Oct. 13, 2008 – Suzuki bolsters lower-displacement offerings

By Neil Pascale
Editor
LAS VEGAS — A Suzuki survey team’s work last spring with U.S. dealers culminated in one of the more surprise offerings by the American Suzuki Motor Corp.
In unveiling its 2009 product line at its national dealer meeting, Suzuki showed off a 250cc motorcycle, the result of discussions between the survey team and U.S. dealers about what current, worldwide Suzuki product could best fit in the now suddenly lower-displacement-hungry North American motorcycle market.
Suzuki also displayed new offerings and upgrades in a number of other categories, including a lighter, more powerful GSX-R 1000 to its market-share leading class of sport bikes and a major overhaul to one of its more prominent cruisers.
The company’s push to match a suddenly changing American appetite for lower-displacement bikes, however, dominated the dealer meeting. Not only did Suzuki show off the TU250X — a model originally introduced in Japan — but it also unveiled a new, lower-displacement motorcycle model, the Gladius, and promised to enhance its scooter lineup with the addition of a 125cc vehicle by next summer.
These unveilings took place on Monday, Sept. 29, the same day the U.S. stock market suffered its largest single point drop in history. The economic challenges that have brought about these sudden market swings were addressed by the vice president of American Suzuki Motor Corp.’s motorcycle and marine division, Mel Harris. He also spoke of the opportunities these challenges bring to the powersports industry.
“Fluctuating gas prices are generating tremendous interest in our motorcycles and scooters from a whole new segment of customers,” Harris said “Not just the traditional motorcycle enthusiast that dealers see everyday. The industry is seeing a growing number of budget-conscious customers looking for a more fuel-efficient vehicle for the daily commuter and overall transportation needs. And of course, motorcycles and scooters for a growing number of Americans is a perfect solution.”
Besides moving to quickly respond to the change in the U.S. market, American Suzuki Motor Corp. officials also sought to assure dealers that the inventory challenges the company faced in the United States last year were only a temporary setback. Suzuki wound up this year with less than a desired number of motorcycles, costing the company sales and market share. Harris told Powersports Business that without the inventory shortage American Suzuki Motor Corp. would have remained on par with last year’s sales numbers, a notable feat considering the industry as a whole was down 8.2 percent in the first half, according to the Motorcycle Industry Council.
Harris told dealers that the factory in Japan looked at U.S. market conditions and the uncertain economy and thus decided to delay shipments and cut production.
“We did not want to put our dealers in a situation like they were in the 1980s when we had too many units in inventory and nobody was making money,” Harris said. “We didn’t want to put ourselves in a position that many of our competitors have been in for years with literally thousands of noncurrents to unload at fire-sale prices. The factory opted to be conservative and take a wait-and-see attitude. And it turns out they were too conservative.”
American Suzuki Motor Corp.’s new president, Kevin Saito, acknowledged inventory issues were his first assignment. “I will correct it and improve it,” he told dealers.
Despite those challenges, Harris told dealers that Suzuki remains the leader in U.S. sport bike sales volume. “The only segment that is soft right now is ATVs. But other than that, the demand for our product is there,” he said, noting the company has seen an emerging amount of interest from minorities and new riders.
Those riders will certainly take a look at the new TU250X, which will feature a classic design, a low seat height, a chrome exhaust system and a fuel-injected, air-cooled engine for $3,499. That price will be below another industry 250cc offering — Kawasaki’s Ninja — that was one of the top selling sport bikes in the United States this year. Will Suzuki manufacture enough TU250Xs to try to match the sales volume of the Ninja 250?
“We have not allocated this product in quantities to dealers. It’s an open order,” said Glenn Hansen, communications manager for American Suzuki Motor Corp.’s motorcycle/ATV division. “We’re going to see how it goes and see what their reaction is.”
How much further Suzuki, a company that has concentrated on the higher-displacement market, focuses on the low-displacement motorcycle market in the future is still up for discussion. Harris told Powersports Business he has advised Suzuki to look at a 400cc sport bike to provide a lower price point for entry-level riders.
Harris said he fears the sport bike market is falling into a trap that the snowmobile market got into years ago where ever-increasing prices made it difficult for entry-level riders to get into the sport.
“Is there something we can do in a more reasonable price?” Harris said, referring to his interest in pursuing a 400cc sport bike.
Harris said he does not foresee Suzuki producing an extensive amount of 125cc or 250cc models for the U.S. market. “That’s not the plan,” he said. “Bring in some scooters? Yes. I think the market demands it. We will fill those gaps, but not with a lot of other 250cc or 300cc bike models.”
The one 250cc model that Suzuki will bring to the United States, the TU250X, is the result of discussions between Suzuki and some of its dealers. Last spring, dealers were shown different low-displacement product that Suzuki could quickly bring to the U.S. market in a responsible manner. Those products included a 250cc scooter, which Harris said “dealers did not think was a product that would do well” considering its price tag.
“This is the model they felt most comfortable with,” he said of the TU250X, which won’t be sold in California in 2009 but will be offered there later as an early release 2010 model.
Although there will not be a 250cc scooter, Suzuki did upgrade its 400cc Burgman with anti-lock brakes, a feature previously available on the company’s Burgman 650 Executive.
Besides addressing the lower-displacement market needs, Suzuki also announced some changes to its ATV lineup, with the addition of a 500cc KingQuad complete with power steering and adding fuel injection to its 750cc KingQuad as well as adding a pink color option to its youth quads.