The Kneeslider

Doers Builders and Positive People

It’s a Great Time to Build New Motorcycles

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Did you ever wonder which models a motorcycle company could drop? The current business environment makes it easy to keep doing things the same way, trim the fat, get more efficient, ride it out. How do you go charging off in new directions if you have no extra money to invest in designing and building something new? Why not drop a model from the lineup? Why not 2 models? Free up the money and build something new, instead.

The cautious view says the old model is still selling and costs are already amortized in the long production run so the profits come with minimal effort. No one will fault you for doing that, it’s a good safe strategy, but what happens when things heat up and the economy gets rolling again? Well, then you start looking ahead and coming up with new designs, build a few prototypes, take them to the shows, get customer feedback, refine the design, finalize the design, start production and get them out to the dealers and hope the economy hasn’t cooled off or tastes haven’t changed.

When times are good and motorcycles are selling, you can take forever to roll out a new model, Yamaha can bring out the new V-Max or Honda can bring out the Fury in their own sweet time, Harley can tweak a few designs here and there and everyone keeps right on making big bucks, unless things crash and the long lead time catches you flat footed and you introduce a new model when the buzz has moved on and money is tight.

Smart companies might want to redirect some of their capital into a new model or two, right now, when everyone else is hunkered down. You can bet some small companies are working hard to catch them off guard and if the recession eases up, they’ll be ready, but the big guys will still be moving a lot of tired iron. I wonder how different it might be if those big companies were looking outside their usual box, building something no one would expect, getting ready to drop a model that still sells so they can introduce something new.

Don’t use the recession as an excuse. Stay confident and move forward, if a model is tired, drop it. Get out of your comfort zone and push hard, build bikes like you mean it. Commit to bringing your customers the best motorcycles you know how to build. Don’t assume there’s no money in small bikes or big bikes or standards or wherever you don’t usually go.

Ask too many customers what they want and they’ll tell you all sorts of things and if you follow what they say, you may lose your shirt. Customers may have no idea until they see it and their jaws drop and their checkbooks come out. Supply can create its own demand if the product is right. Who demanded an iPod before they saw one? How about an iPhone? Who asked Honda 50 years ago to bring that little motorcycle to the US? Break the mold, turn your best designers loose and don’t play it safe. C’mon, show us your best work, we’re waiting and we’ll be great customers and tell everyone to buy.

Or you could just play it safe and hope things will improve, get through the day, wait for the recovery, and turn out the same old stuff, … yeah, that’s the spirit.

Comments

  1. This is tangentially related to the topic but may advance the discussion.

    While visiting a local Harley/Buell dealer (they also sell multiple other brands) recently I commented to the PR guy about the outrageous deals they were offering on leftover Buell 1125Rs: $8500! I said I’d prefer the cafe racer and he said “they’ll probably make you as good a deal on those — they’re just not moving.” Then he told me the first question the new H-D CEO asked when he arrived was “Why do we make Buells? They’ve never made money.”

    As a gearhead I have always loved Buell’s ability to think up new solutions that work. But Harley riders are notoriously conservative, and it appears sportbike riders are too: if it doesn’t look like all the others, they’re not comfortable. I would hate to see Buell disappear.

  3. The “everyman’s” motorcycle is a good concept that might be further explored by the makers, if warily. It has also been the shovel with which many makers have dug their financial hole. Something about bikes – even if we use them for transportation, that isn’t what we buy them for.

  4. Walt, this is the same reason we probably don’t have a sweet thumper sportbike. Something light and nimble, and yes, kind of fast (but not 600 sportbike fast). The Blast is a step in the right direction, just needs a bit more ooomph (read liquid-cooled?… half of the V-Rod motor).

    I think Piaggio is one company that has done just what Paul is talking about here, and I think it will pay off. I don’t even like scooters, but they’ve made me think twice about that MP3 contraption of theirs (and now even a hybrid version!).

  6. As I’ve often said, the Japanese companies have ready-made smaller bikes — utility bikes, sporty generalists, and sportbikes — that would almost certainly sell like hotcakes in North America in this economy, and many are either sold in or built in Thailand which means they have good pollution control engines already. They don’t seem to be considering this though.

    I also think — esp. since the Japanese are dropping the ball — that it’s a good time for some Chinese brand to up their game and bring their quality control up to snuff and really bring in something with a new brand name attached, much as Honda did back when. This too doesn’t seem to be happening, probably because a) it’s not easy upping the quality control and building a brand, and b) they’re selling their bikes in the poorer places in Asia like crazy. However, they could sell them for much more in the USA (a typical Chinese-made 125cc Honda “clone” sells for something like $500 in Laos; that would be easily at least $2,000 in the USA and considered a bargain).

  7. The Japanese are definitely dropping the ball. Honda finally dropped the extremely long-in-the-tooth Nighthawk 250 and have not replaced it with anything else, even though there’s plenty of (much better) bikes that they sell overseas that they could sell here in its place. Honda doesn’t even have one “standard” motorcycle in their lineup!

  8. It’s probably easier to make money selling $500 bikes in Laos than selling $2000 bikes in the USA. It costs so much more to bring in and sell a bike in the US.

    Advancing development in times like these is all well and good for the powerhouses like Piaggio, Harley, and Honda. They already have enough revenue to finance the humongous expense of developing and certifying a new model. If you’re a little guy, chances are you don’t have the necessary millions laying around and no one is willing to loan it to you. If you did have any reserves you’re using them right now to retain what little skilled work force you have left while the creditors are getting anxious.

    -todd

  9. It’s probably easier to make money selling $500 bikes in Laos than selling $2000 bikes in the USA. It costs so much more to bring in and sell a bike in the US.

    I find it hard to believe that it would cost over $1500 more to bring a bike into the USA. Not to mention that at $2000 it would be cheap; they could probably sell them for $3000-3500, since that’s the range of the 125cc bikes they do sell in North America and Europe.

    Think about it. If they’re selling a bike in Laos for $500, obviously it costs them much less than that to make the bike. Shipping is really very little, esp. if in bulk. So you’re talking about the bike costing them well under $1000 landed. They can sell them for easily between $1000-2500 more than that. Do you seriously think all that would be eaten up in costs?

    For the Japanese companies with their bikes, just add another $250-500 in cost of the bike; still huge money to be made. And what exactly is wrong with the old idea of hooking customers and getting them to trade up later?

  10. You can hardly blame the manufacturers for being conservative if the world is broke! mind you, that’s why I love Ducati-Streetfighter this year, and probably the new multi purpose bike next year-they are one company that throws caution to the wind!

  11. Personally, I’ve never understood why I couldn’t buy a Honda Deauville or a CBX250 here in the States. I can’t imagine buying a Rebel 250, but I’d pick up a CBX in a heartbeat–a much more appealing bike as a daily driver.

  12. Paul, I find it ironic that you now think its a Great Time To Build new motorcycles when more than a year ago I submitted to you an Undercover (SUV 1000) Motorcycle that I built in a backyard garage with my own funds two years ago. The reason for submitting was to get feedback from other motorcyclists as to their response and that you should reply to my email if you had any questions about the design. Since you never responded I can only presume that you and many other magazine editors I contacted do not feel a homebuilt design is worthy of any recognition.
    You’re article makes it sound so easy to just go ahead and design something new, I challenge you to go ahead and try it and see some of the bullsh*t designers have to put up with, not from the public in general but from supposedly those in control of publications regarding the motorcycle industry. It is if they don’t want to offend the status quo which is generally major manufacturers that advertise and submit motorcycles for test reviews.
    The key to being successful, I FEEL, is to find a niche market, you cannot design a motorcycle that everyone is going to love instantly, but you can design a bike that satisfies to needs of a few people initially and eventually catches on to a few more riders.
    The major manufacturers only care about mass appeal in order to re-coup their investment and keep investors happy. That is why they tend to follow designs that have proven potential from backyard mechanics, yes the whole custom bike craze was started by backyard mechanics who weren’t happy with the status quo, they wanted to be different.
    My prototype design on a shoestring budget has been in excess of $25,000 just on parts and a donor bike. It took a year to build averaging about 6-8 hours a day.
    Although it looks unusual and is not very visually appealing to most motorcyclists I do believe there is a niche market for it but not at the price that an investor would be interested in especially since it cannot be mass produced until there is mass demand for it.
    That is the problem all backyard designers are faced with after a design has been completed.
    So Paul, before giving us the RA RA speech about yes we can, how about responding to some backyard designers, maybe someday we’ll be working for the status quo designing bikes that are selling like hotcakes and you’ll be given first chance for a test review of something no one can afford to buy.

  14. I’ve seen that SUV1000 before. Wasn’t it here on the Kneeslider? Reminds me of the Quasar.

    I have built a number of bikes in my garage too and they’ve sold really well – granted, nothing this radical, pretty much all cafe’ racers. If I ever get the other half of my salary back I might start investing a little more in my own ideas. Until then, I really need to buy a rear tire.

    -todd

  15. 600 single sportbike now! My mate rides a Suzuki Savage, I think its a 500 single. He didn’t get because he wanted a cruiser, he got because a 500 single road bike is fun. Its close enough to the sport formula ie; light, modern brakes, reasonable power to weight ratio etc. Seems like such a short leap to make for manufacturers. Motards are the other end of the same spectrum, sooner or later somebody is going to have to join the dots.

  16. IMO let the big companies remain conservative and let the custom shops handle the niche designs and modifications. It would be great to have the big marquees directly support customisers with things like certifications, parts/technical access and sales/aftermarket support. That way I can buy a new Z750 and have it customised into a cafe racer but still have full factory warranty and not jump through hoops to register it.

  17. Streamliners are an interesting design path that might have merit in sub-urban North America (Small, low-powered vehicles achieving comfortable/fun commutes in incliment weather with miserly fuel-burns). Where does road legislation currently sit? Last time I read published vehicle definitions it was like ordering Chinese. Combo #1 gets fully enclosed cabin and 650mm seat height. Combo #2 gets 3 wheels but no fixed overhead structure. Combo #3 gets spring rolls and a side of …etc… I bet that we would see some up-start activity in this area if legisation wasn’t so limiting and self-contradictory.

    And

    Crash Test Pylott,

    That SUV 1000 looks – well? – umh? – better than mine.

  18. RE: cost of shipping.

    It’s actually pretty expensive to ship around the USA (costs me half as much and twice as fast from the UK- twice as far around the world!) and then there’s the terrible process of getting a motorcycle certified in the USA – laws, regulations, fees, PROCESS!

    Now, I hear the USA is ‘land of the free’, but with it’s ‘corporate protection’ laws it sometimes seems more like a communist state :p

    Although, of course, the likes of Honda might take such costs on the chin and easily enough – but when you think of the margins they make on these small bikes, and the old American disdain for small displacement, maybe it’s just not worth the bother?

    After-all, they’ve been burned a few times already…

  19. After-all, they’ve been burned a few times already…

    Yeah, those step-throughs almost sunk them. 🙂

  20. In the 60s, British bike manufacturers became very complacent and continued pretty much making the same bikes but with a few detail changes. They ignored the competition from Japan initially to their cost and when they finally woke up to the threat of increased competition, it was already too late. The old Triumph ohv parallel twin was built from the 1930s to the 1980s, just growing in capacity and becoming a unit design. The Triumph name came back thanks to a far-sighted entrepreneur who invested in new technology while the firm has continued to develop new models and now outsells some Japanese manufacturers in some key markets. I think all that pretty much sums up how firms need to continue to eveolve, no matter what market conditions there are. Otherwise, they’ll end up like BSA.

  21. Its easy to blame the manufacturers but it is really the buyers to blame. Buell’s are pretty interesting and compelling bikes, but they’re not selling. Why? BMW brought a sporty 650 single into the market, the CS and it didn’t sell. Too expensive? But so are all BMW’s. A little funky looking? Yes, but that happens when the designer attempts to move beyond the consensus of what a bike should look like.

    I perused the HYKS websites the other day and there seemed to be 3 cruiser models for each street model, including dual sports. The problem is easy to identify, it is us.

  22. Jim, you have a point. In fact, I addressed it a while ago when I asked How Much Can Motorcycle Design Change? Riders are a conservative bunch, buying pretty much what they bought before and manufacturers respond. But somewhere along the line, new ideas have to be produced that do catch on, it’s just making the dicey decision to produce it, sometimes we seem to hang on to the old while the great new model sits in pre-production limbo while everyone keeps wondering, “yes or no, should we or shouldn’t we?” It certainly isn’t easy.

  23. Buell is a great example. They make fun bikes that provide plenty of perfromance and handling for everyone except the measurebators. They cost a bit more, but that’s not the only problem. I bet Buell would do better if they sold them at the metric shops alongside the Japanese and European brands,

  24. QrazyQat: uhhhh you gotta realize that in Indonesia the motorcycle market is HUGE. Like it or not, the fact is that the large manufacturers are focusing on markets like Indonesia. A number of factors play into the price: they have factories close to the intended markets so shipping is very cheap, cheaper steel (sometimes inferior), fewer regulations, etc.

    In order to have these bikes street legal and suitable to be sold in the US, many things have to be changed. Headlight size, more robust suspension for heavier Americans, maybe a larger tank, etc. That is very expensive to do. They would be lucky to sell 1/10 the number of units of a particular model here in the US, and would it be worth it? In the US market, total product runs per year might be in the thousands or low five figures. In Indonesia, it’s probably high five figures or even six figures!

    I’d like to add that I seriously doubt many Americans would buy these $500 scooters anyways. Maybe some people would react to rising gas prices, impulsively buy one, then figure out it’s garbage. For a market used to “better” stuff, this is brand suicide.

  25. I think it’s the high regulation threshold that holds back everything but mainstream models in the U.S.. The hoops that have to be jumped through means the manufactures aren’t going to take a chance.

    It’s interesting Buell is brought up so much. If Buells are so nice why aren’t they selling? Why isn’t there a waiting list a year long? I own a Sportster (and several other bikes) so I’m used to the engine, But I wouldn’t pay much for a Buell because of…the engine, and the looks too, to be honest. I think I’m like most people in thinking the vaulted “engineering” approach of Buell doesn’t make a superior motorcycle, just one that looks wierd. People buy bikes other than Buell why??? NOT because they are stupid or hyper concerned about specs. I’m certain most picked what they got because they judged it to be the best bike for the purpose, styling, and cost. It’s as simple as that.

  26. Paul,
    The Japanese aren’t going to just drop a model line to free up cash(if it actually does free up cash) they only do that when they perceive a change in market orientation. It just doesn’t make economic sense to just get rid of a model. The price of tooling and R&D is one obstacle but once that is overcome the company is making free money, would anyone here shoot a productive cow just to free up some space on the farm so you could get a new hossak front-end cow?
    But one thing you have to remember is that the japanese took cost cutting and time reducing and turned it into an art form. The vast majority of the world follows them in this respect. Hell, I work beside a kanban all day long and I live nowhere near japan.
    As much as I’d like to see new directions for motorcycles, I doubt it will come from any of the major manufacturers.
    And as regards to small bikes I have to say I agree with QrazyQat. The certification might be a challenge (I don’t know what the quality of things is like over in Asia) but changing the design (If it even needs to be beefed up, as per those indestructible step thrus mentioned) would at the very most cost a couple of $10k for retooling the line and bringing in new components(Shoot me down if i’m wrong).