August 13, 2007 – Survey: V-twin custom sales down significantly

By Neil Pascale
The majority of custom V-twin dealers across the nation are reporting decreasing traffic and sales, according to a Powersports Business survey.
Of those surveyed,
65 percent said their 2007 sales are lower than the previous year while far fewer dealers were reporting increased new unit sales — 20 percent — or similar results as last
year — 15 percent.
The survey of 20 dealers from 18 states concentrated on the custom side of the V-twin business, with many of the dealers having Big Dog Motorcycles and American IronHorse brands.
On average, dealers who reported slower sales were down by an average of 27 percent from the previous year.
Big Dog Motorcycles President Nick Messer said the national survey is in line with what surveys Big Dog has conducted, with the latter indicating the industry down 15-20 percent from a year ago.
Messer noted that for many dealers, 2006 sales also were off from the previous year, meaning the custom V-twin segment is likely looking at a second straight year of declining new unit sales. However, that news doesn’t necessarily mean
V-twin dealers’ overall profits are down, Messer pointed out.
“I think (dealers) have seen the downturn in sales and so they’re paying more attention to what their operation costs are,” he said. “The profitability of their organization is stronger. So that’s encouraging.”
What’s not encouraging is nearly 80 percent of the V-twin dealers contacted by Powersports Business reported less foot traffic in their stores this year compared to 2006, with some dealers openly wondering if the once prevalent buzz over custom bikes has faded away.
“The custom bike business is not dead, but interest has slowed down,” Messer said. “And maybe it has peaked, but you have to admit we had a real good couple of years there where basically about anybody building custom bikes was selling them.”
Kevin Alsop, owner and founder of Big Bear Choppers, Big Bear Lake, Calif., believes the custom market will slowly rebound with time. “I think early next year, going into the ’08 market, will start to increase in a positive manner, and (the market) will continue to increase on a very slow but sure ascent,” Alsop said.
Why the downturn? Messer points to a number of reasons, with increased interest rates and the softening housing industry as two key points. “That has affected a lot of our buyers,” Messer said of the reduced U.S. housing market.
Messer also believes Harley-Davidson’s increased production also has affected the custom market. “A brand new 2007 Harley-Davidson costs less than a ’05 model based on what the dealers were selling them for. So now there’s a greater price disparity between the custom bikes and the Harley-Davidson market,” he said. “So it tends to send people back to Harley.
“I still think there is a strong market out there for the customs. I just think this is not the year for it,” Messer said. “I think there’s going to be a correction. You’re going to see a number of small companies, not just custom bike builders, probably go out of business or change their business practice entirely, with guys going into frames or front-ends or whatever.
“But I also believe the consumers are out there, they are just looking for something different. And there could be a growing trend now for something a little edgier, something a little different, not just choppers and pro-streets.”
The sales downturn in the custom market does not seem to be rooted in any one particular area of the United States. Messer said he has noticed that nearly all dealers in California seem to be down but has not seen any other significant regional patterns. The Powersports Business survey showed dealers who are reporting higher sales numbers are fairly spread out — with two in the West (Texas and Utha) and two in the East (Ohio and New York). Dealers who said their new units sales are the same as last year were in the Midwest (Minnesota and South Dakota) and in the Northwest (Washington).
Custom V-twin dealers had mixed reports about their inventory, with nearly an equal number reporting increased and decreased number of bikes on hand this year compared to last year.
Even without an official tally — there is no organization that counts custom V-twin retail sales — there seems to be little disagreement with the findings of the national dealer survey.
“The market is off,” Messer said, “and the people who are going to survive are going to watch the dollars and cents of their companies and pay attention to what they’re spending and not over build.”

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