Posts Tagged ‘Arctic Cat’

Opening Day at EICMA’s Motorcycle Show

November 3, 2010

Prime Minister Silvio Berlusconi with the director of EICMA Costantino Ruggiero during opening day ceremonies. It's a memorable show for Ruggiero, who is retiring this year after 25 years as executive director of ANCMA, the Italian motorcycle and bicycle trade association, and head of the group's EICMA show.

Huge show venue covers area of nearly 47 football fields

MILAN — It’s been seven years since I walked this world’s largest motorcycle show,but it seems as though I was never gone.

While much has changed at EICMA, much is the same— the almost overwhelming size, the jammed press conference schedule on the first two days (Tuesday and Wednesday have 21 press conferences) devoted to trade and press representatives. The doors open to the general public on Thursday. By the time this 68th edition of EICMA wraps up on Sunday, Nov. 7, close to 500,000 people will have walked these aisles.

The highlight of the first day, for Italians certainly if not for foreign visitors, was the opening ceremony featuring Italian Prime Minister Silvio Berlusconi.

Security seemed especially tight for Berlusconi’s visit this year and made it almost impossible to move through the presentation area in the main administration building that houses EICMA offices and the media room where we do a lot of our work. The media center is set up with computer facilities, and it hosts the drop off area where exhibitors distribute information to the media.

Unlike in past sessions when Italy’s top politicians opened the show with comments related to motorcycles, often discussing transportation issues and plans for boosting Italy’s important motorcycle and bicycle industries, Berlusconi used Tuesday’s event as an opportunity to poke barbs at his political opponents and to talk about general political issues. Recycling,  garbage issues in Naples and proposed wire tap legislation didn’t hold much interest for international guests looking for news about motorcycles.

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Retailing Questions Continue for Powersports

October 4, 2010

Wells Fargo Consumer Conference

There wasn’t much to excite investors at the recent two-day consumer conference held by Wells Fargo Securities, according to a report issued by the company last week. The conference was held Sept. 29-30 in New York, but there were not many powersports companies among the 64 firm that gave presentations to the analysts. Perhaps the best known powersports participants were Arctic Cat and Brunswick. Other related companies included International Speedway Corp., Penske Automotive, Tractor Supply, Marine Products, and U.S. Auto Parts Network.

Several trends ran through the presentations, according to reports compiled by attending analysts. These include: A continuing major shift to online marketing in a number of forms; personalized marketing is growing, using the Internet and social media to drive sales at online and bricks and mortar sites; increased sourcing costs which could put pressure on margins even though many companies are operating in a more efficient manner, and holiday inventories seem to be in good shape.

“Powersports retail sales visibility likely will be clouded until the beginning of seasonal sales in March,”  Senior analyst Tim Conder wrote in his conference summary report. Near-term price movements of powersports stocks most likely will be tied to general economic activities, he wrote. In his conclusion about the leisure segment, Conder says he likes certain toy companies, followed by cruise lines and powersports companies. Not a real strong recommendation.

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Polaris Outperforms May Stock Slump

May 31, 2010

Dow and S&P 500 Decline Sharply

Polaris Industries common stock lost ground in May, but its decline was only about one-third of the ground lost by leading market indicators, and it was much better than two other powersports stocks, Harley-Davidson and Arctic Cat.

Polaris closed May 28, 2010, at $58.70, off $2.35, or 3.8%, from its close on May 3 of $61.05. Polaris stock was given a strong boost on May 24 when analyst Joe Hovorka of Raymond James upgraded his Polaris rating from Market Perform (third level rating) to Strong Buy (top rating).

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Feds Investigate Chinese IPR Theft

May 7, 2010

Hearing Scheduled for June 15, 2010.
It’s an Opportunity To Tell Your Story.

Another federal agency has joined the battle on Chinese manufacturers who are selling illegal goods in the U.S. First, the Consumer Product Safety Commission (CPSC) took aim at Chinese with its child safety provisions, then the EPA (Environmental Protection Agency) began grabbing containers of Chinese powersports products as they entered U.S. ports looking for emissions violations.

Now the U.S. International Trade Commission (USITC) has launched an investigation into the effects of intellectual property rights (IPR) infringement on the U.S. economy and U.S. jobs. The investigation was requested by the Senate Finance Committee.

The investigation will study violations of copyrights, patents, trademarks, and design registrations.

The ITC  will  publish its findings in two reports. The first will provide a description of the types of reported IPR infringement and China’s related policies on procurement of “indigenous innovation” which could limit the sale of U.S. products within China. This could be of special interest to U.S. companies such as Polaris and Harley-Davidson as they attempt to expand into the Chinese consumer markets.

The second report could be much more explosive. It will describe the size and scope of IPR infringement by Chinese companies and the effect of these actions on U.S. jobs and on the sales and profits of U.S. companies. In addition to Polaris, Harley and Arctic Cat, among others, these companies include U.S. operations of Japanese companies such as Honda, Kawasaki, Suzuki and Yamaha, according to an ITC official.

Depending upon how broadly the ITC wants to define U.S. companies, it could include most powersports companies doing business here, including OEMs such as BRP, KTM, Piaggio and Triumph, as well as aftermarket companies.

The report on types of IPR infringement is due by Nov. 19, 2010, and the second— on the impact of these infringements— is due May 2, 2011.

In requesting the investigation, Committee Chairman Max Baucus (D-Mont.) wrote that more than 80 percent of goods seized at U.S. ports for IPR infringements came from China. He also noted that intellectual property accounts for more than 40 percent of U.S. economic growth.

As part of the investigation, the USITC will hold a public hearing  on June 15, 2010. Written comments also will be accepted. All written submissions, except for confidential business information, will be available for public inspection.

I’ve been hearing for years about how Chinese manufacturers steal designs and produce replicas of popular machines and PG&A items made by U.S.,  Japanese and other manufacturers. Now is your chance to step forward and describe how your products have been illegally copied and how you have been financially injured.

If you’re concerned about dealing with the ITC but want to tell your story, contact me. I can get your information to the ITC.

Here is important information if you wish to submit comments to the ITC:

DATES
June 1, 2010: Deadline for filing requests to appear at the public hearing.
June 3, 2010: Deadline for filing pre-hearing briefs and statements.
June 15, 2010: Public hearing.
June 22, 2010: Deadline for filing post-hearing briefs and statements.
July 9, 2010: Deadline for filing all other written submissions.
Nov. 19, 2010: First report due to the Senate Finance Committee.
May 2, 2011: Second report due to the Senate Finance Committee.

ADDRESSES
All Commission offices, including the Commission’s hearing rooms, are located in the United States International Trade Commission Building
500 E Street SW, Washington, DC.
All written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436.

The public record for this investigation may be viewed here.

ADDITIONAL INFORMATION
Project Leaders: Katherine Linton (katherine.linton@usitc.gov or 202-205-3393) and Alexander Hammer (alexander.hammer@usitc.gov or 202-205-3271) or Deputy Project Leader Jeremy Wise (jeremy.wise@usitc.gov or 202-205-3190).
Analyst, John Kitzmiller (John.Kitzmiller@usitc.gov or 202-205-3387).  JD

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

Proposed Rules Could Severely Restrict UTV Use

March 4, 2010

We have until March 15 to comment on these
CPSC rules that could virtually ban UTVs.

Have you commented yet? If not, you should.

Here are the details.

The CPSC’s proposed mandatory standards spell out how off-road vehicles must be designed, manufactured and used by riders. Meanwhile, at the same time that the CPSC is pushing its rules, the industry has been developing its own voluntary standards.

Paul Vitrano

If you think government mandated standards will benefit our industry, then you don’t have to do anything. If, however, you think perhaps the industry can produce more effective standards, now is the time to step up and make your thoughts known.

A unit of the MIC, the Recreational Off-Highway Vehicle Association (ROHVA), has created new tools for riders and dealers to easily submit comments. You can do it at http://www.rohva.org/anpr.

The sample letters urge CPSC to work with ROHVA to implement voluntary standards and to promote the safety rules for ROVs, also called SXS or UTV units. The page also contains explanations of ROHVA’s position on ROV standards and links to important documents.

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Investors In Powersports Stocks Enjoyed 2009

December 31, 2009

Harley, Polaris, Arctic Cat Post Hefty Gains

Investors who placed bets on the powersports industry last year at this time— and held steady for the ride through the year— have reason to celebrate tonight. I checked the performance of three of the leading powersports stocks this year—Harley-Davidson (HOG), Polaris Industries (PII), and Arctic Cat (ACAT) and each of them outperformed the Dow Jones Industrial Average (DJIA) by a wide margin in two cases and matching it in the last one.

It wasn’t a smooth ride, however, and it took a firm hand to stay in the game through the sharp downtown in the first quarter.  For example, while the Dow lost 13% in value during the first two months of 2008, Polaris lost 25%, Harley  dropped 21%, and Arctic Cat slipped 20%.

For the year, though, the Dow climbed 1,772 points from 8,776 on Dec. 31, 2008, to 10,548 at the close yesterday. That’s a 20% jump. During the last 52 weeks, the Dow ranged from a low of 6,440 to a high of 10,605.

Polaris, the Minneapolis-based manufacturer of ATVs, UTVs, motorcycles, snowmobiles and electric vehicles, posted the biggest dollar gain during the last year of the three companies I looked at. Polaris common moved from $28.65 on Dec. 31, 2008, to $43 at the close yesterday. That’s a gain of $14.35, or 50.1% over the year. Its 52-week performance ranged from $14.53 to a high of $49.74.

If you would have purchased 1,000 shares of Polaris common stock one year ago, your investment would have gained $28,650, not considering quarterly dividends nor any sales commissions. Now, wouldn’t that provide a nice party tonight.

Securities analysts who follow the Polaris stock like the management team lead by new CEO Scott Wine, and Bennett Morgan, president and COO, and a long-time Polaris executive. When talking about Polaris, investors also talk about its ability to quickly bring new products to market, its efficient operations that emphasize cost controls, and its growing ability to control inventories at the dealer level through its Max Velocity Program (MVP) which allows dealers increased ordering flexibility.

Harley-Davidson gained $8.53, or 50.3%, climbing from $16.97 at the close on Dec. 31, 2008, to $25.50 at yesterday’s close. Harley investors had perhaps the toughest time waiting calmly for gains on the HOG stock as the company reworked its operations in several major steps.

One move with immediate and long-term implications was  the new contract it won with workers at its York, PA, plant that  permits the company to cut loose nearly half the 2,000 employee York work force and move ahead with major physical improvements in the plant. The plant modernization will be aided by a stimulus package from the state of Pennsylvania. Harley said at one point that it was considering relocating the operation to Kentucky.

In its second big reorganizational move, Harley dumped its MVAgusta operation and it closed its Buell sport bike business.

During the 2009 52-week period, Harley stock ranged from a low of $7.99 to a high of $30.00

Arctic Cat common stock is played at a much lower level than either Polaris or Harley, but it, too, posted a nice gain of 20% during the period Dec. 31,  2008, to Dec. 30, 2009. It climbed $4.16 for the year, moving from $4.79 in December 2008 to $8.95 yesterday.

Cat had a tough year, partly because of its dependence on snowmobiles and partly because of the loss of Gander Mountain, its high visibility outdoors retail chain based in Minneapolis. Gander had been carrying Arctic’s ATV and SXS lineup in its major stores. Arctic stock ranged from a low of $2.40 to a high of $9.27 during the last 52 weeks.

Okay, so now you’re probably waiting for my forecast on the performance of these stocks in 2010. Sorry, I don’t have one. After reporting on publicly traded stock for more than 40 years, I’ve come up with one basic rule: Stock market performance doesn’t always reflect corporate performance, especially when you try to tie it to a specific quarter or other reporting period. I don’t have a clue how these three stocks, or the Dow, for that matter, might perform over the next four quarters. And if I did know,  I wouldn’t give that information away; I would charge a lot of money for it. Isn’t that what investment advisors do?

Happy New Year and good luck with your investment decisions. I hope your powersports stocks perform well for you in 2010 as these three stocks did in 2009. JD

Contact me with news tips and story ideas at
976/893-6876 or joe@powersportsupdate.com

Research Shows Changing Dealer Networks

December 22, 2009

There’s been a lot of talk this year about changes in the number and types of franchised dealers operating in the United States and Canada, but there’s been precious little data to back up the talk. Until now.

I’ve been going over some very interesting research developed by Don Musick and his company, Genesys Technology Solutions (GenesysTech). The data collected by Musick shows that the major OEMs lost dealers last year while the non-traditional manufacturers — basically Chinese and Taiwanese and other non-MIC suppliers — picked up ground.

It’s like the frog dropped into a pot of water that gradually heats up to boiling, says Musick. The majors don’t recognize that the Chinese dealers are surrounding them with experienced retailers and are getting ready to eat their lunch.

Don Musick

I’ve traveled to China and seen the potential of Chinese factories, and I realize that most of them have a lot of problems as far as succeeding in this market, But, still, Musick makes a pretty strong statement, one that’s worth considering when we talk about the changing dealer network and what it might look like in 2010 and 2011.

Musick founded GenesysTech in 2004 and began collecting dealer information in powersports, auto and a number of other industries. There’s nothing magic about how Musick comes up with his numbers; it’s just a lot of hard work and computer analysis.

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Ecowatercraft Hopes to Offer Electric PWC

June 4, 2009

EcoWatercraft is a company planning to be the first all electric personal watercraft manufacturer to go into production.
eco_logo
The company is the brainchild of founder Barrett Taylor. Taylor says, as a collegiate triathlete, he often swam amongst extremely heavy fumes expelled from the personal watercraft patrolling the swim site – something that coaxed him to look more closely at the health implications of breathing in toxic fumes and served as inspiration to assemble a team dedicated to bringing an electric personal watercraft to market.

Why electric? According to Taylor, the ECO emits no emissions, operates in complete silence, expands PWC use by being permitted on many lakes that restrict gasoline vehicles, benefits from acceleration inherent in electric vehicles, and offers convenience by requiring no fuels, oil or maintenance.

Sounds good, right? Many “green” blogs and websites appear to think so. However, there are a couple of statements that show a glaring lack of industry knowledge.

First, EcoWatercraft claims it “will be the first American personal watercraft corporation.” In fact, Minnesota-based powersports manufacturers Arctic Cat and Polaris were in the market years ago.

Second, Ecowatercraft says it “will provide the most customer oriented experience in the personal watercraft industry.” Dubious, since they’ll first have to gain the financial strength equal to or greater than companies like Kawasaki, Yamaha, BRP and Honda. Plus, they’ll likely be selling through the same dealers as those other OEMs.

Finally, Ecowatercraft, throughout its marketing literature, uses Kawasaki’s trademarked “JetSki” name in lieu of the general term of “personal watercraft.” A rookie mistake, for sure.

Inventor Patents Passenger ‘Safety Grips’

March 9, 2009

An inventor from Portland, Ore., has patented an accessory that he says would help passengers of motorcycles, ATVs and personal watercraft hold on to the operator.

Inventor service company InventHelp publicized the product, but failed to name its inventor client. outmax800refixt1

The “Safety Grips” (not to be confused with the previously released “Buddy Belt”) consist of a nylon, padded belt that is secured via hook-and-loop fasteners. Sewn into the rear of the belt would be a pair of upright handles facing the passenger. In use, the operator would adjust the belt to fit his or her waist, and the passenger grips the handles throughout the duration of the ride.

According to InventHelp, the inventor was inspired to create the Safety Grips after an off-roading trip. “We used this belt while riding quads on sand dunes at the beach, and we got a lot of positive feedback from both passengers and operators,” he said.

Lets hope the inventor was riding the ATV in the prescribed manner – in other words, not riding two-up on a single rider vehicle. Existing two-up ATVs, from BRP and Arctic Cat, come supplied with multi-position passenger grab rails and backrest.

Taiwan Firms Aim for U.S.

February 15, 2009

I was asked to speak at the Taiwan Powersports Symposium during the Dealer Expo in Indianapolis.

The event included journalists and manufacturers focused on giving an insight about Taiwan’s powersports industry and how it may impact business here in the U.S. The comments below are my own, offered during the presentation.

“While it’s unlikely any of us were in the motorcycle industry during the early 1960s, I think it’s pretty well known how the first of the Japan-made two-wheelers to enter the U.S. back then were greeted by consumers and retailers who had, up to that point, only known U.S. and European brands.

Although the things said about those early Japanese bikes weren’t too flattering, the Big Four from Japan nevertheless grew to become the major players in the U.S. motorcycle market.

Well, nowadays, I hear some people speak dubiously about machines coming from other areas of the Far East. The thing is, I find most of the (more…)