Remember the tag line for Jaws II? “Just when you thought it was safe to go back in the water…” Well, you don’t have to worry about sharks, but if you’re a dealer in new motorcycles, and you’re cautiously optimistic after surviving the worst downturn in motorcycle sales in 25 years, steel yourself for another kick in the berries.
The Earthquake, Tsunami and nuclear disaster that struck Japan two months ago isn’t in the headlines every day, but its effects are still being felt. The affected region is home to many large and small component manufacturers, so even if a motorcycle factory isn’t in the damaged (or worse, radioactive) area, it’s still causing problems for Japanese motorcycle companies.
Yamaha dealers I have spoken to are complaining that there is no more 2011 product coming at all. The new Super Ténéré, originally to be delivered to lucky deposit-holders in April, will now likely not be delivered until October or November—deposits may be refunded to customers who ask for it. Yamaha Motor has acknowledged that “supply could likely be tight.”
Kawasaki told me that “adjusting our production schedule is routine for us, so at this point we are adjusting as needed.” Nevertheless, one Kawasaki dealer I spoke with indicated all of his remaining [2011] orders are canceled. In other words, if it’s not in his showroom or in his warehouse right now, it’s not coming.
Honda is sticking by the somewhat vague statement it made on April 1: motorcycle production in its Japanese factory resumed on March 28, but “The parts supply to the factories remains very fluid and we are monitoring and managing this process carefully. Global production of American Honda Powersports products should not be impacted for the foreseeable future, but we will keep you informed of any supply issues if they should arise.” In spite this proclamation, a multi-line dealer told me his orders for the CBR250R have been pushed out into June. Is it because of supply problems? Possibly, or possibly not.
Suzuki didn’t respond to my query (was it something I said? Or the 100-yard rolling burnout on the Burgman scooter at the last press event? I swear that wasn’t me…), so we can’t say what’s going on with that brand.
A different dealer principal with a multi-brand store told me the shortage of product is due to more than just the disasters. “When the economy started to fail [in 2008], the OEMs were ramping up production to meet the demand” they had expected based on several strong years [sales had been strong and rising prior to that time]. This led to “warehouses filled with non-current product, so in response, they had promos and dealer incentives to move bikes, and they cut back on production.” That strategy backfired when the quake struck. This dealer went on to state “Warehouses are empty and they can’t fill them. There’s going to be a real shortage as the economy comes back, and [the OEMs] are downplaying how devastating this is.”
This dealer reported that of the 12 CBR250R orders he placed for 2011, 10 were canceled. “I have full-page ads and I can’t supply the demand.” Only 60 percent of his total Kawasaki orders have been filled, mostly bikes built before April.
That story was echoed by yet another Yamaha dealer I interviewed, who placed a large order on April 1st. Everything from that order was canceled except for 5 scooters, 3 cruisers and a single YZF-R6. In a normal year, he sells between 40 and 60 R6s, but only eight 2011 R6s will roll through his doors.
BMW dealers may be experiencing delays and difficulty getting product. A BMW dealer I visited had a paucity of new models on the floor, and the sales manager told me that he had been vigorously trading with other dealers to keep models in stock and meet customer demand. As for the sizzling new K1600 six-cylinder touring models, delivery seems to be delayed on these as well. BMW North America says there is nothing unusual about the supply of BMW models for 2011 or 2012, but it’s telling that a recent request to test the G650GS may be turned down, as the units designated for the press fleet may be instead sold to hungry dealers.
Triumphs and Ducatis are also getting thin on the ground. A salesman at one dealership told me Triumph stopped producing 2011 models with about half of his orders unfilled. “I could sell three Street Triple R’s right now,” he told me (I’m withholding his name and the name of all the people and shops I’ve visited or called to protect the dealerships and personnel from any negative impact on their business relationships with OEMs) but there are none to be had. He’s also tried to locate models to trade or buy from other dealers, but, according to him, they’ve “sold out every model, at every dealer across the country.” And still, no Tiger 800s have arrived in his dealership, and his shop has only been promised one. Fortunately, 2012 units will start arriving as soon as August.
As for Ducati, the Bologna firm is selling bikes as fast as its little red heart can make them. Ducati North America claims sales are up 50 percent for 2011, and while that’s great for Ducati, the firm can only build as many units for the USA as it plans for, as USA models can only be sold in the USA and vice-versa. The factory plans production numbers based on dealer orders, and dealers were probably feeling pretty conservative when they sent in their orders last fall. I’m guessing we’ll see greater numbers of Ducatis for 2012.
So what’s the bottom line? It appears Japanese OEMs were hit with a double whammy. To start, they may have been on the tail end of cutting back production due to the poor economy in an effort to clear existing inventory when the earthquake/tsunami/nuclear disaster struck knocking out factories and/or important component suppliers. The Europeans, on the other hand, although they may also have been, to a somewhat lesser extent, impacted by a shortage of Japanese-sourced components, appear to have planned production levels for the U.S. market (based on pessimistic dealer estimates) that are, in many cases, substantially below demand.
If I were savvy enough to give dealers advice (and I’m not), I’d tell them to invest heavily in used inventory and work hard to hold their profit margins on the units they still have. I also hope they can weather this particular storm and last another year—anybody who has kept the lights on this long deserves to stay in business.
yeah I went to a honda shop the other day to look at race quads because the yamaha shop in indy said that they can not get any 2011 450’s. The sales lady said that honda does not make 450’s and has not since 2009, I thought it was a joke untill I looked on honda’s web site. Very strange.
There are a ton of 09,10 and 11 models for sale here. You can get a R1 09 on the road taxes in for just under 11k. It retails for 16800.00 normally. Some dealers have KTM stock from 2007-8. Purchases are being made but not at retail.. not even close.
re: “Purchases are being made but not at retail.. not even close.”
great reminder, let us not confuse “revenue” with profitability.
—“Bill says:
May 12, 2011 at 4:56 am
You can find a plethora of 09 models at thousands off right now ” —
I can somewhat agree. I saw a new ’09 Versys for $5,300 last weekend at a dealeship. It’s kinda ugly (but I ride a vstrom so I can handle ugly) and I hated the color, but a “new” motorcycle of that caliber for 5 grand? I’m sticking with my ’05 vstrom 650 and ’03 Ninja 250 at the moment. But if I was in the market for a new bike, that was a smokin’ deal in my opinion. The ’11’s are going for over $7,500. That’s almost a 1/3 discount off the current model.
I bought my 2008 ZX-10R anticipating this being a problem…specifically the Yen’s strength against the dollar. However, the Tsunami really blew things as did high gas prices. Perfect storm as they say. Too bad I sold my ZX-10R a few months ago. I do currently have a couple 250 ninjas and have a 2005 for sale right now @ $2500 and I’m getting plent of emails on it. A few months ago I would have only been able to ask $1600-$1800 or so.
It will be interesting to see what happens with the market over the next 12 – 24 months and which manufacturers can react quickly and capitalize with product sales.
My guess is the Triumph 800s might have the best chance. Exciting new products in a verified segment with demand.
Bummer if you want to buy a new bike. You’ll be paying full MSRP or more depending on demand for the bike. And with the dollar to yen so poor causing the high MSRP’s you better bring the vaseline with you to the dealership. I still can’t get over $11,500 for a GSXR 600.
re: “I still can’t get over $11,500 for a GSXR 600.”
no worries, once you make a conscious decision to “value” motorcycling, you’ll see that price for the bargain that it is. try it… it works.
I could say that this would be an opportunity for the small or emerging brands such as Hyosung, QLink, etc. to make some sales, but as I understand it, they too have cut way back with importing to the US because of such poor sales in the last year or so because of the sucky economy. So they may not have inventory either to take up some of the slack.
re: “they too have cut way back with importing to the US because of such poor sales in the last year or so because of the sucky economy.”
or their sucky product. the japanese and the europeans have set the bar extremely high. in many ways it’s HIGHER than even the automotive sector. the chinese misjudge the hows and whys surrounding the “american” consumption of motorcycling.
Have you recently checked out any of their products? Some of the first ones were not so great, but depending on the brand, they now pretty much rival any one elses as far as quality and finish. Performance on the sport bikes are even rated better than comparable Japanese models.
admittedly, i have not recently. something i will have to do. in the words of vincent vega, performance better than the japanese is a “bold statement”. without any kind of ongoing R&D (ie. the crucible of racing), my intial reaction is tall order this.
Considering the Hyosung 650’s are heavily based on the Suzuki SV & have won the CCS Southwest Light championship, not to mention Thunderbike & ULW Superbike, they might be worth a look.
And Hyosung is built in Korea, not in China. Pretty strong quality control. Not quite Suzuki level quality, but not quite Suzuki price either….
You can find a plethora of 09 models at thousands off right now
Ya, but they are drying up and there are very few 2010’s.
Some small dealerships may find this is the last straw and throw in the towel? I hope not.
Small dealerships have been hurting for years. Too many customers are willing to buy mail order to save money & don’t seem to realize the impact of spending their dollars with Motorcycle Superstore, Cycle Gear, Jake Wilson, etc. It’s not a lot different than the WalMart effect…
Support your local dealerships – even if it costs 5% more, it’s worth it to have a place to hang out or to take your bike when you get over your head!
The problem in my area (se idaho) is that your not looking at paying 5% more for items from a local mugger (dealership) your looking at 50-100% more on many accesory and apparel items, and paying sub msrp for anything but a last years model sled is nearly unheard of.
when I bought my 03 crf 450r I drove 90 miles to get it for msrp, local dealers wanted 300-500 above msrp with 400-500 in “dealer innvoicing and prep” thrown in ontop of it, when I asked what kind of deal they could make me, they promptly told me to try and find it elsewhere as they had no problem getting there asking price out of em..
if a dealer can get within 10% on tires filters goggle’s etc I’ll spend my money with them, the last time I bought anything major from a dealer I paid $75 more for an e-series exhaust (I smashed the stock header) had the silencer in a week and didn’t get the header until 3 months later… I could have ordered it from rockymountainmc and had it in 2 days for 75 bucks less shipped…
moral of the story is, it’s all dependant on the dealer, in this area the major volume dealers regularly screw you and tell you to like it…
it has never been written that motorcycling is a “cheap thrill”. it’s an expensive “priviledged” thrill for those who can afford it. unfortunately, not all can afford it nor are honest with themselves regarding this inability.
Really? Then why have been able to ride MCs for 47 years relatively cheaper than cars? But do admit that tire costs, etc., are no longer near as cheap as they used to be.
Even though the exciting new products will be scarce for a while, “non-current” models still on the showroom floor are still shiney new bikes. Most 2008 or 2009 bikes are pretty competent, and they have been selling at some very fair discounts. If one of these would do the trick, better get it before the looming shortage drives their prices back up.
Who would have guessed that a natural disaster would make thing even worse for the Japanese bike industry.
nobody is buying bikes and there are tons everywhere, wake up….
People ARE buying bikes. A Triumph dealer near me did very well last year into this year. He also sells BMW’s. A Harley dealer near me said he sold 50 bikes per salesman in January alone. I went to a Honda dealer and there were sold tags on many bikes. Another said he sold three Kawasaki Ninja 1000s. Certain bikes are not selling, like the the Honda VFR1200. All depends on where you are. Some dealers did go out of business. But here around Boston, bikes are selling well.
I work for a multi-line dealer. We’ve been selling more than 200 bikes a month for more than a few months now. Bikes are definitely selling again, and we’re starting to feel the pinch of lack of inventory. Just like the market crash though, we’ll keep plugging away and get through it. But yes, people are buying bikes. Lots of them.
i concur, in my area 3 crossplane R1’s were picked up last saturday 5/7. if i hadn’t seen it wit me own eyes i wouldn’t have believed it. my guess is that external stressors like high gas prices, natural disasters, and giving known terrorists their comeuppance has a way of making people realize that money has ZERO value when you’re 6ft under. like the wise man says, ya can’t take it with ya.
Nice, the resale value of my bike is going to rise..
double edged sword unless you plan on getting out of the sport ro have an inventory of rides