Northwest Moto Outlook 2012
The new economy is tough. Today, dealers and service providers
have to work harder than ever to keep a customer, because there are
less of them and they have less disposable dollars to spend.
So good customer service is key—right?!
I guess a little
innovative thinking helps, too. Let’s look at a few scenarios and see
if that holds true.
What a shame to hear about Portland Motorcycle closing their
doors. The word on the street is the owners realized they could sell the building and be better off taking the
profits than paying the monthly overhead to keep the doors open.
But what was holding them back from being profitable? Was it the new
economy?
We have on file Sound RIDER! dealer surveys for all the dealers
in the Northwest going back to 2000. Every two years we ask
you, the readers, to rate the dealers. A look back at the Portland
Motorcycle Company dealer surveys reveals that they’d been digging
their own grave for quite some time. The company built a reputation
for low balling its competitors (which makes it hard to work with
your competitors later when you need to make a bike swap). Customers
would get a bike cheap, but when they came back for parts,
accessories and service it wasn’t always a pretty story. Their
customer service lacked, and in the end, customers went and did their
business at the competitors like Western Oregon BMW, Pro Caliber Motorsports and Cascade Motorsports.
So was it the new economy that sent Portland Motorcycle Company
to its grave, or the lousy customer service they were dolling out?
No doubt a combination of both, since they could maintain their
business prior to economic bust of 2008, even though their overall
customer service had been lacking for years before that.
On the other hand, dealers like Ride West BMW, Ducati Bellevue
and Moto International continue having banner sales when things are
supposed to be tough. How do they do it? With less customers walking
in the door there’s more time to spend with the customers they have.
Many of these customers consider the
employees friends, not just staff. And that goes all the way from
the sales floor to the parts counter and back into service. A focus
on good customer service has helped these dealers maintain
profitability during the roughest economic periods in most people’s
lifetimes.
The issues don’t just lie at the dealer level. There are
problems at the manufacturer level as well. If you’re like me, you
might own a Japanese motorcycle or five. I think Honda, Yamaha,
Suzuki and Kawasaki have all got their acts together in the last two
decades when it comes to dependability. But when it comes to new
model releases for the US, I just gotta ask—what the hell
happened?! Let’s look at the fast growing dual sport market to
provide some answers.
Honda came out with the Transalp and NX models back in the late
80’s and promptly pulled them from the US market after only two years.
That left the door wide open for BMW to come in, and by 2000 they
owned the 600cc and 1000cc+ dual sport markets. And Honda never came
back with a dual sport for the US, even to this day, unless you call
regurgitating the same old XR650R for the last 25 years filling the
need, which it does not. You need an inseam of 40 inches just to
touch the ground with one foot when sitting on the bike stock.
Kudos to Kawasaki too for holding steadfast to the same bike for
several decades with the KLR650. It’s early 00’s makeover simply
brought it new bodywork, but not many changes in technology. The bike has proven to be a dependable machine over the
long haul, as long as you don’t tinker with modifying the
engine too much.
When Suzuki announced the VStrom there was plenty of
excitement. But a three prong rim really isn’t suitable for a lot of
dirt riding. Then they released the update. What happened? When is
the bike going to get the spoke wheels it deserves?
Yamaha’s introduction of the Super Tenere’ was the first real
competitor to the BMW R1200GS models. But what we’ve got here is an
oversized adventure bike that’s a bit too much for most riders to
deal with off the pavement. Why didn’t the company opt to bring in
their 800 model as well, which really would have created some
competition for the better selling F800GS as well as Triumph’s new
adventure line up?
Hopefully the above examples provide some insight to the failing
marketing mentalities that exist in the Japanese manufacturers. And it’s not just in the dual sports.
Realize too, that as the cruiser segment continues to decline, each
one of these companies has spent plenty of R&D to bring forth new
models for that market, leaving dealers with inventory they can’t
sell. Eventually they're forced to blow it out at no profit pricing
when it’s past its model year.
So with a tough economy, Japanese manufactures are making it even
harder for dealers to make a profit by putting a stranglehold on
which models they provide to the U.S, and that’s pathetic. Understand
too, that profit margins on Japanese models are less than European
brands.
And then we see the cards fall at Renton Motorcycle Company. The
company really built a powerhouse of sales and backed it up with a
good staff and well trained techs throughout the 00s. But all that
floor space is not conducive to what the manufacturers are providing
model-wise these day. For 2012, the Lamphere family planned to
condense all their motorcycle lines to the south end of the building
and bring their Honda Car Dealership, currently located up the road,
into the north wing of the building. American Honda blocked that move
and the motorcycle dealership closed up shop entirely. Did American
Honda actually think that having a motorcycle shop under the same
roof was going to actually undercut car sales? Silly. It could have been a great magnet for getting some bike owners into a
Honda car.
Meanwhile, Ducati, BMW, Triumph, Aprilia and Moto Guzzi are all
poised with exciting new models for 2012. This summer, Eastside Motosports opted to shed the Yamaha and Suzuki lines in lieu of
making Ducati its sole line. The reasons are obvious. There’s lots
of life in the European lines and dealers are able to make a higher
profit on the goods when they sell them.
If you see a Euro dealer holding any of last year’s models in
inventory today, you might consider that a sign of their overall
customer service. South Sound BMW, who always rank high in our
reader's eyes, was scrambling last summer just to get more new units
to put on the floor. This winter they are working with their sister
shop, Ride West BMW, to provide ultra low financing on new bikes. If
they sell a lot of bikes this winter, their spring and summer
allocations will increase and they will have the bikes they need to
sell during those months as well. As you can see, it’s a win-win for
the customer and the dealer both, in more ways than one.
The prognosis for 2012: it’s going to be more of the same. We’ll
see the euro lines excel, while the Japanese brands will continue to
flounder. As for me, I’m holding onto the bikes I own and have no
plans for a new bike in 2012. But you can be sure I’ll be out
spending money, supporting my favorite habit and doing it with the
dealers I enjoy doing business with month after month, year after year.
Ted Knecht/Winter 2012 |
