By Joe Delmont
Can the business and production skills used successfully in the home building industry translate into motorcycle manufacturing? The founders of Saxon Motorcycle think so, and they plan to begin production of their new line of cruisers and choppers this fall.
Saxon Motorcycle Co., based in Casa Grande, Ariz., says it plans to start building four models in early October out of a 40,000 sq. ft. facility it owns in the area. The 2005 lineup will include three cruisers and a chopper; plans call for another cruiser and a chopper to be added to the 2006 lineup, according to Mike O’Brien, one of the four company founders.
Three of the four, O’Brien, Steven Seymoure and Mike Gabor, have served as executives of Pulte Home and Jerry Petty, who founded and ran a window manufacturing operation.
Pulte Homes, Inc., based in Bloomfield, Mich., has built close to 370,000 homes nationwide since it began in 1950. Traded on the New York Stock Exchange, the company posted 2003 earnings of $617 million on sales of $9 billion. Earnings last year were up 39% and sales climbed $1.5 billion over 2002.
Pulte ranks 78th on the Fortune 100 list of fastest growing companies, gets a top rating for consumer satisfaction from JD Power, and was named 2002 Builder of the Year by Professional Builder magazine.
“We have pretty extensive and diverse backgrounds in marketing, finance, and supply chain management,” said O’Brien during a recent interview with Powersports Business. “We’re not a bunch of wild young enthusiasts. We know what’s involved. We have over 50 years of manufacturing experience, and I understand that it’s not in motorcycle manufacturing, but a lot of the principles apply — managing the supply chain and manufacturing to high quality. Our background is getting it right.”
The four decided to launch Saxon because they are long-time riding enthusiasts and because they think they can make some money at it.
“There’s a lot happening in the segment,” says O’Brien, “based on all the TV publicity. And based on our research, the current Harley rider is gravitating toward something different; their next purchase will be in the custom bike segment.”
The Saxon group sees this segment as highly fragmented. “It’s served by a number (of companies) that aren’t highly-organized,” he says. “We’re coming in with a lot of business practices and processes in different industries that are applicable to this industry.”
Explaining the plan
The Saxon group has been working on this idea for some time and initially wanted to resurrect an existing brand. But nothing was available cleanly from a copyright standpoint. So, they settled on Saxon. “The Saxons were a bunch of conquerors,” points out O’Brien. “There’s a rich heritage there and we feel we can build a brand and image around that (name) that will be very appealing.”
The building and nine acres was purchased this year for something less than $1 million, and improvements and the addition of manufacturing facilities are well underway.
Plans call for the company to produce 650 bikes next year and 1,000 in 2006. The company will employ only about 15 people initially and won’t do any manufacturing; it will be basically an assembler of purchased components.
O’Brien says the company is well capitalized, adding that projected capital needs through 2006 will be about $6-$8 million. “We don’t think it will go higher than that,” he says. “If it does, we’ll be OK, but we don’t see a need for that.”
While details on the lineup were not available, O’Brien did say that the six models being developed include a cruiser line, perhaps two chopper lines (one more traditional and “one pretty unique”) and a pro street line that is lower and faster, more of a performance bike. The bikes will be powered by S&S engines.
Two bikes will be “clean and different,” says O’Brien. “We hope they will set us apart.” Retail prices will start in the low $20,000s.
O’Brien says there will be a real difference between a Saxon and a typical kit bike. “They (kit bikes) are not very attractive,” he says. “They’re not a bike I would buy.”
Saxon bikes will emphasize top paint quality, says O’Brien. “Paint is a key factor in selling a bike, so we’re establishing relationships with high quality painters.” Several graphics packages will be offered.
Saxon’s distribution goal is to have 40 dealers in place next year who are capable of selling about two dozen bikes each. No dealers have yet been signed up but prospective dealers should be capable of selling 100-200 units annually. psb
By Joe Delmont