical exemption for these products, as would be provided by H.R. 1587, a pending bill with 56 bi-partisan co-sponsors, or to give the CPSC the flexibility to do so,” Vitrano said.

Visit www.stopthebannow.com for background information, FAQs, and public outreach tools for the Stop The Ban campaign.  JD

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