INTERMOT – U.S. MANUFACTURERS EXPAND PRESENCE
MUNICH — Analysts say slow growth and cutthroat competition are squeezing profits for many foreign companies operating in Europe, causing some firms to cut back in the region and others to concentrate on seizing market share.
While those watching Europe’s market conditions say the situation there is not likely to change soon, the12-country Union’s powersports industry appears to continue to expand with an influx of foreign companies.
Organizers of INTERMOT, the international motorcycle show held here every two years, said participation by foreign companies was up 10.6% compared to INTERMOT 2002. Countries most represented at the 2004 event included China, Taiwan, Pakistan, Spain, France, Italy and the UK.
U.S.-based suppliers in attendance included AirHawk, Inc.; AXIO by Harodesign; Cobra Engineering; Cometic Gaskets; Corbin; Durablue; Dynojet Research; EMGO International; Fly Racing; Fog City; Genuine Motor Scooter; Go-Ped; Handy Industries; HiPer Technology, Inc.; Hot Toppers, Inc.; ITP; Jardine Performance Products; J&M Corp.; Kasea; K&N and Kryptonite.
Also there were Langcourt, Ltd.; MAG Europe with Kuryakyn, Vance & Hines, Progressive Suspension and White Brothers; National Cycle; One Industries; Outerwears; Performance Machine, Pivot Works/Hot Cams; PowerMadd; RaceTech; SCOTT; SIXSIXONE; Smith Sport Optic; SuperTrapp; Troy Lee Designs; Warn Industries and Wiseco, among others.
Washington-based Warn Industries has operated in Europe since 1958, and began shipping ATV product there in 1993.
Patrick Storm, Warn’s U.S. account manager for ATVs, told Powersports Business that Warn’s business in Europe accounts for only about 4% of the company’s total ATV accessory sales. Still, he said, “in terms of percentage of growth over the YTD, it is a huge number. We’re seeing business in Europe just take off.”
Warn distributes through partnerships covering a specific geographic region. It employs Taubenreuther GmbH for Germany; DLD France for France; BG Nor for Norway; and Implementos for Spain. Plus, a sales manager in France works with all of the European distributors on marketing plans and advertising efforts.
While the setup appears to work, and there are no plans to update distribution any time soon, according to Storm, “As the powersports market there evolves, we are evaluating the customers needs to determine a proper course of action for the future.”
The European market accounts for 15% to 20% of business for Pivot Works/Hot Cams. The company’s Jeff Wells said INTERMOT was a successful show.
“Our goal for attending Intermot this year, and every year, is to be able to not only visit with our existing distributors but also pursue other outlets for distribution of our products,” Wells said. “This was especially important this year with the Hot Rods line of crank shafts and connecting rods. We wanted to discuss with all of our distributors the facts regarding this change in distribution.”
One trend Wells said he noted was that, in Europe, the two-stroke off-road bike still appears to be the bike of choice. “Unlike in the States with the growing four-stroke trend and a dramatic rise in cam sales, in Europe they are fairly flat, growing, but nothing like in the states,” Wells said. “The market is different and they have not been forced to make the switch to the four-stroke, yet.”
Pivot Works/Hot Cams has 18 European distributors. “There is a lot of business to be made in the European marketplace, things are a little different over there, but the bottom line is business is still business regardless of where in the world it takes place,” Wells said. “Customers still want exactly the same things they want here: good product, good margin, good service.
“I think sometimes U.S. companies fall into this notion that, to do business in Europe they have to do it the ‘European’ way, with exclusive deals, etc. But the truth is competition fuels the marketplace, as long as everyone is upholding the integrity of the product and not discounting it or anything like that. Competition is a good thing, it raises the awareness of the product, and it makes the distributors/sales staff work harder to push and promote the product.”
Minnesota-based PowerMadd, a manufacturer of hand protectors, has been doing business in Europe for one year. Randy Shimanski, director of sales and marketing, said the company had multiple objectives at INTERMOT.
“We were searching for new distributors, gauging market reaction to our Star Series Handguards, meeting with existing distributors, and conducting market research on the European motorcycle industry for new product ideas,” Shimanski told Powersports Business. “The next time we attend we will share a booth with a local distributor versus having our own booth. Still, overall for us the show was a success and we accomplished our goals.”
PowerMadd currently works with MATHS Racing in France; Polo Expressversand & Quad Briel in Germany; Innteck S.R.L., Italy; Speedfreak, Portugal; Hela International, Netherlands; Ventura Racing, S.L., Spain; Powersports Distribution AB, Sweden; and ATV World in the UK.
Europe accounts for less than 5% of PowerMadd’s business, but Shimanski said he believes that number will grow considerably as the product becomes more available and awareness increases.
Outerwears, Inc. is based in Schoolcraft, Mich. Founded in 1979, the company specializes in protective accessories for the automotive, powersports and racing industries, with its core products being the Outerwears pre-filter and the Shockwears brand shock cover.
Outerwears has been doing business in Europe for five years. Jay Garside said the company was at INTERMOT showing the pre-filter and shockwears products for quads and motorcycles. Availability of Outerwears product, he said, grows every year as awareness increases.
“As our products are oriented towards the performance crowd, the largest market is still the United States,” Garside said. “The European market offers different applications and different types of consumer needs. Still, Outerwears has been able to adapt to the needs of the European consumer and continually looks to make products distinctly for the market.
“If the manufacturer can identify the needs, the market can have a positive impact for both the manufacturer and the distributor handling the products.”
Dynojet Research, Inc., Las Vegas, had a large display at INTERMOT, showcasing its seven models of dynamometer and corresponding control software, Air/Fuel Ratio Module and Power Commander fuel injection module.
Unable to find a dynamometer to meet the needs of its R&D staff, Dynojet pioneered the first single roller, inertia, chassis dynamometer for motorcycles in 1989.
Founded in 1972, the Las Vegas-based company employs more than 100 people in Nevada, Montana, England, Germany and Holland, and provides software in English, German, Italian, Dutch, Spanish, Chinese and Japanese. It boasts more than 37,000 chassis dynamometer installations in nearly 40 countries.
Kerry Bryant, former director of sales, marketing, R&D and engineering for Jardine Performance Products, Corona, Calif., was in Munich showing the company’s systems for cruisers, off-road bikes and ATVs, including the YFZ450, 350 Raptor and TRX450R.
“Right now, the metric market is doing great for us, and the off-road and ATV markets are seeing a lot better numbers,” Bryant said. “The quad market is really going well; in fact, we just picked up a new distributor for our ATV line in the UK.”
Jardine uses different distributors for each country in Europe. “We don’t have any exclusives, and we don’t make someone from the UK go to Germany to buy an item,” Bryant said. One additional task he had at INTERMOT was to seek out a distribution channel for France.
“Over here, it’s always difficult to find a full line distributor,” Bryant said. “So, since we serve the cruiser, sportbike, off-road and ATV markets, we often have to seek out a number of different companies just to cover one country.
“Like we all heard again at the Parts Unlimited symposium a couple of weeks ago, Fred (Fox) for — I don’t know how many years — five or six years in a row, has been beating around the bush as to his investigation of the European distribution market. Honestly, we’re looking forward to having him come over here, because then you’re going to have the mass centralization and see some savings as a manufacturer.
“Looking around, I have a feeling he’s going to be over here sooner than later.”
A part of the diversified Roho Group of Belleville, Ill., AirHawk, Inc. also was in attendance at INTERMOT, represented by Steve Peyton, motorcycle category manager.
Peyton said he attended INTERMOT in an effort to drum up retail business and inspect the European market.
ROHO, Inc. was incorporated in 1973 by Robert H. Graebe, an electrical engineer who invented Roho Dry Floatation technology to diminish pressure sores on the bed-ridden.
Named Dry Floatation because the cushion mimics the properties of water, in a dry, air-fluid environment, the invention entered the consumer marketplace as the AirHawk Motorcycle Cushion in 1997.
Kevin Berger, president of SuperTrapp Industries, Inc., said his company has done well in Europe, capitalizing on a strong American-made and metric cruiser market, and told Powersports Business that SuperTrapp looks forward to a burgeoning distribution deal in Europe through Custom Chrome Europe.
Based in Cleveland, Ohio, SuperTrapp owns and manufactures the Kerker brand of exhausts, Mean Mothers drag pipes and the Road Legend series, and serves as a private-label supplier to OEMs and distributors.
