HOT NEWS – July 26,2004

Louisiana Governor Kathleen Beaux Blanco has signed into law HB1354. Supported by a coalition of marine manufacturers, dealers and state regulators, the new law, effective August 15, is designed to create a more favorable business environment and a better experience for consumers looking to buy or service a boat or engine.
The legislation makes the following key changes:
Area of Responsibility: New requirements will allow marine manufacturers to expand their dealer network in the state. A manufacturer will be able to define new territories for existing and additional dealers using market research information from credible industry sources. New dealerships can be located closer than the previous restrictions of 15 miles in urban areas and 30 miles in rural areas. Should an existing dealer contest the new territorial boundaries, the Louisiana Used Motor Vehicle and Parts Commission will rule on the appropriateness of the data. If the data supports the new territories, the commission will be required to support the changes. If not, the dealer’s protected territory will revert to the 15- and 30-mile restrictions. The Commission’s ruling can be appealed in court.
Succession: Successors to marine dealerships will be required to apply to the manufacturer for permission to take over the existing dealer contracts, with the successor bearing the responsibility for meeting the manufacturer’s guidelines for signing new dealers. Previous law placed the burden upon the manufacturer for proving that a successor did not meet its criteria.
Mandatory Buy-Back: While manufacturers will remain responsible for buying back current and previous year models of vessels and engines, the price paid for buyback may be determined by an independent marine surveyor who will determine a fair price based on damage or neglect to the vessel. This provision replaces a mandatory buy-back of 100% of dealer invoice.
Boat Package Definition: New language was enacted that defines the brand of a boat package as being the brand of the vessel, not the brand of an engine installed by the manufacturer. This clarifies ambiguous language in previous law.
In other watercaft news from Louisiana, PWC operators may soon be required to be at least 16 years of age if they intend to ride in the state. A legislative proposal sponsored by Sen. Noble Ellington was unanimously passed in the State Senate on June 16 after it carried a favorable 82-12 vote in the State House on June 14th. The legislation has been sent to the Governor for Executive approval. If approved, it will become effective January 1, 2005.
Until Senate Bill 710 was passed, the minimum age requirement was 13 years. Those individuals who were of legal operating age by the time this legislation was passed but still not 16 years of age will be grand fathered in by the new law with certain conditions. They will be required to complete a boating safety education course and carry proof of completion when they ride.

Honda begins scooter sales in China
Japan’s Honda Motor Co. has started selling the first Honda brand 50cc scooter in China.
Patterned after the Today scooter, which Honda’s affiliate in China has been exporting to Japan since 2002, the two-wheeler sells for US$700.
Honda hopes to sell 50,000 scooters through its network of about 4,300 sales outlets, according to news service Asia Pulse Pte. Ltd.
China’s motorcycle sales are expected to reach around 12 million units in 2004, with the bulk of the units representing 100cc to 125cc models. Honda says it estimates that approximately one million of the units will be 50cc scooters.

Yamaha and GE team up on finance program
Yamaha Motor Corporation, U.S.A. and GE Consumer Finance are rolling out a national program offering installment credit to customers for the purchase of powersports and marine equipment and accessories. The new Yamaha Installment Financing program, designed to complement the manufacturer’s existing revolving program, is being rolled out through the network of more than 2,300 Yamaha Motor Corporation dealers nationwide.
The companies say key benefits of the program include the ability to offer on-the-spot financing to qualified customers, and promotional financing at competitive interest rates and terms. Marketing tie-in programs will also be planned to enhance awareness of Yamaha products lines and drive seasonal interest.
Retail Sales Finance Servicing Company, based in St. Paul, Minn., is a GE affiliate and unit of GE Retail Sales Finance. GE Retail Sales Finance, based in Kettering, Ohio, is operated by GE Consumer Finance and provides private label credit card programs, marketing, installment lending and financial services for national and regional retailers.

STR adds Financing
Officials at STR Motorsports say the company has entered into an agreement with New York-based Tomahawk Industries, Inc., which operates as Sparta Commercial Services, to establish a private-label financing program for Kymco products.
STR Motorsports, headquartered in Inman, S.C., is the exclusive importer and distributor of Taiwan-made Kymco vehicles in the United States. With a current network of 335 dealers throughout the U.S., STR offers a line of Kymco motor scooters, motorcycles and ATVs.
Bruce Ramsey, STR director of sales and marketing, said the STR financing program will enable Kymco dealers to go to the STR Web site, click through to a customized financing site, submit credit applications online, receive quick credit decision responses, offer a choice between leasing and an installment loan with terms up to five years, and complete the transaction with consumer contracts that can be downloaded, printed, and signed by the customer.
Dealers will also have the benefit of an on-going record of all transactions, as well as a detailed customer history that they can review at any time.
The new financing program is expected to be implemented in the third quarter of 2004.
For more information, visit or for more information.

Japan’s Production Declines Again
The Japan Automobile Manufacturers Association (JAMA) says Japanese motorcycle manufacturers produced 112,745 units during May 2004, down 3,658 units or 3.1% compared to the 116,403 total registered in the same month of the previous year.
It is the sixteenth consecutive month that production has declined compared to the same month of the previous year.
Production for the five-month period from January 2004 through May 2004 was 744,923 units, down 66,135 units or 8.2% compared with the production of 811,058 units recorded in the same period of the previous year.
Manufacturers exported 72,464 units during May 2004, down 1,181 units or 1.6%, compared with the 73,645 units recorded for May 2003.
The total value of motorcycles exported for May 2004 was $376.71 million, including $249.20 million for vehicles and $127.51 million for parts. This is an increase of $8.69 million or 2.4% compared with $368.02 million recorded for the same month of the previous year.

Evader to Retail in Europe
Officials at Evader, Inc., the maker of electric vehicles powered by proprietary technology, say they have struck a deal with The Schneider Group to have Evader product retailed through a network of 512 dealers in Germany and 300 dealers in France.
Evader, of Bellevue, Wash., says The Schneider Group, based in Stuttgart, has agreed to a minimum purchase of Evader products worth more than $7 million during the next 16 months.
Daniel Schneider, head of the German organization, has been involved in the motorcycle, scooter and bicycle business for more than 20 years and has built a massive network of rental and sales outlets. Schneider expects to have more than 1,000 dealers selling the Evader product line by the end of 2004.
“With gas prices at more than $4.75 a gallon in Germany, and many major European cities suffering from pollution and noise problems, Evader electric scooters are the perfect solution,” Schneider said.

Anastasia Resigns from TWS USA
Rod Anastasia, vice president of TWS USA, Inc., master importer of European LEM Motor mini cycles and mini quads, resigned from the company, effective July 1.
“Several opportunities, both personally and professionally, have come my way that I have no choice but to take advantage of, and unfortunately I cannot do that and still give the required effort and time needed to TWS and LEM,” Anastasia said.
For additional information about TWS USA, Inc. or LEM product, call 909/477-6614

New Board Member at Lehman trikes
Lehman Trikes Inc. says a new board member was appointed by shareholders at the company’s annual meeting, held June 5.
Daniel W. Patterson Sr., former president and CEO of Lockheed Martin Aircraft & Logistics Centers in Greenville, S.C. was tapped to fill the position. Clyde Fessler and Matthew Gaasenbeek chose not to stand for reelection. The Lehman board now consists of Phil Shragge, Larry Strilchuk, John Lehman, Jim Wild, Les Brown and Patterson.
Described as a lifelong motorcycle enthusiast, Patterson was responsible for directing the Lockheed lines of business in aircraft maintenance, modification, and logistics at more than 80 operating locations around the world. With a focus on customer and industry partnerships, he was dedicated to developing greater customer satisfaction through continuous improvement.
Lehman Trikes, Inc., based in Westlock, Alberta, Canada, is a manufacturer of kits that convert conventional two wheel motorcycles into three wheel motorcycles. The company also assembles and sells complete trikes.

Big Dog adds two
Big Dog Motorcycles, Wichita, Kan., has added Mike White to its customer service, technical support and warranty team. White previously worked for Mercury Marine, a subsidiary of Brunswick Corp., where he directed warranty administration and claims processing, training.
Also joining Big Dog is Ron Hill as quality assurance manager, expanding the company’s quality control team to 11.
Hill, a member of the American Society for Quality, brings 20 years of quality control and assurance experience. Prior to joining Big Dog, he worked as analyst and quality control engineer for Cessna Aircraft, for Boeing Corporation, Bombardier Aerospace and Bausch & Lomb.
Big Dog started producing motorcycles in 1994. Today, the company has nearly 100 dealerships, eight of which are Big Dog Motorcycle branded retailers, and produces its own parts and accessories in addition to a line-up of six bike models. Approximately 300 people are employed at its 175,000 sq. ft. headquarters.

Johnson Joins OMS Sports
Former Chevy Trucks/Kawasaki Off-road Team Manager Mark Johnson has joined OMS Sports as managing director, a position that will have him running the day-to-day operations of the sport marketing agency based in Kentucky.

Malaguti USA Signs with Sparta
Malaguti USA announced it has signed with Tomahawk Industries, Inc., operating as Sparta Commercial Services, to offer a private-label financing program for all Malaguti vehicles sold in the U.S.
Malaguti dealers will be able to process all transactions online, including credit applications and consumer contracts, as well as calculate both lease and installment loan alternatives, all through a secure Web site developed for Malaguti by Sparta. The program is expected to begin in the third quarter of 2004.
Malaguti USA, ( based in Miami, Fla., is the exclusive North American distributor for Malaguti SpA and supplies 110 dealers. Malaguti of Bologna, Italy, is a family owned and operated company.

A story in the June 7, 2004, issue of Powersports Business incorrectly identified several officials at Kawasaki Motors Corp., U.S.A. (KMC). Kawasaki announced a reorganization, effective May 10, designed to increase overall efficiencies and productivity within its various operational groups.
A key move in shortening the lines of communication within the company involves bringing together the marketing and
sales operations under Tom Orbe, who moved from vice president, marketing to vice president, sales and marketing, The move helps in both short and long-term KMC growth plans, according to KMC’s president, Steve Hamada.
Tony Murr, who had been vice president, sales, moves over to become vice president, marketing. Rodger Howe, who had been director, communications, becomes director, national sales, assisting Orbe.
Jim Weston, formerly West region sales manager, moves into the newly created position of director, sales planning and inventory management. Integrating sales and program planning, dealer order planning and vehicle/import planning, Weston will direct his field sales experience at optimizing KMC’s supply chain to support dealer needs. Patrick Kelly, previously director, product management, becomes director, product planning and research, focused on enhancing future product development.
Combined with the consolidation of several product-related functions into a product operations group under Dave Dora, vice president, product operations, KMC is “ideally positioned for efficiency and profitability,” said Hamada.
Kawasaki Motors Corp., U.S.A. markets and sells through a network of more that 1,500 independent retailers. KMC and its affiliates employ nearly 2,400 people in the U.S., with approximately 400 of them located at the Irvine, Calif. headquarters.

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