Nov. 10, 2008 – Victory to enter German market

Victory Motorcycles will be expanding its European distribution into Germany by the second half of 2009. The move was announced during the Intermot Tradeshow in Cologne, Germany.
“We displayed our 2009 models even though the first bikes available for purchase will be our 2010 lineup,” Mark Blackwell, vice president for Victory and Polaris Industries’ international operations, told Powersports Business. “Those bikes will be Euro 3 compliant, etc. We need about a year to carefully choose our dealer network, as we know the German market is tough and we’ve heard from others that you only get one chance, and that the German customer is very unforgiving. So we’re very sensitive about that and have actually been over there talking to consumers for three years or so.”
Blackwell says Victory constructed a new booth designed specifically for Intermot with the focus on attracting a large number of potential dealers and customers, and that the company received more than 100 solid leads during the show. Despite a solid reception from dealers however, there is plenty of work to do with consumers regarding brand recognition.
“I would argue that most of the dealers who came into our booth knew about us, but only maybe half of the consumers we met knew of the Victory brand,” Blackwell said. “So we’ve got some work to do to increase our brand recognition there, and that’s why we’ve spent so much time laying out the groundwork before entering this market.”
Even with increased uncertainty regarding global markets, Blackwell says the move to Germany has been part of Polaris’ long-term plan for several years and the company has no plans to change course.
“We committed to this move three years ago, and quite frankly (former CEO) Tom Tiller and I agreed some years ago that until we had our house in order in North America, we really don’t have any business getting into other markets,” he said. “As the business started to grow and things got a little more stable, we made the commitment to enter the market, which includes monetary investments in things like doing the work on the bikes to make sure they are Euro 3 compliant. The sound and emission standards are a little more rigorous; they have different color lights on the bikes, etc.”
Blackwell says although the European bike market is heavily geared toward sport bikes, the population there is similar to the demographics in the United States, where there are increasing numbers of older riders who are making the move from sport bikes to cruisers or touring bikes. He also points out the possibility of Polaris building manufacturing facilities overseas as another reason Victory hopes to increase its market share in Europe and other countries.
“(New Polaris CEO) Scott Wine has a lot of international experience and has some pretty ambitious plans for Polaris globally, and he feels longer term we probably need to manufacture in the regions of the world where we sell to be closer to the customer,” Blackwell said. “Quite frankly we were ready to look at that with our ATV line a few years ago, and coupled with KTM that was part of a strategy for international growth. It’s hard to say with Victory because we’re still relatively small, but longer term Scott believes we should be manufacturing our products locally.”
BMW
The German manufacturer showcased its updated line of the K series, provided more insight into its upcoming superbike and also announced a change in sales strategy.
Hendrik von Kuenheim, president of BMW Motorrad, said in a speech at Intermot that leading the German market in terms of volume “will no longer be the main objective.”
“That is why we have significantly reduced our direct sales promotion measures this year,” he said. “This naturally affects our sales figures, which in Germany are 12 percent lower than last year’s up until August.”
BMW also has seen its sales dip in the United States and Spain. However, sales are up in Italy, the manufacturer’s second-largest market, as well as in France and Great Britain.
Still, BMW is down nearly 3 percent in worldwide sales through September. However, BMW has seen consistent market share growth, with growth in the segment above 500cc occurring in “all relevant markets,” von Kuenheim said.
Peter Müller, BMW Motorrad’s executive vice president of development and model lines, shed some additional light on the company’s upcoming superbike, the S 1000 RR, which will be ready to order in the spring. Fully fueled, the S 1000 RR will weigh less than 451 pounds. “That means we will be right up front next year regarding output-to-weight ratio,” Müller said. The S 1000 RR also will have a new Sport ABS.
Significant updates also were announced in the K Series, including a larger cc engine. “By raising capacity to 1300cc, our engineers have not only increased output but also torque on all three models,” von Kuenheim said.
The K series includes the S, R and GT. The latter features optionally available, electronically adjustable ESA II (Electronic Suspension Adjustment II) as well as electronic cruise control, an electrically adjustable windshield, or seat heating controlled individually for the rider and passenger. MSRP on the three models has not been disclosed.
Piaggio
The Piaggio Group unveiled several new models at Intermot. Here is a look at some of those models that are coming to the U.S. market.