Becoming a multi-line motorcycle dealership ?

Frank, as an avid motorcyclist and owner of a few bikes over the years, I've had the pleasure and misfortune of dealing with the ins and outs of the dealership circuit in Toronto Canada, which has a very healthy motorcycle market.

First, lets exclude Harley Davidson from this commentary, because they have a market and brand of their own, and seem impervious to many of the factors which the rest of the manufacturers compete with. Also, I am not familiar with their dealer structure, although I know for the last 10 years they have been selling very well and profiting also.

With the other dozen or so American, and Japanese motorcycle manufacturers, sales have peaked in recent years, and seems to be on a down trend. Off hand, I can tell you that 5 or so, large and popular motorcycle dealerships in the Toronto area have closed within the last 2 years because of this down turn and consolodation in the dealership and manufacturers structure. Running a motorcycle dealership is not an easy task, as a customer and manager, I can assure that 'customer satisfaction' has been hit hard by poor dealers, mechanics recently, leading to this consolodation trend. In Toronto, Honda, Suzuki and BMW have recently pulled their brands from local dealers, and placed them inside of the automotive dealerships, "stream lining" their sales and service structure. (This has been a benefit for the top auto dealers only, who are first in line to recieve the motorcycle additions), and has led to the motorcycle dealerships scrambling for extra sales.

Factor in high insurance rates, bad policies and motorcycle selling is in for a tough road.

 

seek out dr. tax. he spent a bunch of time researching just this sorta thing not too long ago.....

g/l,
doody.

 

I would agree, these multi-line dealerships seem to be the one's succeeding these days. Sort of like the "Bix Box" shopping centre syndrome affecting the retail market now...this is the way to go.

The smaller, "mom and pop" dealerships seem to be closing up. Big parts selection and quick service is a MUST, possibly why the smaller places have been struggling as opposed to the "Bix Box" who have double the employees and double the shop, gear and parts space?

 

The big box is the way to go with this but the big problem with the big box is the big initial investment. Honda, for one, has become more and more picky on who they give a flag to. They require (now) a $2 mil equity and have various caveats on the size, look, accessibility and design of the building etc. The existing franchisee may have overriding geographic territorial exclusion. (Honda is the white whale if you land it) Yamaha, Suzuki and Kawa all have their own. Don't forget Triumph, Duc, KTM etc

Harley just forget it except for making sure you can service and sell the tons of after market bling that the rider spends LARGE on. Also the after-market sport bike rider and off road rider are under-serviced in most markets

The "Chopper' guys (Big Dog, Ironhorse etc) have less demanding franchise side but they also are riding the back side of an unprecedented run and I don't know if they have the ability to handle a down turn. Easy to be a dealer (relatively low inventory) most use S&S power and remarkably similar components.

 

If you're going multi-line, don't forget the Korean and Chinese bikes. They're significantly cheaper, and while the quality's down they're bound to improve.

Put it in a college town and offer "attractive" financing to the kids, and you'll move some units.
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frank, there are several multi line dealer w/in 50 miles of you. it would seem a bit saturated in the atlanta market currently.

if you are seriously interested, you should meet my friend ervin...he is a neighbor of yours.

pcb

 

IMO you missed the boat. The downturn in this industry has already started and especially the Harley market is hurting. Most dealers have tons of 07's left over and they are starting to discount from sticker this year and last, whereas 5 or 10 years ago the only question was how much OVER sticker you pay.

Lots of guys shopping online too and buying out-of-state and getting bikes shipped. Lakehill Motors in Corinth MS is the largest in the USA. I have gotten two bikes from them now, both around $1k under sticker.

I agree some of the Korean brands may be the way to go. Hyosung is a good bet. Yamaha and Suzuki are always hot sellers (in that order) in the sportbike market. Honda is generally tops overall and especially in Cruisers, although Yamaha is doing well with their "Star" brand.

Any MC dealer is going to make more $$ on parts than the bikes themselves. The sportbike guys are often inexperienced in purchasing big ticket items. When the financing is approved the sales of aftermarket parts with the "extra finance amount that was approved" is just cake. The Harley/cruiser market generally has a lot more $$ to spend, and they are probably more into posing and one-upping their friends and they sure do spend the $$ to do it.

If you do it, just make sure you flip to my pages in the Tucker Rocky, Drag Specialties and Custom Chrome catalogs and just order, order, order - I'll appreciate it

 

IMO the downturn has already started. Many of these big guys (Big Dog, AIH, BBC, and more) are seriously hurting. Lots of shops have already closed - three out of four AIH dealers in OH are already closed. In addition, the EPA laws are changing. S&S teamed up with Harley and the MIC and managed to pass EPA regulations that are pretty strict and only the big guys (which coincidentally are HD and S&S) will be able to meet. They're also trying to crack down on some of the aftermarket parts which drives more people back to Harley, Victory, etc.

If I were opening up a dealer right now, today, I would try to get a couple of the big 4 like Honda and Yamaha (although Honda would probably never allow it these days) or Yamaha Suzuki. Then toss in maybe Hyosung, Ducati, Aprilia or something and you may do OK.

 

The market is slow I think. I was at the HD shop today and they are 1k under list on their bikes. The Iron horse dealer is really sucking wind and the big dog dealer in just a little better. I don't much about the Honda crowd but I bet they are down as well. I don't think Duck dealers make anything at all. I used to have one and the dealer is a gonner.

 

This "spike" (started back in October '06) was mostly due to the 1098, of which nearly every '07 was presold before the first one hit the US. It'll be interesting to see if sales like this continues and how well the HyperMotard will do too.
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Recent news out of Toronto.....

Cycle World, a large dealership with 2 locations in the downtown area, which carries Honda, Suzuki, Yamaha, Kawi, etc....and has a reputable parts and service department will be closing soon.


Good article here:


http://www.thestar.com/Business/article/240329

 

If HD Cool Springs is 1K under sticker that has more to do with the ****ty way they try to do business.
across town at C&S Phil Chamblee blows em out at MSRP with no doc fee and is a nice guy as far as HD dealers go.

 

Crap! They are a good customer. Better make sure they are paid up!

I think we are seeing a thinning of the herd. Lots of small shops got into this market to "make a quick buck" off the new customers that wanted in on the fad. Existing shops expanded. Most of that expansion IMO was in the Harley/V-Twin/Chopper crowd. There were shops popping up everywhere. Some established shops are closing and many of the new ones are closing.

I am seeing magazines call me offering lower-than-ever pricing on ads, as well as trade show management companies that have been real hardasses the last few years coming back and basically 'begging' for business. Overall I think its good for the small established manufacturer who has (and still will) produce quality parts and offer good support. The folks that came in quick to make a mint are the ones moving on to other things - just like they got into real estate a few years ago, and they got into IT before that, etc, etc.

 

I have know Phil since he opened. I was a Boswell's customer for a lot of years. I switch to Cool Springs for 2 years and got screwed one time and off I went to Bumpus. They have been great to deal with and the best one in the bunch. I will keep going back there. All the dealers have made a ton in the last decade and are not in tune with customers. My last 2 Bikes came from Bumpus.

 

I've rode for 40 years on at least 20 different bikes. Best friend has had a multi-line dearlership for 30 years.

But for what its worth, I go to every event at Mid-Ohio for years. Vintage MC days at the track has been up and down over 10 years. Auctions, shows, roadracing and MX. About 4 years ago the vintage MX stuff realy took off. Last year the event was the biggest event of the year. This year, 2 wks. ago, attendance was 70K vs 40K for the Indy/ALMS series. I went back to AMA Superbikes this past Sat. and attendance was half of the Vintage Days event.

Everyone's not on a vintage bike, but it tells something of where the interest is directed and the age of the market.