Northwest Moto Outlook 2012

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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

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