Dec. 28, 2009 – An entry-level offering

SALT LAKE CITY — An industry veteran long associated with the U.S. off-road motorcycle market has started a partnership that could have repercussions for the V-twin market. And most notably, at least for the short term, to Harley-Davidson dealers.
Frank White of ATK Motorcycles, an off-road motorcycle and ATV distributor, has partnered with Korean manufacturer Hyosung as part of a plan to produce a variety of entry-level vehicles. The first of those vehicles will be street bikes that White and his partners believe can become “feeder” product for Harley-Davidson dealers, a concept that was once attached to Buell motorcycles.
“Our whole focus on the dealer network is going to be attracting Harley customers,” White told Powersports Business. “We want to be the Scion to Harley like Scion is to Toyota. It’s all about getting younger consumers into the dealership because if you don’t do that, you’re out of business.”
White and his partners, which include Malcolm Zanca, owner of Harley-Davidson Baton Rouge, believe the partnership with Hyosung, also known as S&T Motors, provides them the quality of product necessary for a Harley dealership.
“The quality is there,” White said, comparing the quality of the street bikes to metric manufacturers.
The company’s initial street bikes, which White says have passed emissions tests, will include models ranging from 250cc to 700cc. All of the models will carry the ATK brand, although they will in principle be Hyosung-made motorcycles. White did note the ATK-branded bikes will carry several changes, including a variety of different parts, from the wheels to the brakes to the suspension to different fenders.
“We’ll develop them. We’ll market them,” he said of the street bike partnership with Hyosung, which will maintain its own U.S. distribution of powersports vehicles.
White believes the ATK-branded bikes will be priced around $4,000 for its 250cc V-twin bikes and around $7,500 for its 650-700cc offerings.
“I look at what Harley dealers need,” White said. “The first thing they tell me they need is an entry-level street bike. The Buell Blast could have been that, but they were more focused on sport bikes, not entry-level street bikes. So you look at the industry and what’s selling? Entry-level street bikes.”
White said the ATK motorcycles, which will have fuel injection, will be assembled at the company’s facility in Utah.

A second brand?

ATK expects to start with a small network of around 30 Harley dealers for 2010 and then increase in size, and potentially to metric dealers, in the future. The ATK-branded motorcycles are expected to be available for showrooms in February.
“We don’t have these huge expectations,” White said, citing the reason for an initial small dealer network. “We don’t want to stumble. We want to do it right.”
How does White plan to overcome a challenge that Buell was unable to overcome in some dealers’ eyes — a reduced profit margin vs. Harley-Davidson’s line of cruisers and touring bikes? White said the current market conditions and their impact on profit margins render that argument moot.
“Harley was on a 20-year honeymoon,” he said. “Now the honeymoon is over and they’re back in the motorcycle business and they have to hunt and scratch just like everybody else.”
White believes one of the keys to ensuring ATK becomes a successful second brand in Harley-Davidson dealerships will be marketing to the right audience: the young rider.
“You have to go right to the youth to get them,” he said, noting the company plans to be aggressive with its social marketing and grassroots activities. “Kids now are so distracted with computers and this and that, we have to teach them the fun of motorcycles. So we have to go out and drive them in.”
The ability to provide that product geared toward a younger crowd, as the Scion has done for Toyota, will be crucial for Harley dealers down the road, White says.
“You have this great dealer network and they’re starving for product,” he said. “These young kids aren’t interested in Road Kings or Sportsters.” psb