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Earthquake near Honda plant delays Africa Twin production

By Dave McMahon

The Honda Motor Co. motorcycle factory received “significant” damage as the result of the April earthquakes in Kumamoto Prefecture and is not expected to be fully operational until August. The earthquakes were centered about one mile from the factory, but no one at the factory was injured.

Chuck Boderman, vice president of Powersports at American Honda Motor Co., and Lee Edmunds, manager of Motorcycle Marketing Communications at American Honda, spent time on the phone with me last week to provide an update to the industry.

“The biggest impact on our business was with the Africa Twin,” Edmunds said. “Fortunately and unfortunately, we were in the middle of production when the earthquake hit, so they were able to provide enough bikes for one per dealer, roughly. So we got an initial supply to dealers. And there’s been a lot of rumors that we’re canceling the rest of the orders. We’re not. We’re going to fill all the orders. They’re just going to be delivered later than we had originally planned. Once the factory is fully up and running, we anticipate that around the end of August or beginning of September, we’ll be able to fill the rest of the dealer orders. The dealers will get everything they ordered.”

Of course, anticipation from both dealers and consumers for the Africa Twin has been fantastic, with Edmunds noting that dealer orders exceeded production capacity for the inaugural 2016 model.

The machining and die casting areas of the factory were hit particularly hard.

“It’s incredible how hard they are pulling together in Japan to get stuff done and make the best of a bad situation,” Edmunds said.

Most of Honda’s 600cc-plus on-road bikes are made there, as well as its motocross bikes.

Additionally, Honda announced its fiscal year 2016 results for the year ended March 31. Global motorcycle sales were down 1.4 percent, to 10,572 motorcycles, compared to 10,725 in the year-ago period. Much of the drop was attributed to the South American economy.

Motorcycle sales for North America had an increase of 7.7 percent, the third consecutive year for Honda growth, thanks to a strong fourth quarter. Boderman noted that the increase for North America was strong for both 2-wheel and 4-wheel product.

For the coming year, Honda anticipates low-single-digit growth overall in North America, with headwinds coming in the form of Canadian and Mexican currency exchange rates.

American Honda, meanwhile, is expecting to approach double-digit growth, mainly due to side-by-side growth. ATVs and two-wheel product are expected to see low-single-digit growth at American Honda in the coming year.

“Side-by-side models continue to really grow for us with the lineup expansion and production increases,” Boderman said. “We’re making good gains in side-by-sides. We’re focused in multi-purpose, and we’ve made enough progress that we’re in the No. 2 position in the marketplace there. We’ll have a full year of Pioneer 1000 under our belt this year, which will really fortify our volume for dealers. It’s really expanding their footprint profit-wise, both the unit sales and the accessory sales.”

Niche markets crumbs lead to 'loaf of bread'

Talking to John Leale, vice president of sales and marketing for the U.S. operations of Thai tire manufacturer Vee Rubber, is always intriguing simply because the man knows tires. And if there’s bass to be caught, he’s a good man to know in Virginia!

In our Tire & Wheel Focus, managing editor Liz Keener provides an insightful look at MTA Distributing and its recent growth. Vee Rubber and MTA recently became partners, adding to a distribution roster that includes Metalsport Wheels, Mid-USA Motorcycle Parts, Motorace, Performance Tire and Van Leeuwen Distributing.

“The bottom line is I’m still having fun,” Leale told me last month. “Suffice to say, Vee Rubber is continuing our business of getting into niche markets and trying to dominate them and pick up the crumbs. I’m happy with the crumbs — when you put them together, pretty soon you get a loaf of bread.”

The loaf had been sliced momentarily in 2014, when Marshall Distributing was purchased by Western Power Sports. Marshall was Vee Rubber’s largest distributor. Fortunately for Vee Rubber, more than a handful of former Marshall sales reps landed at MTA.

“My whole business plan from the beginning was to work with small, regional distributors that want to sell Vee Rubber and want to make money, and it was working. In 2012-13, we increased business by 72 percent. We did have some issues or a manufacturing glitch here or there, but we still grew business by 8-10-12 percent after that, which is pretty healthy. So everything was rolling, and then Marshall was sold.”

Around the same time, a partnership with High Lifter provided inroads that eventually helped Vee Rubber do business with a large ATV manufacturer, so business stayed healthy. Last year, MTA and Vee Rubber finalized their deal, allowing MTA to become the “new Marshall” for Vee Rubber. Motovan in Canada and Vee Rubber had a longstanding partnership, so it was no surprise that when Motovan purchased MTA last summer, it decided to keep Vee Rubber on the roster.

“MTA placed a nice sized order right out of the box, so that’s pretty bright from a business standpoint. I’m really looking forward to working with them,” Leale said.

Making tires for the dual sport and adventure bike markets is proving successful, and vintage bike tires continue to be strong sellers for Vee Rubber.

Leale, a 20-year flat track racer himself, has turned Vee Rubber into that market with the release this year of a DOT-approved flat track tire, for the rider who wants to put a dirt track tire on his street racer. The trials market also is strong for Vee Rubber, which supports Team Gas Gas in the U.S.

The growth has also led the company to expand internally. Gary Lattimore, Vee Rubber’s man on the street at races over the past year, was hired in November as a distributor liason, and will be tasked with new product development.

An expanding social media presence for the brand, guided by John’s son Dan Leale continues to help spread the word about Vee Rubber and its sponsored riders. Even on Vee Rubber social media pages, the breadcrumbs are forming a formidable loaf of bread.

Dave McMahon is editor in chief of Powersports Business. Contact him at 763/383-4411 or dmcmahon@powersportsbusiness.com.

 

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