Posts Tagged ‘Motorcycle’

Survey: 3Q U.S. Harley Retail Sales Up 3.5%

October 3, 2011

Here is some good news for followers of Harley-Davidson: Retail sales in the third quarter were up 3.5%, compared to the 3Q last year when sales slumped 9.4%, according to a recently-completed survey of dealers by Wells Fargo Securities.

There’s more good news as well: Inventories remain at five year lows and all of the dealers described inventories as comfortable/light with a need to improve the mix such as adding more touring bikes. Inventory levels are at about 40-45 days, according to the survey.

However, dealers voiced concerns about the inventory mix and said there probably were lost sales due to lack of product availability on models such as the model year 2012 (MY12) touring, sportsters and softails. “We believe Harley underestimated U.S. summer demand, especially in touring (models),” says Tim Conder, Wells Fargo Securities senior analyst and author of the report. “It likely will be late fall before Harley has U.S. inventories normalized,” he added.

Here’s an interesting comment from Conder: “We continue to believe Harley is making specific efforts to limit some availability of Touring models, in part to encourage the dealer network to grow sales (i.e. Sportster, Dyna, Softtail) into targeted, less penetrated customer demographic segments (i.e., under 35, women, African-American, Hispanics). However, this effort may have been too aggressive when combined with York restructuring transitions.”

The survey included 40 dealers located in 24 states across the U.S., approximately, 6% of Harley’s U.S. dealers and was skewed toward larger dealers in major metropolitan areas. The survey included 10 dealers in the East,  10 in the South, 10 in the Midwest and 10 in the West.

The dealers surveyed were very aggressive in their marketing. In addition to selling new and used motorcycles, clothes, merchandise, parts, accessories and service, 98% of the participating dealers had Harley Owners Group (HOG) chapters, 55% offered rentals, 45% sponsored a Rider’s Edge training program and 33% had an on-line sales program.

The dealers also were very aggressive on their pricing. Seventy percent of the dealers sold at MSRP, 20% sold at MSRP with what Wells Fargo calls “minimal discounts,” and 10% sold at a premium to MSRP. Twenty percent of the dealers said they were selling at least some new models below MSRP, compared to 13% in the Q211 survey by Wells Fargo, and 18% in Q310.

Here are other findings from the survey:

  • The ratio of used to new bikes has improved from 2:1 to 1.75:1.
  • The price gap between used bikes and new bikes has continued to narrow. Used bike prices were stable through the 3Q after rising for much of the last 24 months, according to Conder.
  • Price discounting does not appear very likely in the near term, says Conder, “given clean dealer inventories, increased demand and management’s aggressively managing supply in line with demand.”
  • Used Harley bike prices stabilized in Q209 and have increased since then to the point where new bike demand “is positively impacted,” notes Conder. Since Q209, he says, dealers reporting flat or increasing used bike prices jumped from 25% to 88% in Q311.”
  • Prices of used Harley’s are likely to continue to increase, year over year, over the next year, Conder predicts.
  • Credit standards of Harley-Davidson Financial Services (HDFS) have remained basically stable between the second and third quarters this year, according to the dealers.

Harley common stock has traded in a range of $28-$47 over the last 52 weeks. It closed at $34.33 on Friday, Sept. 30, 2011. JD

Major Management Changes at CFMOTO

October 8, 2010

CFMOTO, the Chinese powersports company, has made several top level management changes to its U.S. subsidiary based in suburban Minneapolis, according to sources close to the company. The changes include beefing up the management team with outside professionals and a shift in responsibility for Lev Mirman, the former president of the U.S. operation, CFMOTO Powersports.

Mirman retains his equity position with about a 10% ownership of the U.S. operation. Under the new setup, Mirman will focus on legal and regulatory concerns involving CARB, DOT and EPA.

The company declined to discuss the changes in any detail when I contacted the CFMOTO office today.

The new management team is designed to increase efficiencies, and help the company expand its product portfolio into new areas beyond its ATV, scooter and motorcycle products, sources told me. CFMOTO has about 200 U.S. dealers, down from a high of about 215, but it has been adding dealers this year, the company said.

CFMOTO is one of the few Chinese manufacturers that has established its own subsidiary in the U.S., similar to the Japanese models in which the manufacture manages its own brand through its own manufacturing and distribution channel.  Most other Chinese and Taiwanese companies simply hire independent importer/distributor companies to handle their products in this market.

CFMOTO’s parent company,  ChunFeng Holding Group, Ltd., was established in 1989. The group has eight wholly-owned subsidiaries engaged in manufacturing of liquid cooled engines, scooters, motorcycles, vehicle parts and accessories, and investments. The largest engine it manufactures is a 500cc unit, and the smallest is 50cc. JD

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

Allstate Insurance video: disturbing and hypnotic

June 16, 2010

OK, I’ve seen this video a couple of times now and each time I’m mesmerized. I also find it pretty disturbing to watch, especially when I do the mental gymnastics to picture me or anybody aboard one of those bikes. I get the concept and the message that’s being delivered, but there’s just something about it that’s off-putting. 

Looks like I’m not alone in my thoughts about this. Viewers of Allstate’s YouTube site (clicky here) have left many such similar comments. I’m very interested in knowing what the readers of this blog think about this video. What say you?

Surging Mower Sales: Good News for Powersports?

June 14, 2010

Joe Delmont

Now, that’s a good question.

If a homeowner is willing to pop for a $10,000 deluxe lawn mower, does that mean he’s likely to spend a similar amount for a motorcycle or a SxS vehicle this year? Or does it mean that the purchase of one fancy motor machine is enough for now? I don’t have the answer, but I just the fact that consumers are spending 10,000 bucks for a machine with more power and features than they need— really an unnecessary purchase— seems to bode well for our industry. It could be another positive sign of sales improvement over the next few months.

The Wall Street Journal today reports that after double digit decreases for the past two years, U.S. shipments of riding mowers are expected to climb more than six percent over the next two years. At John Deere, for example, sales are “far exceeding” forecasts, according to the story.

We’re not talking basic grass cutters here; the machines that sell have iPod compartments, chrome hub caps, comfortable seats, plenty of power and agility and sell for more than $10,000. “It goes well beyond cupholders,” notes a representative of the popular Cub Cadet brand.

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Italian Motorcycle/ATV Show Opens in China

June 10, 2010

Friday is Kick-Off Day in Beijing, China, for an innovative new international motorcycle and ATV show and conference driven by—hold on here— the Italian motorcycle industry. “EICMA China—The Motorcycle Show,” runs Friday through Sunday, June 13,2010. It’s the first ever show for EICMA outside of Italy. EICMA is best known for putting on the the world’s largest motorcycle show every November in Milano, Italy, when several hundred thousand consumers and trade representatives walk the floors looking at the latest machines and accessories.

The trade fair and conference being held at the National Agricultural Exhibition Centre of Beijing is an alliance of EICMA and two major Chinese partners: the Chinese Chamber of Commerce for Motorcycle (CCCM) and Genertec Advertising& Exhibition Co.Ltd. The goals of the event are to show foreign products to the Chinese market and to bring together representatives of several countries to discuss powersports issues relating to motorcycles and ATVs.

On the motorcycle side, the 6.5 hour China International Motorcycle Industry Summit will focus on emissions and on building the Chinese market for motorcycles. A motorcycle ban was instituted in Beijing in 1985 and expanded has been expanded to more than 170 cities in China. It’s estimated that the ban reduced sales by 4 million units annually.

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Here’s Another Excelsior-Henderson Website

May 31, 2010

This One’s Been Up and Running Since 2001

The other day, I wrote about a new website launched by Dan Hanlon and others to preserve the heritage of the Excelsior-Henderson motorcycle mystique. Here is the site, and you can read the post about it here. That posting drew lots of visitors, in part, I’m told, because of the existence of another site, www.superxowners.com, launched about 10 years ago.

Dan Hanlon and his brother, Dave, are founders of the Excelsior-Henderson Motorcycle Manufacturing Company that was based in Belle Plaine, Minn., an hour’s drive south of Minneapolis, and a pleasant bike ride from the home of The Motor Company in Milwaukee.

Nick Trumbo and his son, Trevor, launched and operate the SuperX site. While both sites are remarkably similar in their overall designs, there is one interesting difference: Dan Hanlon runs the new site, while his brother, Dave Hanlon, and Dave’s wife, Jennie, are involved in the Trumbo site.

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Excelsior-Henderson Website Is Launched

May 24, 2010

Remember the Excelsior-Henderson Motorcycle Manufacturing Company, the exciting Minnesota start-up that burst on the motorcycle OEM scene before going bust in the early 1990s? It was a compelling story about a small group of enthusiasts who challenged the major manufacturers and captured the hearts and minds of riders and investors before running out of cash.

Don’t get me wrong. The company’s not back, as far as I know, but it’s remembered on a new website developed by Dan Hanlon, one of the company’s founders. The website is http://www.excelsiorhenderson.com. You can see it here.

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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.

Customer Service Isn’t Dead

April 10, 2010

It’s Alive and Blossoming at Your Apple Store

It’s easy today to wring your hands and really despair over the state of customer service by America’s retailers. Plenty of examples of disinterested, couldn’t-care-less service practices pop up every day. But things aren’t as bad as they might seem. Actually, customer service is offered at a very high level in some places. Just visit your friendly Apple computer store and you’ll see what I mean.

It’s refreshing if you’re a consumer and educational if you’re a retailer.

First, a disclaimer: I’ve been an Apple guy since I bought my first computer 25 years ago. It was a MacIntosh SE, the third machine in the revolutionary MacIntosh line. I never regretted that purchase, nor have I regretted any of the many Apple purchases I’ve made since then. Today, I’m a dedicated iPhone user; in fact, I do almost as much work for Dealernews and its website on my phone as I do on my laptop.

Back to my point: Apple has two things going for it: It knows how to meet market needs and it knows how to take care of its customers. Let’s talk about customers.

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Online Retailers Getting Better at Service — How About You?

April 1, 2010

Does your dealership sell online? How’s your follow up? How are you helping your customers with the buying experience or are they just free to roam and stumble?

Thought we’d pass along this bit of info from Internet Retailer magazine.

According to E-tailing Group Inc., more online retailers have made their websites easier to shop and are responding promptly to consumer inquiries. The group’s 12th annual Mystery Shopping Study found that such top retailers/e-tailers as REI Co-op and Blue Nile responded to customer e-mails in less than 30 minutes.

The study also found that the organizations E-tailing Group 100 study group allows shoppers  to sort site search results by price, category and brand. Also, most of these businesses link to social networking sites.

Other interesting findings? About 60 percent of the businesses in the study group over guides, how-to content with audio and/or video on their websites. And a bit more than half offer video product demos on product pages.

Keep in mind that these are the websites/retailers training your customers on what to expect from their internet shopping experience. Just as Nordstroms, Banana Republic, the Apple store, and Best Buy are training them what to expect of brick & mortar retailers.

In other words, as time goes on and as new generations of people get into powersports — or when older enthusiasts return to riding — they are going to have an entirely different set of wants and needs from their retailing experience. What does this mean for your dealership? The best way to find out is to go out and shop the major retail stores in your area and take careful note of how you’re treated or mistreated. Steal, beg or borrow new ideas from those businesses who are competing with you for your customers’ expendable cash.