Dealernews - December 2008 - (Page 14) SPEED READ VICTORY OVERSEAS U.S. OEM LOOKS ABROAD FOR GROWTH With the U.S. cruiser market at a standstill, Victory Motorcycles is forging into its 10th year anniversary not with an explosion of domestic sales, but with an eye for overseas growth. The company recently announced that it was moving into Germany and Australia, markets where Victory’s parent company, Polaris Industries, already has a strong presence with its ATVs and sleds. And it’s doing so a little older and wiser than it was back when the first Victory motorcycle, the V92C, was launched a decade ago. The steps Victory is taking to analyze these new markets reflects the lessons learned from that inaugural effort, mainly that just because a dealership is a good Polaris dealer, it might not be a good Victory Motorcycles dealer. Dealernews talked with Victory VP Mark Blackwell at a model lineup-wide press launch in October. “We’re trying to treat each market independently and make sure we understand the market and Polaris’ relative strengths and weaknesses and whether or not those dealers would also be good Victory dealers. And if they’re not we’re trying to be honest about that,” says Blackwell, who also heads Victory’s international operations. In Australia, the OEM launched its first company-owned store in Melbourne. While Polaris is strong down under, its products are sold primarily an agriculture-oriented dealer network. With a huge base of cruiser and touring customers in the metro areas, Victory chose to set up a company-run operation in the second most populated city in Australia. “It doesn’t really conflict with the dealers because they’re not really motorcycle-oriented,” Blackwell says. “In Germany it’s a similar situation. We have good ATV dealers but they’re also more in rural areas. We went in and did a geographic assessment of the market with some people who do the same thing for automotive companies,” he says. “We tried this in England and it was very successful and helped us identify three areas where we need to add dealers.” In fact, the move helped retails sales in the U.K. shoot up 90 percent, says Blackwell, adding that the actual increase is small, but significant. to-date in 2008, Victory’s growth is lower than forecast at low-to-mid single digits. Even the Vision, which is retailing well, is slightly below the forecasted number. With retail credit tightening up and a blanket of economic worries covering the country, Victory is focusing on taking care of the controllables. Blackwell says the company has been selling fewer products into the distribution channels to bring cruiser inventory down. At the same time, Victory was filling the channel with Visions given the strength of the touring market. “We’re not quite where we want to be yet. We probably have another season of work, but I would expect by next summer that we’ll have the cruiser inventory at the right level,” Blackwell says. The OEM is also well into a companywide initiative to “increase operational excellence.” This, Blackwell says, is a drive to improve in three key areas — speed, quality and cost. As is well noted, Polaris is looking to the hyperefficient standard set by Toyota and has been working for the past three years to streamline production and get products to market faster. Victory is basically trying to get inside its competitors’ product cycle time so it can either hit back quickly with a competing product or get its motorcycles out first. The main goal is keep dealers and customers satisfied, Blackwell says. This approach appears to be paying off as the company reports high customer satisfaction scores and favorable net promoter scores. This is a quality measurement based on advocacy and loyalty that uses the difference between the number of “promoters” and the number of “detractors” to come up with a net percentage of customers talking up the bikes. Blackwell reports that the number of owners who expect to repurchase a Victory is also up. In 2007 about 40 percent of buyers of its Vegas Low were women, who normally make up only about 8 percent of Victory owners. Blackwell says that the company can’t fix the market, nor can it change customer attitudes, but it can work hard to satisfy its customers and dealers. “This will pass and the market will improve. It will probably take a couple years. … We think we’re going to be OK,” he says. — Dennis Johnson DEALERNEWS.COM ON THE HOME FRONT Back home things aren’t as rosy. Blackwell says that with the market being down 7 percent in 2007 and another 7 percent year14 DEALERNEWS DECEMBER 2008 http://www.dealernews.com
Table of Contents Feed for the Digital Edition of Dealernews - December 2008 Dealernews - December 2008 Contents From the Editors Inbox Speed Read Joe Delmont Dealernews - December 2008 Dealernews - December 2008 - Dealernews - December 2008 (Page Cover1) Dealernews - December 2008 - Dealernews - December 2008 (Page Cover2) Dealernews - December 2008 - Dealernews - December 2008 (Page 1) Dealernews - December 2008 - Contents (Page 2) Dealernews - December 2008 - Contents (Page 3) Dealernews - December 2008 - Contents (Page 4) Dealernews - December 2008 - Contents (Page 5) Dealernews - December 2008 - Contents (Page 6) Dealernews - December 2008 - Contents (Page 7) Dealernews - December 2008 - From the Editors (Page 8) Dealernews - December 2008 - From the Editors (Page 9) Dealernews - December 2008 - Inbox (Page 10) Dealernews - December 2008 - Inbox (Page 11) Dealernews - December 2008 - Speed Read (Page 12) Dealernews - December 2008 - Speed Read (Page 13) Dealernews - December 2008 - Speed Read (Page 14) Dealernews - December 2008 - Speed Read (Page 15) Dealernews - December 2008 - Speed Read (Page 16) Dealernews - December 2008 - Speed Read (Page 17) Dealernews - December 2008 - Speed Read (Page 18) Dealernews - December 2008 - Speed Read (Page 19) Dealernews - December 2008 - Speed Read (Page 20) Dealernews - December 2008 - Speed Read (Page 21) Dealernews - December 2008 - Joe Delmont (Page 22) Dealernews - December 2008 - Joe Delmont (Page 23) Dealernews - December 2008 - Joe Delmont (Page 24) Dealernews - December 2008 - Joe Delmont (Page 25) Dealernews - December 2008 - Joe Delmont (Page 26) Dealernews - December 2008 - Joe Delmont (Page 27) Dealernews - December 2008 - Joe Delmont (Page 28) Dealernews - December 2008 - Joe Delmont (Page Cover3) Dealernews - December 2008 - Joe Delmont (Page Cover4)
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