Apr. 21, 2008 – Industry Leaders Q&A with President Jon-Erik Burleson, KTM North America

Under President Jon-Erik Burleson’s leadership, KTM North America has been able to convert its ready-to-race brand image and emission-compliant two-stroke engines into a unique position in the industry. Where the industry as a whole has seen big decreases in new unit sales for off-road motorcycles, KTM has actually increased its dirt bike sales. For the period of September 2006-August 2007, KTM increased its off-road dirt bike sales by 8.5 percent.

What’s the biggest challenge for the industry and what should be done about it?

The industry is full of an absolutely unbelievable amount of talented and professional people that are very capable of handling as a group an amazing amount of broad issues. If you look over the past couple of decades, our industry has seen a lot of ups and downs and tough times, but it seems like we’ve always come out of ahead. I think that’s due in great part to the collective strength of the people that we have involved in the industry. That’s kind of an important segway into what is probably the most important challenge we have: I don’t know if there’s a single challenge that we’re not going to be able to face, but it’s figuring out how to always bring the collective ability of people in the industry together and create a more consolidated message or direction where we want to go. If you talk about rights and land-closure issues, we have an amazing amount of people involved in working on the issues and really intelligent people and a lot of good things going on. But it’s also segmented a little bit. I think how segmented we are in our approach in the industry doesn’t really take into value the whole strength of the powersports voice. When you look at the industry’s manufacturers, the aftermarket accessory manufacturers and then the customers behind that, there’s just an amazing amount of strength to that voice. It’s often hard, and I’ve felt this especially in the past few years, to bring ourselves together on one issue but remain independent and loyal to the company needs that we have. If you get down into riding rights especially and then you get into the state-level issues, it’s just so hard not to become a number of very small voices. The reason for my involvement, and why I believe so strongly in the AMA and in the Motorcycle Industry Council, is I believe there are a lot of opportunities for us to take the split voices we have right now and come closer together, whether it be noise issues, riding access issues or general riding rights issues, on- and off-road. I think there is more than enough talent in the industry to really tackle those issues; it’s whether we can all get on the same page and go forward. I really, really believe in some of the changes that we’ve seen with the AMA, which is more on the right side of things and refocusing the collective power of our industry in three major ways. We have the Motorcycle Industry Council, which is an excellent voice to collectively represent the business side of things. The AMA has an excellent opportunity to further collectively grab the voice of the real end consumer, or motorcyclist. The AMA should be able to be more focused on the personalities and personal side of motorcycling and motorcyclists as people and their collective voice. And then the separation of racing, which in and of itself is an industry. The more we can see a collaborative relationship between those three industry groups gives us the opportunity to strengthen the voice and move forward.

What’s been the biggest challenge in your position and how have you dealt with that?

The biggest challenge on our plate right now is the weakness in the U.S. dollar. That’s the biggest challenge for a very single reason: You have very little to no impact on it. You just have to deal with it. There are a lot of things that we see in our industry, in our sport, in our company that you have some impact on it. And when you look at the weakness of the U.S. dollar vs. the euro, there’s just absolutely no ability to influence it. What we have to do from KTM’s perspective, we have to remember who we are as a company and what our brand represents, which is that ready to race core brand statement and we have to stay focused on that through the ups and downs of dollar fluctuations and even market fluctuations. And if that means that we have to tighten the belt or sharpen the pencil on some our costs, we have to always do things without sacrificing the core of who we are, which is that ready to race brand. You can get into cost savings mode or you can get into new revenue modes but if they stray away from your central core of you are, then it really risks diluting the brand, which can have longer term impacts than up and down fluctuations of currencies that happen over two-, three-, four-year periods.

What’s the best advice you can give to others in the industry?

I think the most important message, at least from the way we run our company and the way we work in the industry, is you always have to remember why we got into this in the first place and it’s for the love of motorsports. Motorcycling, from a very personal perspective, is why I got into this and why I choose to be here everyday. We have such an unbelievable gift that we can look our companies, our jobs and our sport with a certain level of pride and enthusiasm and connection into something we love, both in the office and outside the office. It’s a gift. It’s an absolute gift. I have so many friends outside of work. They do a number of things, from selling insurance to selling computer software to being in finance and accounting and I don’t know that they get the opportunity to truly love what they do in the same way it embodies their whole lifestyle. When you stay focused on that, then the ups and downs of the business cycles, the ups and downs of the economy, the ups and downs of the currency and the tough business decisions that we get into. They seem a lot easier to manage when you realize the gift that we have of being able to be so passionate about our business.

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