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Archive for the ‘2009 Models’ Category

Springfield-era Indian Motorcycle

Back in 2004, Stephen Julius, a British-Italian financier with a talent for extracting valuable brands from the junkyard (remember Chris Craft?) did just that as he scooped up the Indian Motorcycle marquee and brand rights.  Partnering with Mr. Julius would be his Harvard Business School classmate Steve Heese.  The two would be the 5th set of entrepreneurs who purchased the intellectual property rights and have tried to resurrect the iconic Indian nameplate.

Last week I received an email from Indian Motorcycle.  They plan to provide an exclusive VIP space in downtown Sturgis for any motorcyclist who rides/trailers a Springfield-era Indian motorcycle to the mother of motorcycle rallies.  It’s a cool idea to reinforce the relationship and I would anticipate that rally attendees will be able to stroll through the area and gawk at the vintage motorcycles.  I’m planning to attend the rally and hope to snag a couple of photo’s.  You can participate by sending an email to Etracy at indianmotorcycle dot com if you plan to attend Sturgis and want to participate in the VIP area.

The email message led me to do a quick scan of the Indian.com web site to see what’s new.  What I found was shocking.  Marketing heads should roll!

The main page is stuck in 2009!  Yeah, I know they aren’t on the same release schedule as other motorcycle manufactures, but the view is the same as it ever was.  The news/press release page is stale.  I’m not talking about “brown bananas” stale here… it’s full on AWOL.   Not a single press release since January 2009?  That’s 17 months?!   In April they re-launched on the West Coast and posted some Facebook banter along with tweets, but the lack of any pure play press release boggles the mind.  This is at best a scattershot approach and I don’t know any 20-something willing to shell out $30,999 for a Bomber in this current economy.  This “new-wave” thinking to do all your evangelizing via Facebook is… well ‘da bomb… not meant in a good way.

I’ve been critical about over hyping products in this new-era of marketing, but if the good folks at Indian plan to make their motorcycle company the de-facto standard in premium cruiser motorcycles a little more press information now and then to let us know you remain alive and well would be a good thing.

Photo courtesy of Indian.

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K1200 GT

This week Toyota paid a $16.7M civil penalty for not notifying the NHTSA of a dangerous pedal defect.

Certainly Harley-Davidson has had its fair share of defects and needed to recall motorcycles in 2008 HERE, 2009 HERE and then again in 2009 HERE.

Now it’s the German motorcycle manufacturer BMW’s turn.

This week they launched a global recall of 122,000 motorcycles owing it to front brake problems.  The company uncovered a risk of leaks in the braking systems on its K1200 GT motorcycles and other models built on the same base.  The recalled models are R1200 GS, R1200 GS Adventure, R1200 R, R1200 RT, R1200 ST, and K1200 GT.  The recall concerns motorcycles built between August 2006 and May 2009, some of which have already been checked, according to a BMW spokesman.

“Over time, it emerged that even corrected braking systems did not resolve the problem 100 percent,”

The culprit seems to be vibration generated by the motorcycle’s operation which were found to cause leaks that affected the front brake.  The company stated that rear brakes continued to function normally.  BMW has not heard of any accidents linked to the problem.

As of this writing, BMW has yet to post information to the Office of Defects Investigation or onto the NHTSA site (Safecar.gov) about this recall notice.

UPDATED: March 17, 2015 — Edward Walker of the About Automotive Industry Action Group provided this:  Complete Road Safety Overview: Global Issues, Safety Laws, New Road Safety Measures, Car Safety Technology, Car Safety For Kids, Teenage Drivers

Photo courtesy of BMW

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Harley-Davidson reported its first quarterly loss since 1993!

No surprise given home foreclosures, unemployment fear, stalled economy and ice-cold demand for high-end, premium priced motorcycles.

For Q4’09, H-D reported revenue of $764.5M and a loss of $147.2M.  Affecting Q4’09 results was the previously announced 53.1% reduction in motorcycle shipments from the year-ago period and $167.1M in restructuring, on the Buell end-of-life costs and the MV Agusta discontinued operations.  For all of 2009; revenue was $4.29B compared to $5.58B in 2008, a 23.1% decrease; income was $70.6M in 2009 compared to $684.2M in 2008, a decrease of 89.7%.  And don’t forget all the non-cash charges related to Harley-Davidson Financial Services (HDFS).

There was a surprise in today’s financial call.  Keith Wandell, (H-D President and CEO) stated: “We also feel good about where we’re at.” Huh?

Isn’t that the kind of thinking that would have Kodak saying that they’re relying on film, or newspapers saying they’re relying on print, or music labels saying they’re relying on CDs.  Just because you can’t see the cliff from where you are, that doesn’t mean it doesn’t exist.  Remember when everyone said no one would read a book on a hand-held electronic device, and suddenly now everyone’s saying the opposite, Kindle’s got so many new competitors and Apples yet-to-be released tablet gets more press than a starlet without panties getting into a car outside a pub.

Mr. Wandell may be referring to his reactive changes the past 8 months and the hope they will restore growth. I’m skeptical, and time will tell if they are the right decisions or if management can execute with a renewed intensity.  But isn’t that just the point.  REACTION to events vs. pro-active change?!  From the outside looking in, the majority of action the company has taken seems REACTIVE.  They curb demand, shrink manufacturing, reduce structural costs, pullback on spending, slash and cut employees, sell off businesses based more on profit margins not on the contribution to the customers soul.  Motorcycle sales are down more at H-D than other manufactures.  Why?

There is a saying: “Businesses should concentrate on their customers’ needs, not on specific products.” — “Marketing Myopia” (1960); Theodore Levitt, Harvard Business School

My opinion is that H-D needs to relearn customer needs.  If you desire to appeal to your core fans, then they’ll want to know that you are in it for the motorcycle hobby/sport, not just the money.  Stop calculating how to get to millions of revenue in a spreadsheet by maximizing this and that.  Just create something rawly desirable, then the revenue will come.  A great hit is more powerful than any marketing campaign.  People don’t need motorcycles, but they want one.  When the product is great.  When it speaks to them.  When it’s seen as integral to their lives.  You’ll have something!

Photo courtesy of JupiterImages.

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Out Of Busines

Harley-Davidson has undergone a grueling restructuring over the last year to better compete amid less demand.

The economy and housing bubble depleted consumers’ wealth and left a lot of folks unwilling to spend on Harley’s high-end bikes.  I anticipate that Harley will remain at least three quarters away from achieving positive retail sales trends in the U.S., especially given the companies lapse of a successful promotion in the first quarter.

I’m genuinely concerned.   More so about the decay of prosperity in the local motorcycle shops, parts suppliers, and dealers.  Be it routine service or customization, the local shops most often operate on their ability to make sure YOU are happy. They know if you leave satisfied, you will tell your friends about your experience with the shop.  Word of mouth is an integral part of a shops reputation in the local area and carries a lot of weight in generating new business.  “Giving” local shops rebuild, repair, or service work on your bike, while appreciated, is not going to keep a shop in business.   The industry at large will need sales to rebound or the local motorcycle businesses will lay-off their skilled workers or worse – close down operations.

Unless you own or work in a local shop, you have no idea of what it takes to stay in business.  Facility overhead, staff salaries, phones, heat/electricity and advertising are things everybody thinks of.  But what about insurance, hazmat costs, licensing fees and money paid to local city and state governments for all the TAXES they require?

And speaking of taxes, I’m very skeptical of government spending our way to prosperity.  Increasing the tax liability on small business owners does nothing to encourage businesses to take care of their employees.  In fact, in Oregon there is a special ballot measure on personal and corporate tax increases.  In my opinion this one-size-fits-all legislation may well force motorcycle shops to shut down.  You’ve heard of Measures 66 and 67 and read more about net profits and corporate structures to last a life time so I’ll avoid explaining the details.  Instead, let me ask a simple question.  Did you get a raise last year?  I know I didn’t.  And if you’re lucky enough to still have a job, I’m willing to bet that you didn’t either.  Most likely you took a pay cut.  Or had your hours reduced.  Or were required to pay a larger share of your health insurance coverage.

At the same time you and I were taking cuts the Oregon Legislature voted to increase the tax burden on higher incomes and businesses by $750 million dollars, it also authorized $248 million in pay raises for state employees.  Yep, that’s right.  State workers got raises during the worst economy we’ve been through since the Great Depression.

Still don’t care?  Then how about this.  The legislature approved a budget that increased state spending by 9%.  If I was operating a motorcycle shop I can assure you that if my business increased 9% over the past two years I’d be most happy.  The legislature increase is about $4.7 billion more than the previous two years.  Time for another question.  Do you think state services have improved as spending has increased?  Are the schools better? Is our infrastructure better?  At a time when Oregon has lost over 120,000 private-sector jobs in the past 18 months the state has added 10,000.  It would seem that in Oregon, government has become the ONLY growth industry!

I’m not sure about where you live, but in Oregon during the winter many think about what customization you can do to your bike in the off-season.  Before long you’ll be sitting at your MacBook, surfing the web looking to make some modification dreams come true.  You’ll likely have questions and find yourself on the phone calling the local motorcycle shop trying to get all those questions answered.  Before long you’ll have spent most of an hour discussing scenarios, getting advice and prices from the local shop expert.

What if they don’t answer your call because the parts expert is no longer employed?  What if they’ve gone out of business?

We’re told by the “spinsters” in Salem that the state is making “budget cuts.” Huh?  In fact it means simply they can’t have as much of an increase as legislators would like.  A 9% increase is NOT a cut!  It’s my opinion that the private sector creates wealth.  Government does not.  I hope you’ll join me in voting NO on Measures 66 and 67 to send a clear message to the Oregon legislators that a CUT means CUT.   

Increasing taxes on motorcycle shop owners means more will go out of business.

Source: Statistics from The Oregonian

Photo courtesy of Flickr.

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The U.S. motorcycle market endured some tough times as a whole in 2009.  According to recently released industry sales figures U.S. motorcycle sales declined 41% this past year, however, a couple northwest Harley-Davidson dealers were named among the Top 100:

MONTANABeartooth Harley-Davidson/Hi Mountain Recreation (Billings)
WASHINGTONDowntown Harley-Davidson Renton (Renton)

Non-Harley dealers in Oregon – Bend Euro Moto (Bend), Moto Corsa (Portland) were named to the Top 100 along with Renton Motorcycles (Renton), Skagit Powersports (Burlington), and South Sound Motorcycles (Fife) all based in Washington.  Interestingly there were no dealers from Idaho, Utah or Nevada.

The Annual Top 100 Awards is a juried competition that recognizes dealerships for the achievements in retail design and merchandising, e-commerce, customer service, community involvement and general business management. More information on the competition can be found HERE.

Congrats!

Photo courtesy of Advanstar Communications Inc.

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Marketing theory distinguishes between two kinds of promotional marketing – “push” and “pull.”

A “push” strategy uses the company’s sales force and trade promotion to create consumer demand.  A “pull” strategy is one that requires heavy advertising spending and consumer promotion to build up demand for the product.

It’s the beginning of a new year and the start of a new decade so Harley-Davidson rolled out a new $500 bonus credit for potential consumers to “push-or-pull” a competitor brand trade-in to your nearest dealer.  The offer expires January 31st and covers untitled 2008, ’09 and ’10 models.  Of course read the fine print on the trade-in site for all the details and restrictions.

Photo courtesy of H-D.

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“…They may be disappointed now, but someday they will be able to look back and see what great things were accomplished this season.”

This quote from Harley-Davidson Racing Manager Anne Paluso who this past November was commending the racing team after Eddie Krawiec rode a Harley-Davidson V-Rod to win his fifth NHRA Pro Stock Motorcycle event at the Automobile Club of Southern California NHRA Finals at Auto Club Raceway.

Anne Paluso was laid off Monday.  Harsh!  Ms. Paluso had been involved with H-D’s racing activities for the last 10 years and had been with the company for more than 16 years.  I’ve written about other budgetary racing changes HERE.

Harley-Davidson spokesman Paul James was quoted Monday afternoon to say, “I can confirm her position was eliminated today due to budgetary reasons and that she has left the company,”  and went on to say “Racing teams will continue to report to [Vice President of Core Customer Marketing] Bill Davidson. Our plan is to go racing in 2010 in dirt and drag racing, but final plans have not yet been set.”

At this accelerated budgetary reduction pace it’s unclear if H-D can continue to be an influential motorcycle in the professional sport.

Photo courtesy of H-D.

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