March 10, 2003 – AIH eyes national service network

The braintrust at American IronHorse knows very well who’s buying their motorcycles — upscale folks who can afford to pay more than $20,000 for a limited edition machine, one that looks great and makes them look pretty good, too. And one they can ride, but not wrench.
That poses a problem for the Fort Worth-based company, since it has only about 80 dealers nationwide. And it doesn’t expect to have more than about 120 by the end of this year.
How do you provide convenient, high quality service for your customers anywhere that they ride?
Bob Kay, who joined AIH late last year following a stint as head of Tucker Rocky’s Biker’s Choice unit, thinks he may have the answer.
How about a chain of perhaps 1,500 service centers that can fix bikes and sell AIH’s new line of Gunslinger parts and accessories?
“We started discussions on this idea with our dealers last fall,” said Kay during an interview with Powersports Business. Then Kay found a business model from the Panoz sports car company that seemed to fit AIH’s needs. “They’re building about 200 cars and selling them through about 50 dealers. But they’ve got 3,800 service centers. I thought there might be something to this,” says Kay.
Panoz also has a dealer profile similar to that of AIH: high profile customers who are more likely not to have the time or desire to work on the bike (car) but who want to look good when they ride. “They want service now, when and where they are,” says Kay. “They don’t want to travel 400 miles to go to a dealer.”
Kay is quick to point out that the concept isn’t really new in the motorcycle industry today —AIH has about 40 service centers and other OEMs such as Big Dog and Indian also have them.
But the AIH idea has a different twist: It provides a channel for the company to sell its new Gunslinger brand of accessories for AIH and Harley-Davidson bikes.
“By including the Gunslinger line,” says Kay, “AIH ensures its dealers and service center owners that we won’t set up where there is an AIH dealership. It also means we won’t have a service center every two blocks. They’ll have a very desirable, high quality product line .”
Kay said he’s looking for existing service centers who have an established business and who employ certified technicians. “This eliminates boutiques and mail order operations and accessories only shops,” says Kay. “It eliminates those shops who tend to be focused on price only. They have to be a legitimate retail outlet; we want a quality network.”
The minimum downstroke to become an AIH service center is an initial stocking order of about $2,500 to $5,000. “There aren’t any other fees,” he notes, saying, “But the real focus is a quality shop that has the right people.”
Kay says he’s moving slowly on the Gunslinger line to ensure dealers get top service and high fill rates. Today, AIH is selling wheels and exhausts for AIH and Harley bikes. It’ll soon add a line of handlebars. But, Kay’s primary goal through the third quarter of 2003 is to build an infrastructure to handle and process orders.
“Once we do that,” he says, “we can grow Gunslinger as big and as fast as the market demands. If we focused now on part numbers, we might have trouble serving our customers. We want to step back and do it the right way.”