HOT NEWS – May 10, 2004

Harley plans expansion in Japan
An on-going bid to boost Harley-Davidson’s brand image and attract new customers in Japan is expected to gain steam this summer when the manufacturer’s subsidiary, Harley-Davidson Japan, begins development of a nationwide network of large-scale dealerships.
Harley had 145 stores in Japan selling its motorcycles as of Jan. 1, 2004, with the average store size of approximately 600 sq. meters. Now, the firm plans to expand the size of its retail locations to an average of 1,700 sq. meters, allowing dealers to offer all 26 Harley-Davidson models plus a selection of parts, garments and branded accessories.
The first such store was opened in Okazaki, Aichi Prefecture, last year. Based on feedback from the Okazaki location, Harley-Davidson Japan now plans to have five such stores by 2007 and 10 by 2009, primarily in major metropolitan areas.
The subsidiary will provide store designs, employee training and assistance in event planning.
BRP 2003 Revenues Flat
Bombardier Recreational Products Inc. (BRP) says its unaudited revenue for its year ended Jan. 31, 2004, was $2.5 billion Cdn, the same as the year before. The company, which was spun off from Bombardier, Inc., in December, said it plans to release its audited consolidated financial statements May 28, 2004.
BRP, based in St. Bruno, Quebec, did not reveal any profit or loss statements, but did say long-term debt as of Jan. 31 was $640 million Cdn while total cash and cash equivalents stood at $196 million Cdn.
BRP was sold by Bombardier Inc. to private investors for $960 million Cdn in December 2003.
Ehlert makes changes
Ehlert Publishing Group, Maple Grove, Minn., producer of Powersports Business and many consumer magazines, has announced several management changes.
Stacey Marmolejo has been named to the new position of vice president/group publisher for the company’s business-to-business group. “The continued growth in our Powersports Business group and the acquisition of Boating Industry magazine created a need for more expertise into the nuances of business-to-business publishing,” said Steve Hedlund, Ehlert president.
Most recently a group publisher with VNU Business Media, Marmolejo was the publisher of Ehlert’s PWC magazines prior to joining VNU.
In addition to the business- to-business operations, she also will lead the strategic development of the company’s consumer Web sites.
At the same time, David Voll was promoted to national director of sales for the business-to-business group.
Voll, who helped launch Powersports Business in January 1998, is responsible for sales and management in the business-to-business magazines, Powersports Business and Boating Industry, and related ancillary products.
In other changes, WaterCraft World, the leading magazine dedicated to personal watercraft enthusiasts, has a new editor, a new sales manager and a new location.
Eric Skogman has stepped aboard as the new editor of WaterCraft World, and Melissa Bluestein has been named national sales manager. At the same time, the magazine’s headquarters has been moved to the Ehlert Publishing Group’s Carson, Calif., office. It had been based in Ehlert’s Maple Grove office.
The changes become effective with the July 2004 issue of WaterCraft World. Skogman joined the Ehlert editorial staff in December 1997, and four years later became editor of the Ehlert’s Snow Group, which includes Snowmobile, Snow Goer and Snow Week.
As editor of WaterCraft World, Skogman succeeds Matt Gruhn, who is now editor of Ehlert’s Boating Industry magazine, based in Maple Grove. Gruhn will retain the title of editorial director for WaterCraft World.
Bluestein was previously national accounts marketing manager for Random House Publishing, and, prior to that, community relations manager for Barnes & Noble, Inc.
H-D Twin Cam 88 in Court
Five motorcycle owners who claim they were fraudulently induced to buy or lease defective motorcycles have launched another lawsuit against Harley-Davidson, Inc. in Milwaukee County Circuit Court.
The suit, formally filed by attorney Ted. M. Warshafsky, seeks to overcome a recent Wisconsin Supreme Court ruling that dismissed an earlier claim that the company knew or should have known that 1999 or early 2000 Harley models with the Twin Cam 88 or Twin Cam 88B engines were defective. In that case, the court ruled 5-1 that the claim was too uncertain and speculative to sue for damages.
The plaintiffs filing the recent suit are seeking class-action status, claiming owners of motorcycles with the “defective engines” risk sudden breakdowns and a loss of value.
Japan Motorcycle
Production drops 13.1%
Japan produced 162,450 motorcycles during February, down 24,482 units or 13.1% compared with the 186,932 units produced during the same month of the previous year, according to the Japan Automobile Manufacturers Association (JAMA), which said the production total showed a drop in two-wheeler production for 13 consecutive months.
This chart shows each manufacturer’s February 2004 production in Japan, followed by February 2003 production:
Maker 2004 2003
Honda 51,317 55,410
Yamaha 47,329 58,207
Suzuki 40,176 47,313
Kawasaki 23,606 25,903
JAMA says Japan’s motorcycle manufacturers exported 144,304 units during February 2004, up 6,807 units or 5.0% compared to the 137,497 units recorded for the same month of the previous year.
The total value of motorcycles exported during the month was $822.80 million, including $698.31 million for vehicles and $124.49 million for parts.
Here is each manufacturer’s February 2004 exports, followed by its February 2003 exports: Honda, 31,625 units and 31,663 units; Yamaha, 45,151 units and 50,368 units; Suzuki, 44,744 units and 35,211 units; Kawasaki, 22,784 units and 20,255 units.
A total of 38,329 units were imported by the U.S. from Japan during February 2004, down from the 50,406 shipped during February 2003.
Bike Sales Slow in the UK
Motorcycle sales in the United Kingdom fell by 17% during March 2004 compared to sales during March of 2003, and are off 15% for the first quarter of the year.
Figures released by the Motorcycle Industry Association (MCI) show that a total of 14,304 motorcycles were registered last month, compared with 17,209 in the same month a year ago. Sales of Adventure bikes were up 3%, yet naked bike sales were down 28%, sport-touring bikes experienced a 26% drop, custom bike sales were off 24% and scooter sales were down 25%.
The MCI said moped sales suffered more, with a 35% drop from 3,337 units in March 2003, to 2,274 this year.
The MCI said Yamaha’s YZF R1 is the best-seller of the year so far, with 753 units sold since the beginning of January. Honda occupies both second and third positions with its CBR 600 RR, 583 units; and CBR 125 R, 582 units.
The top 10 most-registered new two-wheelers in the UK during the past year, according to the MCI, are: the Yamaha YZF R1; Honda CBR 600 RR; Honda CBR 125 R; Suzuki SV 650 S; Honda SCV 100; Yamaha FZ6 Fazer; Piaggio NRG; Suzuki GSXR 1000; Piaggio ZIP 50; and Honda XR 125 L.
Ducati NA hires PR agency
Ducati North America has retained JMPR, Inc. to handle its public relations in North America.
JMPR will work with Ducati’s existing internal public relations team to assist in promoting new model introductions and to help promote Ducati Performance Apparel through mainstream venues. Assistance is set to begin with the May 2004 World Ducati Week (WDW), plus Moto Giro and Centopassi. Public relations support will also include Ducati’s AMA Superbike racing activities, other Ducati racing endeavors worldwide and interfacing with Ducati Owners Group members at AMA Superbike events.
Founded in 1977, JMPR is based in Woodland Hills, Calif. Its client base covers a wide variety of automotive and lifestyle industries.
Featherlite shows gain
Featherlite, Inc., Cresco, Iowa, reported net income of $1.2 million, or 16 cents per diluted share, on sales of $56.4 million for the first quarter ended March 31, 2004. This compares with a net loss of $677,000, or 10 cents per diluted share, on sales of $41.7 million in the first quarter last year.
The consolidated net sales for the first quarter of 2004 were up 35% over the same period last year. Sales in the specialty trailer and transporter segment increased by 32% over the same period last year.
The improved results were due to increased unit sales volume and average gross margins per unit sold as well as improved efficiencies gained by the increased volume.
Conrad Clement, Featherlite president and CEO, said the company’s lenders have amended certain of its financial debt covenants providing the company with greater operating flexibility.
As a result of the improved performance and the changed loan covenants, he said, Featherlite’s auditors eliminated the “going concern” paragraph included in its report on the company’s financial statements for the fiscal years ended Dec. 31, 2001 and 2002 as of Dec. 31, 2003.
“Our auditors, Deloitte and Touche LLP, expressed an unqualified opinion on the company’s Dec. 31, 2003, financial statements,” he said.
At March 31, 2004, consolidated order backlog levels were up 36% over March 31, 2003.
Honda Sets Up in Russia
Honda Motor Co. has set up a wholly-owned unit in Russia to expand its motorcycle, automobile and power products in what it described as a rapidly growing market. Honda Motor RUS LLC was capitalized with 30 million Russian rubles, has a staff of 30 and is based in Moscow. Honda previously had only a resident office that it established in 1992 mainly to gather market information.
Clarification
In the April 19, 2004, issue of Powersports Business a story on the J.D. Power & Associates survey of motorcycle owners omitted several numbers in discussing the methodology used to conduct the survey. The story should have reported that 48,456 new motorcycle owners who purchased a new street or dual-sport motorcycle between September 2002 through May 2003 were surveyed. A total of 11,347 usable responses were received by J.D. Power, a response rate of 23%. psb