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BMW Husky Sale- Funky Reason??

racer7

New member
BMW stated reason for selling Husky was basically demographics. They claim that "urban mobility and electrics" where they intend to put resources is the wave of the future and how to compete at the high margin end.

I'd call a lot of that simply wishful thinking.

A $10K scooter that is more expensive to maintian than a std motorcycle isn't going to be more than a niche item. And I'd bet we're still a full decade or more away from the kind of electric motorcycle or even a hybrid that would attract attention from most riders. Sure, one can always find a few early adopters, eco freaks or whatever to sell to but that's a long way from a viable approach to the mainstream...

I could easily understand dumping Husky because the dirt bike arena is lower price point, lower margin and would consume resources out of proportion to potential profit but the other reason looks like an invention rather than reality..

Yet Marc Cook in the latest Motorcyclist notes that current Terra is a whole lot better bike than his much modded Suzuki 650 so apparently the current Huskys are good machines- be intersting to see what the new owner does with the brand and who is selling it eventually. I'll bet there are at least a few annoyed BMW dealers who signed on to the brand only to have BMW abandon it- and are now likely to get more pressure from BMW who want a one brand. one focus shop...
 
BMW may want a one brand shop but will it happen

The BMW dealership I'm using in Louisville is primarily a Harley shop. Probably 95% Harley's. But always has a decent inventory of BMW's

Harley & BMW seem to be a good mix
 
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A $10K scooter that is more expensive to maintian than a std motorcycle isn't going to be more than a niche item.

Yea, but don't forget BMW motorcycles are a niche as well. Through the years BMW has released their share of dogs. I don't know what to think of high end scooters. IMO BMW has released enough failures to make me wary. Time will tell if their right. ................

I could easily understand dumping Husky because the dirt bike arena is lower price point, lower margin and would consume resources out of proportion to potential profit but the other reason looks like an invention rather than reality..

Decades ago Husky had a great name within the marketplace. As of this writing it is ultraniche. Who knows if it will gain enough traction to make it in the marketplace. BMW abandoned the line pretty quickly and I wonder if their going to make it up to the early adopters within the dealer network. Husky would require massive effort and massive marketing in order to go anywhere. I'm of the opinion BMW Motorcycles is too small to justify a big marketing effort into a segment of the motorcycle market they really have little experience in despite GS's being used around the world.
 
Consider that - why many here still think the world revolves around the USA - BMW's main motorcycle market is Europe. The demand and market for economic urban transportation is significantly higher there than here. That's why a scooter may not be that much of a niche product. Also, the rate at which motorcycles are serviced by dealers as supposed to their owners is higher there than here. People are used to paying for service cost.
 
Consider that - why many here still think the world revolves around the USA - BMW's main motorcycle market is Europe. The demand and market for economic urban transportation is significantly higher there than here. That's why a scooter may not be that much of a niche product. Also, the rate at which motorcycles are serviced by dealers as supposed to their owners is higher there than here. People are used to paying for service cost.

I feel very uncomfortable with an OEM using the word "supplied" in a press release. I don't know if they use that word in Germany but it should not be used here. Both BMW and Husky are using the word. Not saying I'm right but I would take the word "supplied" to be the same as "wholesaled". Stuffing the channel makes the numbers look good on the corporate side. Both for units and floor plan charges. 2 birds killed with one stone. Down the road is what makes being a dealer good. The press release is not clear to those of us in the business and are aware of how numbers can be twisted to mean something better than they are.

I want to see something like "retail sales". That has meaning. Number of units "wholesaled" has meaning. Supplied means nothing specific. The head of BMW does discuss retail sales so the terminology is better. But were those units leftovers at discounted prices for example? Or, current years product. I did not find the Japanese using the word "supplied".

Due to quarterly goals and/or profits it is not uncommon to find publicly traded companies putting on their best face. It is critical that everyone is on the same page with the terminology in order to have a clear understanding.

I did not carefully examine everything that was written as I'm really not that concerned. So maybe I've missed a deeper explanation somewhere within that story. No matter. Don't send out press releases using the word "supplied".
 
BMW may want a one brand shop but will it happen

The BMW dealership I'm using in Louisville is primarily a Harley shop. Probably 95% Harley's. But always has a decent inventory of BMW's

Harley & BMW seem to be a good mix

In this day & age just about any of the bike shops that will survive are at least dual brand shops and the HD & BMW brands are actually a good mix as they don't compete against each other, not like some of the other brands.

Combining a bike & a car dealership is doomed to failure in most cases. In may work in a very large market like New York or LA but there is a different mindset between the bike & car crowd that manufacturers just don't get. In my view you can't force folks and they will go where they get the best service.

I know in this country Honda has tried the Power House Concept and in most cases it hasn't worked with the cars. Seems to work OK in the smaller markets with the rest of the Honda line, but car people are not bike people.
 
Brand attractiveness certainly doesn't carry over from cars to bikes for at least some of us. I ride three BMW bikes and periodically have to drive SOs 5 series that I despise- good twin turbo six (after fixing a whole mess of injection problems) and handling and pretty much crap everything else...almost $60K for a tiny pig whose B pillars are about 6 inches out of place and make entry not much above an Isetta...butt first...(and I'm only 6 ft and 180 lbs). Basically, it fits little girls - though it has a mess of headroom if you like to wear hats while driving..Then there's its carefully thought out I -drive, a pathetic gps, lousy shifting tranny, etc etc...
 
A little look around the BMW CCA Roundel and various car forums will reveal lots of "enthusiasm" for BMW cars. Various forms of racing, etc. It isn't all conservative rich people for sure, and if the dealer markets to the enthusiasts it will do well with motorcyclists, too.

Lots of folks try to maintain some sort of generic cheapness associating with motorcycles but reality is BMW motorcycles are for the exact same demographic as BMW car enthusiasts for a large part.

In Albuquerque we suffered for decades with what eventually became the 2nd-longest running BMW motorcycle dealer in the USA--they were awful and couldn't be trusted to successfully change oil.

Now we have a combined car/bike dealer (in Santa Fe too), and we're ecstatic. I'm about to leave for yet another sponsored ride.
 
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Now we have a combined car/bike dealer (in Santa Fe too), and we're ecstatic. I'm about to leave for yet another sponsored ride.

BMW motorcycles are essentially a niche product. A "real" (whatever that supposed to mean) business person in all likelihood would not be interested in operating a motorcycle dealership if the only brand carried was BMW. Despite what many think you don't end up making any "real" money to speak of given the level of investment and the level of risk. Overhead is simply so large especially when you take real estate costs into consideration along with the never ending technology costs of running the business, floorplan interest and insurance costs. And, oh yeah, you're trying to sell enough BMW motorcycles within a seasonal business, manned largely by enthusiasts, and hope to have enough left over to stay in business.

The end result is you end up with a motorcycle enthusiast who has financial backing, good credit and is able to put together a large 6 to 7-figure floor plan. Sometimes you even end up with folks who never ever worked in a dealership. To be an enthusiast is great however you need business skills in order to stay in business. You need both marketing and dealership skills to stay around for awhile.

I have substantial knowledge of car dealers who have owned motorcycle dealerships. Although you will find a few that make a go of it they typically perform poorly. The car business and the bike business may be almost identical but it is the differences between the two that seem to doom the motorcycle stores owned by car guys. Car folks rarely have in-depth accessory knowledge because they usually don't have any kind of substantial aftermarket accessory business in a car dealership. The 2nd item of importance is the enthusiast factor. Most car stores don't have it and most motorcycle stores do. The key is you need a combination of enthusiast/business person in order to get all cylinders running in a bike store in order to really turn it into something substantial. Many if not most motorcycle dealerships have problems putting those 2 skill sets together.
 
All very interesting. My take on the sale of Husqvarna has to do with two major things.

First BMW has not been successful at all selling Huskies. The overhead of running a two brand strategy combined with dismal sales doomed the project. Selling it allows them to recoup some of the costs. Stephan Pierer of KTM will do something with the brand but the main reason for purchase is the production capacity, particularly engine that the Husqvarna plant represents. Pierer and KTM can use production capacity in Europe for proposed expansions of their off road line and their planed expansion of their sport bike line.

BMW no doubt saw value in the production capacity; however it is on the wrong continent, i.e. it is not in India. What ever the niche BMW is in the business of selling motorcycles. India represents a major untapped market they have no real presence in. My guess is they like H-D, at a high level analysis, planned on shipping kit bikes to be assembled in India and avoid the massive import tariff then as they started to do the hard work of implementing and change their mind and decided to actually build in India. H-D is building its own plant while BMW is partnering with existing TVS.

All the talk of new models, scooters, electrics and a product line under 500cc is aimed at India.
 
I think Mika is on the right track, I'd only add that there was a fair degree of dealer dissatisfaction with the Husky line due to parts availability problems. I had personnel at two different BMW/Husky shops indicate they were not pursuing sales on the Husky lineup because they could not get reliable and timely access to parts and materials needed to properly service the machines once they were sold. Too bad, as Husky makes a great machine and would have kept BMW active in the serious dirt riding/dual-purpose market.

Best,

GTRider
 
I feel very uncomfortable with an OEM using the word "supplied" in a press release. I don't know if they use that word in Germany but it should not be used here. ".

This is very common here, in the U.S. All car manufacturers do that. They consider a car "sold" when it is shipped to their customer - the dealer. It has been "supplied". Why should BMW change their numbers if everybody else does it?
In Germany, the number reported and the common yardstick for OEM's market share is "new vehicle registrations". A number supplied by the equivalent of the BMV. That is actually vehicles (or motorcycles) sold to users.
 
This is very common here, in the U.S. All car manufacturers do that. They consider a car "sold" when it is shipped to their customer - the dealer. It has been "supplied". Why should BMW change their numbers if everybody else does it?
In Germany, the number reported and the common yardstick for OEM's market share is "new vehicle registrations". A number supplied by the equivalent of the BMV. That is actually vehicles (or motorcycles) sold to users.

Don't know if I'm right but for some reason "supplied" did not ring a bell for me. OEM's can and do discuss sales to dealers and sales to customers. "New vehicle registrations", "retail sales" and "wholesale sales" state specific results in specific areas. I'd have to reread the press release but to me supplied wasn't quite clear. If I recall none of the Japanese folks were using the word supplied but perhaps I'm wrong on that.

If all the domestic car OEM's are using the word supplied I would agree with you. That would automatically make me wrong. I'll have to pay more attention in the future.
 
Parts / Dealers
I would not want my BMW CV to have - Part of the team that did the Husqvarna purchase analysis/due diligence - on it. BMW saw a chance to pick up Husky from Castigliano and the Italian bank group for a very reasonable price but acted very quickly. The optimistic projections they made were not helped at all by the major decline in small capacity MC sales right after the deal, and the devastating decline in the Mediterranean country MC market that has gone on since.
- I suspect they did not come even close to the parts problems they inherited when they purchased the brand.
- BMW did a poor job of integrating Husky parts supply into their BMW system. This problem is compounded by some countries being controlled by independent importers and some by BMW AG (Canada and US are examples).
- My guess is internal money issues played a compounding role as BMW AG management shifted from building a two brand MC program to WT_ do we do with Husky to stop the bleeding.

Supplied
BMW AG normally uses variations of the root terms Sold and Produced in its annual reports and press releases. Sold/Sales/Units sold/etc refer to motorcycles BMW has realized some sort of revenue on. This may be sales to national importers/dealers/ or end customers. Produced numbers will include all units (sold or built but still owned by BMW AG). The two numbers allow investors and analysts to make judgements about inventory management and value as they weigh the numbers in view of the stock price and dividends (real or potential).

I am not certain which press release people are talking about that used the word ?supplied? so I can not speak directly to that. In the ones that I have read the term, while not defined specifically, had the implied meaning that investors and analysts would use to estimating BMW AG's exposure to legacy expenses and liabilities for warranties etc after the sale. Members may not like its use for their own reasons but in the press releases I have read it had a very understandable and appropriate use. Remember we are talking about the sale of a company and when the sellers duties end and the buyers begin. Sellers, buyers, investors, analysts and lawyers use a great deal of jargon that we don?t like when we are talking about on going businesses v selling a company.

<500cc bikes, TVS and India
I am far more interested in thinking about the sub 500c future for BMW as it partners with TVS and looks to going into the Indian market. Electric bikes are novelties here but in India they may represent part of the way for India to meet their global emission targets. In turn if volume is achieved there they may become more viable for production and delivery back to the EU or elsewhere. India represents a major sub 500cc market for ICE bikes in any category you want to slice and dice motorcycles into. For the same reasons I would love to know what they have planned for off road, dual sport and more importantly to me sport bikes in that sub 500cc range. They may be built for India and or Asian consumption and never be seen here but one can dream.
 
The word "supplied" in the context may have had it's roots in the translation from German to English. Consider that BMW is a foreign manufacturer and when they had a German press release that used the word "ausgeliefert" or "geliefert" to describe the transaction to the U.S., it may have been translated into "supplied".
I work with corporate lingo German-English on a daily basis and it is sometimes amusing what terms are being used even in top-level communications. Translators are language people. They sometimes lack the knowledge about fine nuances of technical or business terms.
 
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