HOT NEWS – March 8, 2004

Viper to offer chopper by Donnie Smith
Viper Motorcycle Company, Minneapolis, Minn., says it has signed a joint venture agreement with Donnie Smith to design a signature line of choppers. The initial chopper line-up is slated to be introduced this fall.

“Based on the Diablo Power Cruiser platform,” said Smith, a Hall of Fame Master Builder, “I am convinced we can manufacturer a functional chopper that is unique and distinctive to Viper like no other before it. This is an exciting opportunity to become involved with an OEM and design a factory custom chopper that can be built in volume.”

“It has been our intention from the beginning to be a full-line manufacturer of high-end custom motorcycles,” said Terry Nesbitt, Viper vice president of sales and marketing. “The Diablo Power Cruiser and the Donnie Smith Signature Series Chopper will give us a great start toward that goal.”

Both the Diablo and the planned chopper will be powered by Patrick Racing engines.

“We recently signed a long term agreement with Patrick Racing Inc. to provide us with V-Twin engines,” Nesbitt said. “After losing Merch engines to insolvency in the fall, we needed to find a quality engine manufacturer that would work with an OEM. I had known of Nigel Patrick for many years and believed he was one of the most respected engine builders in the industry.”

The billet 128 cubic inch V-Twin engine will be proprietary to Viper and carry the Viper logo, said Nigel Patrick, owner of Patrick Racing.

For more information, visit www.vipermotorcycle.com.

PIRELLI EXPANDS AWARDS

Pirelli says it will provide over $2.3 million in U.S. roadracing contingency awards during 2004, in excess of $1 million more than in 2003, and plans to pay deeper into the finishers’ list, as deep as 10th place depending on race organization and class.

Contingency payments in 2003 were limited to a racer’s top-four finishes during a race weekend. This year, Pirelli has done away with the limitation; there is no limit to the number of race payouts, once a minimum starting-grid number is met.

Details and qualifications of Pirelli’s expanded 2004 contingency program are posted on the Pirelli Racing Contingency link of the company’s U.S. Web site, www.us.pirellimoto.com.

Interested riders should contact one of the following Pirelli race vendors for full information and technical help:
California Race Services of Huntington Beach, Calif., 800/620-1277; Competition Motorsports South, Jacksonville, Fla., 904/384-8398; Mason Racing, Springpark, Minn., 612/250-9122; Street & Competition, Troy, N.Y., 518/279-4597; The Racer Supply Co., Shawnee, Kan., 816/550-1992; Tigershark Racing, Boring, Ore., 503/358-5704; and Trackside Racer’s Supply, Canton, N.C., 828/235-8400.

INDIAN PROPERTY SOLD

The Indian Motorcycle factory and property in Gilroy, Calif., has been sold to Ken Gimelli, a Hollister, Calif., industrial developer and vineyard owner, for $3.35 million.

Gimelli entered the only bid from the floor in an auction held Feb. 4 in Gilroy. A second bid was a written submission for $3.3 million, a minimum auctioneers were willing to accept to clear liens on the property.

The Gilroy property consists of a 154,000 sq. ft. building on a 274,000 sq. ft. lot. Gimelli said he plans to rent the location to anyone who is interested.

Bill Melvin, a Michigan retail liquidator who previously purchased the building’s contents – including everything from bike parts and branded clothing to tools and industrial equipment – held a sale of his own Feb. 4., liquidating much of the merchandise he said will not likely be used by anyone wishing to re-start production.

CYCLE HUTT, KTM SETTLE

After battles over domain names, Cycle Hutt of Bismarck, N.D., and KTM North America, Inc. reached a settlement agreement which gives KTM the Web sites it wants and gives Cycle Hutt the motorcycle products it wants.

The two parties had filed simultaneous actions for differences related to trade agreements, trademarks and copyrights. While the details of the settlement remain confidential, the result is that KTM North America has reinstated Cycle Hutt as an authorized KTM dealer and in turn, Cycle Hutt fully recognizes and agrees to honor KTM’s trademarks and copyrights.

“We felt that it would be best to put our differences aside,” said Cycle Hutt owner Justin Bohn. “Rod (Rod Bush, president of KTM, North America) has been very accommodating in getting this resolved. KTM has a trademark to protect and we intend to assist them any way we can.”

Opened by Bohn and his wife Tammy, Cycle Hutt became an authorized KTM dealer in May of 2000. About 10 months ago Cycle Hutt bought the Web domain ktm.com and began selling KTM motorcycles, parts and aftermarket products on the Internet. When the dealership’s Internet business steadily gained customers from across the U.S., KTM moved to stop the practice.

The OEM wanted the rights to ktm.com, and when a deal couldn't be brokered, KTM pulled its dealership from Cycle Hutt.

The Bohns won a ruling by the Internet Corporation for Assigned Names and Numbers and they maintained the domain name. But they were still without the dealership, which meant they had to buy parts from other dealerships at retail price.

The settlement, completed Feb. 7, now has Cycle Hutt operating two Internet sites. One, where customers can locate and order parts and accessories, is www.ktmhutt.com, operating as a division of Cycle Hutt, Inc. The second is www.cyclehutt.com, a site where local race schedules, results, point standings and rider profiles are posted.

BRP MAKES CHANGES

A new public relations team has been tapped to promote Bombardier Recreational Products (BRP) following the purchase of the company.

The changes to the marketing department’s public relations team include naming David Thompson director, public relations and competition. In the newly – created role, Thompson is responsible for all U. S. public relations activities. He’ll be based in Sturtevant, Wisc.

Reporting to Thompson will be Steve Cowing, competition and media relations manager. Based in Minneapolis, Cowing will expand his responsibilities to include ATV and PWC racing.
Marc R. Lacroix, public relations manager, Canada, will handle all public relations activities for Canada from his office in Valcourt.

He’ll report directly to Chris Dawson, vice president, North American marketing, but will also have a “dotted-line relationship” with Dave Thompson to ensure proper coordination between Canada and the U.S.

TERHORST JOINS AGENCY

Long-time Honda communications professional Pete terHorst has joined the Vreeke & Associates agency as media coordinator for Dunlop Motorcycle Tires. Dunlop is, the largest supplier of original equipment and replacement motorcycle tires in the U.S. In addition to providing results from AMA road races, ter Horst will work on various Dunlop and Honda marketing, advertising and communication projects.

TerHorst is a veteran of the motorcycle industry. He spent 20 years in sales, marketing and public relations with the Motorcycle Division of American Honda. TerHorst was most recently the executive director of the Pediatric Brain Tumor Foundation.

KASEA HIRES NEW CEO, VP

Seattle-based Kasea Motorsports has hired a new CEO and vice president.

Thomas R. Wie has been named CEO and Judith A. Maier has been named vice president.

A veteran of several major firms and former owner and operator of a consulting business, Wie brings over 15 years of management and sales experience to Kasea. Maier, with an MBA, JD, has more than 25 years of senior management, legal, and marketing experience.

PROGRESSIVE PROMOTION

Progressive Suspension has promoted former Production Operations Manager Joe Stanish to director of operations.

Stanish will be responsible for purchasing, shipping, quality control, production, receiving and off-site operations. He will report to Scott Hodgson, president.

PIAGGIO GOING TO CHINA?

Italian scooter manufacturer Piaggio reportedly is interested in expanding into the Chinese market. According to Italian newspaper Il Sole 24 Ore, the company’s chairman, Roberto Colaninno, and chief executive, Rocco Sabelli, have met executives of several major Chinese motorcycle industries in Beijing to discuss possible partnerships with Chinese manufacturers.

LONDON CYCLE USE UP 20%

Motorcycle use in London has increased 20% and non-motorcycle traffic has fallen 16% since Feb 17, 2003, when lawmakers introduced in London what they called a Congestion Charge – essentially, a $7 toll on motor vehicles entering a portion of the city’s central district in an effort to curb motor vehicle traffic by 15%. Motorcyclists, scooterists and bicyclists are not charged.

According to Transport for London (TfL), the bureau formed to oversee the new toll system, motorcycle use across London increased 20% while non-motorcycle traffic within the zone has fallen by approximately 16%.

REDLINE REPORTS 3Q

For the the third quarter, ending Dec. 31, 2003, Redline Performance Products Inc., Vista, Calif., reported a net loss of $1.9 million, or 40 cents per diluted share, versus a net loss of $934,055, or 82 cents per diluted share, for the same period the previous year. The net loss for the first nine months of fiscal 2004 was $5.4 million, or $1.32 per diluted share, versus a net loss of $2.2 million, or $1.67 per diluted share, for the same period one year ago.

Redline did not report any revenues for the three- and nine-month periods.

The company reported that its increased net losses in fiscal 2004 were due primarily to higher selling, general and administrative/personnel expenses, and higher R&D costs. Interest expense decreased significantly in the third quarter of fiscal 2004, however, from the prior year's third quarter as a result of the company repaying substantially all of its long- and short-term debt with the proceeds from the May 2003 initial public offering.

The company began production of its 800 Revolt snowmobile on Jan. 29, and said it would begin shipping product in February.

CLARIFICATION

The Jan, 19, 2004, issue of Powersports Business incorrectly reported the number of powersports dealer management systems installed by ProQuest. The number should be approximately 2,500 installations.

SWAPMEET PLANNED

Tug Hill Promotions, LLC, said it plans to present the Powersports Swapmeet and Expo at the Boonville (N.Y.) Oneida County Fairgounds on Saturday and Sunday, Sept. 11 & 12, 2004.

The meet will be host to manufacturers of snowmobiles, ATVs, motorcycles and PWC. The general public will be invited to swap used parts and accessories throughout the two day event. For details, contact Dennis Johnson at 315/826-3312.

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