Vicious Capitalism

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News

Try This with your Road Glide

Kain Saul has converted a Harley-Davidson Xr1200 to Dirt use–including a heavily modified suspension–taken it out into the Australian countryside…and done a back-flip on it.

Pretty cool.

And, yes, I do know that Chuck Carothers did the same stunt in Czechoslovakia.  Or the Czech Republic, or whatever the hell it’s called now.  But he didn’t stick his landing and got thrown off the bike.

FAIL!

BMW S1000RR: Training Aid

Well, I have to say this is interetesting:  Keith Code’s Sportbike/track/racing school has dumped the Ninja in favor of brand new BMW S1000RRs as the training sportbike for their racing courses.

“We are proud to offer our students training on this spectacular motorcycle,” his website proclaims (highlighting the last two words in red), and he’s not the only one to praise the Beemer; hyperbolic raves have been flowing from bike journos since the German bike’s recent introduction at the Portimao circuit in Portugal. Roadracing World says Keith has “no hard feelings” towards Kawasaki, which reportedly discontinued their sponsorship as a cost cutting measure.

It’s been interesting to see the powerfully positive reviews of the BMW S1000RR in the motorcycling press. And now, having gotten Kieth Code on their side–undoubtedly with valuable consideration changing hands–BMW has a powerful ally in California with Kieth Code using their bikes fore Superbike Training.

Naturally, I would be willing to provide a completely unbiased report on superbike training with the S1000RR…if Mr. Code would invite me up for a training session.

Hint, hint.

Times Are Tough All Over

The US isn’t the only place where motorcycle sales have been dismal this year.  ACEM, the Motorcycle Industry Association in Europe, is reporting that, as of September, year-over-year motorcycle sales in Europe are down by 27%.  Here’s the ugly, ugly chart:

ACEM Sales 2002-2009 (September)

ACEM Sales 2002-2009 (September)

That’s definitely not the sales results graph you want to see.

No 2010 Suzukis in the US

Hell for Leather is reporting that Suzuki will not be importing any of their 2010 model motorcycles to the USA.  Due to the slowness of US motorcycle sales, Suzuki has seen their sales decline to 434k motorcycles for the first three quarters of this year, compared to 772k last year.

So, until the current inventory has been absorbed by buyers, no new bikes will hitting the US from Suzuki.

Free Erik? Done.

As of this afternoon, Harley Davidson announced that Erik Buell has left the MoCo, and is opening a race shop.  His new venture, Erik Buell Racing LLC, will specialize in creating race-use only 1125r motorcycles under a lciense from Harley-Davidson.

As such, he will no longer be an employee of Harley-Davidson, and will once again be directly involved in the motorcycle racing world.

The fascinating question is whether or not this is just a stop-gap venture to take up his time until February 2011, when his no-compete contract with H-D expires, and he is free to join up with another motorcycle company to begin building bikes for the rest of us again.

The full press release from Harley-Davidson is below the fold.

Continue reading

Pass the Popcorn

The big difference between current MotoGP and WSB racing is that MotoGP racing is limited to 800cc bikes, while World Superbike runs literbikes.  The reason for the MotoGP switch to 800cc bikes was that the literbikes were just too powerful and dangerous…or some such nonsense…for MotoGP racing.

Well, a few weeks ago, Dorna MotoGP boss Carmelo Ezpeleta said on Spanish TV that he wants MotoGP to return to literbikes for the 2012 season.  Which means essentially that MotoGP and WSB would more or less be conducting the same races.

Well, this put WSB boss Paolo Flammini’s panties in a wad.  he doesn’t like the idea one bit, and he’s said so to the Italian motorcycling news web site GPOne.com (in Italian).  He also says,

I repeat what I said earlier: we have had assurances from the FIM President Vito Ippolito that this regulation would not be approved…We are ready to take whatever action is necessary to defend the contract we have with the FIM, which, let us not forget, also covers the 600cc class based on production bikes.

So, Ezpeleta says he wants literbikes, and Flammini says he can’t have them.

I expect someone is going to be deeply disappointed, but only after some hideously interminable court proceedings in Barcelona, Rome, and/or Brussels.

Lies, Damned Lies, and Statistics

Motorcycle traffic fatalities in California are down.  Or, are they?

Motorcycle Sales: Dismal

The most recent sales figures for motorcycles don’t look good at all.  The industry is taking a shellacking unlike anything I’ve seen since ’81-82.  As of the third quarter of this year…

…motorcycle sales totaled just 434,370 so far this year, down from 771,950 in the first 9 months of 2008 for a drop of 337,580, which makes overall sales down 44%.

I wish i could say things were going to get better soon, but I don’t believe that to be the case.  For instance, take our current 9.8% unemployment rate.  If we counted employment stats like they did prior to 1973, that reading would actually be 17%.  Those are depression numbers.

And, speaking of the depression, everyone thought things were going to get better and better in 1931.  There was lots of happy talk about the economy, just like there is now. I’d like to think that’s as far as the parallel goes, but I wouldn’t bet money on it.

motorcycle sales totaled just 434,370 so far this year, down from 771,950 in the first 9 months of 2008 for a drop of 337,580, which makes overall sales down 44%.

Harley Davidson Kills Buell, To Sell MV Agusta

I wish I could say I was surprised this morning to finally see the news made public that Harley-Davidson was going to sell MV Agusta, and shut down Buell’s operations.  But, I wasn’t.

Let’s address the MV Agusta deal first.  I never really understood exactly what the MoCo thought it was getting when it purchased MV and Cagiva.  Turns out I’m not alone in that, since apparently nobody at Harley-Davidson did either.  Cagiva was a financial basket case, and MV–though it had a glorious racing past and venerable reputation–had been reduced to a boutique maker of a small number of motorcycles.

And once HD had finished crowing about buying it, they proceeded to do…nothing.  No press releases.  No earth-shattering changes.  They just let it sort of sit there.  They owned it, but once they did, they didn’t seem to know what to do with it.  So now, they’re selling it at what is probably going to be a deeper discount than they purchased it for, so it seems like it was just a multi-million-dollar bath for Milwaukee.

Oh, well, it’ll make a nice write-off against tax, I’m sure.

As for Buell, I’ve already gotten into some detail in the post linked above as to why the MoCo had completely bungled the management of Buell.

A brief tour of BadWeb, the Buell biker forum, today shows that the Buellers are no more receptive to hearing bad news about the company–nor any more prone to think about it realistically–than they were last month when I wrote that my sources indicated to me that Buell was probably going to be shut down.

It’s full of fantasies about some sort of demonstration to make HD reverse its decision.  There also seem to be a number of analysts who write that this is an insane decision for the MoCo, because losing Buell will destroy Harley.

That’s just fantasy.  Quite apart from the fact that Harley is doing a fine job of destroying itself by confining itself to an aging customer base, the fact is that Harley killed Buell a long time ago through their mismanagement of the brand.  Killing Buell is a symptom of HD’s problem, not the cause of it.

The company says they are doing this to concentrate on their brand, by which I assume they mean continuing to market even more aggresively to their shrinking, aging customer base.  As one industry wag put it to to me today, “How many more 52 year-olds looking for their first bike can they find?”

As far as Buell contributing much to harley financially, well, that’s just absurd.

In 2008, HD’s annual report states that they sold $313.8m in general merch, making up 5.6% of corporate revenues. Buell Motorcycles, on the other hand, made $123.2m in revenues, or 2.2% of corporate revenues. According to the company 10k statement for 2008, Buell accounted for 4,000 of HD’s 222,200 motorcycle registrations. Of the 686 HD dealerships in 2008, more than half of them don’t even sell Buells.

In other words, Buell accounted for 0.2% of HD motorcycle sales, and the MoCo made twice as much money selling orange dog scarves and rhinestone belts for girls than from the sale of Buell motorcycles.

So, the idea that keeping Buell motorcycles will make up for…well…anything at Harley Davidson is so at variance with the actual facts as to qualify as sheer fantasy. Let’s not pretend that Buell has either the user base or financial performance to rank as a serious part of Harley Davidson.

I guess it does show, though, that some people personalize their motorcycle brand very deeply.

I guess my take-away for those people is that sometimes, when people write negative things about your favorite motorcycle brand, it’s not because they hate it.  Sometimes, they write it because it’s true.

Just something to think about.

In 2008, HD’s annual report states that they sold $313.8m in general merch, making up 5.6% of corporate revenues. Buell Motorcycles, on the other hand, made $123.2m in revenues, or 2.2% of corporate revenues. According to the company 10k statement for 2008, Buell accounted for 4,000 of HD’s 222,200 motorcycle registrations. Of the 686 HD dealerships in 2008, more than half of them don’t even sell Buells.

So, the idea that Buell motorcycles will make up for…well…anything at Harley Davidson is so at variance with the actual facts as to qualify as sheer fantasy. Let’s not pretend that Buell has either the user base or financial performance to rank as a serious part of Harley Davidson.

New Motorcycle Traffic Study Initiated

For the first time since 1981′s Hurt Report, the  Federal Highway Administration is beginning a comprehensive study of traffic safety as it relates to motorcycles.

A significant new motorcycle crash causation study will soon get under way at Oklahoma State University (OSU). Formally announced by the Federal Highway Administration (FHWA) on Oct. 5, the study will give motorcyclists and others concerned with highway safety a fuller picture of how motorcycles fit into today’s traffic mix, a better understanding of what causes motorcycle crashes, and insights into the best strategies to prevent these crashes.

“The announcement that the full study will now begin is great news,” said Ed Moreland, AMA vice president for government relations. “While the study will take years to complete, it promises to offer up information that will allow for the creation of effective countermeasures to make the roads safer for all of us.”

The last major motorcycle crash study, called “Motorcycle Accident Cause Factors and Identification of Countermeasures,” commonly known as the Hurt Report (named after lead researcher Harry Hurt), was published in 1981. It provided a wealth of data that has been used to develop training and strategies to help keep riders safer on the road. In the decades since, the traffic environment has changed enormously, prompting the AMA to begin campaigning for a new study several years ago.

“There is certainly a lot more traffic now than when Harry Hurt and his team did their research,” Moreland said. “SUVs didn’t exist back then, and motorcycles have advanced light years in technology. On top of that, distracted driving poses a significant safety challenge. We will certainly learn a lot from this new study.”

The FHWA is overseeing the OSU project, which will be administered at the Oklahoma Transportation Center, an independent and well-respected research facility in Stillwater.

It will be interesting to see how the changes of the past 28 years will affect the conclusions of the study.

2010 Honda VFR1200F

After months of anticipation, Honda released the images, specifications, and availability details of the new VFR replacement, the VFR1200F.

Let’s start with the pictures.  Shown below is the only version that will appear in the US,with its red livery.  Why the euros get multiple color choices, and we have to be satisfied with a single color is beyond me, but here it is.  Click the thumbnails to enlarge.

I have to say right up front that the looks don’t grab me.  The blunt nose with the odd-shaped headlight just don’t do it for me.  Maybe the look will grow on me, but the first impression doesn’t…impress.

The specs for the bike are more to my liking, and pretty interesting.

First up, it’s a serious step up in power from the current generation VFR.  Honda claims an output of 170HP at 10,000RPM and 95lb-ft of torque at 8,750RPM from the 1237cc V-4 power plant.  However you slice it, those are very respectable numbers, and a big leap from the current VFR.  The engine also sports variable cylinder technology that uses two, three, or four cylinders, depending on throttle input.  The four cylinders are set at different angles, with the rear two cylinders located innermost on the crankshaft and the front cylinders located outboard in order to narrow the rider’s seating position.

The buyer will have a choice of transmissions.   You can choose a standard 6-speed transmission, or spring for the dual-clutch 6-speed transmission, with  a manual mode that shifts via a finger paddle on the handlebars, a la the FJR1300AE, and two automatic options: one for sport, which takes each gear to the redline before shifting, or a short-shifting economy mode. Power gets from the tranny to the rear wheel via a brand new shaft drive system that sports an offset pivot point and sliding constant-velocity joint to eliminate driveline lash.

Rear suspension for the VFR is a Honda Pro Arm® single-sided swingarm with single gas-charged shock with a remote spring preload adjuster, adjustable rebound damping and 5.1 inches of travel.  Front suspension is provided by a 43mm inverted cartridge fork with adjustable spring preload and 4.7 inches of travel.  But not, apparently, rebound damping.  The latter may be a consideration for some.

You may have already noticed the two-tone fairing.  That’s part of Honda’s new air management system. Honda calls this “layered fairing technology”, and explains it as follows:

By effectively increasing the speed of the air by channelling it through smaller apertures before it reaches the radiators, engine cooling is optimized and the hot, exhausted air is channelled away from the rider and passenger for a cooler, more comfortable ride. The heat generated by the powerful, enclosed V4 engine is also channelled away to keep hot air away from the rider.

Apparently, Honda gave some thought to heat management in precisely the way that Yamaha and Kawasaki did not when creating the first gen FJR and Concours14.

Unfortunately, it doesn’t appear they gave as much thought to travel range, with the VFR1200F having only a 4.9 gal tank.  This is a serious deficiency if the VFR is supposed to do any serious touring.  Even worse is the claimed 36.5 MPG fuel efficiency.  Taking Honda’s claims at face value give the VFR1200F a maximum fuel range of 179 miles.  Both the efficiency and range seem a bit low for a bike that uses variable cylinder technology for economy.  In fact, that’s just plain low, no matter what.  This is the biggest disappointment I can see from the claimed specs.  It’s a gas hog with a small tank.  Great.

It’s also a pretty big bike–though significantly smaller than the ST1300–with a curb weight (full of gas and ready to ride) of 591lbs for the standard transmission model and 613 lbs for the super-tranny version.  It’s still lighter than an FJR or Connie, but significantly heavier than most sport bikes.

Bringing all that weight to a stop comes from dual full-floating 320mm discs with CBS six-piston calipers with ABS in front, and a single 276mm disc with CBS two-piston caliper with ABS out back.  Supporting it all is a vacuum-molded, cast aluminum chassis.

And if you want to add a little more weight, there are several accessories for the VFR.  There are fairing extenders to get your hands out of the wind.  Windshield extenders to do the same for your head.  There’s full luggage–albeit somewhat smaller than the usual run of touring bike luggage–for long trips.  There’s even a navigator, so you wont get lost.  For a brand new bike, Honda seems to have really gone all out to provide lots of farkles for it.

So, now we’ve seen the pics, and we’ve read the specs.  And I have just one question about the VFR1200F.

What is it?

Is it a sport bike?  if so it seems awfully big for it. Hustling a 600 lb bike through the twisties can be done, of course, but all that extra weight has inertia to match, which limits its canyon-carving ability.

Is it a touring bike?  Then why is the tank so small, fuel range so compromised, and the luggage so downsized?

Is it a ‘Busa-style superbike?  Then why only 170 horses?  Ultimately, a ‘Busa or ZX-14 will be admiring it in their rear-views.

The more I look at it, the more it seems like a niche bike without a…niche.

I really wanted to be impressed with this bike.  I thought that with all the new technology we’d be getting…I dunno…more.  What it is, though, seems like a bastardized compromise between a sportbike and a sport-tourer that does neither of those things very well.  For a sportbike, I’d want it lighter, with a shorter wheelbase.  For a tourer, I’d want better mileage and range.

Of course, if you want a compromise bike, it seems like the VFR1200F will deliver that in spades.

y effectively increasing the speed of the air by channelling it through smaller apertures before it reaches the radiators, engine cooling is optimized and the hot, exhausted air is channelled away from the rider and passenger for a cooler, more comfortable ride. The heat generated by the powerful, enclosed V4 engine is also channelled away to keep hot air away from the rider.

Buell’s Future Uncertain?

Since Kieth Wandell took over from Jim Ziemer as the CEO of Harley-Davidson, analyst expectections have been that Wandell, an outsider bought in as CEO from Milwaukee-based automotive supplier Johnson Controls, would be a strong, take-charge leader who is well-suited to address the MoCo’s current challenges. One of those challenges may be Erik Buell, and Buell Motorcycles division.  A confidential source with high-level contacts inside Harley-Davidson informs me that a number of H-D executives will be pushing to have the company divest itself of Buell Motorcycles, and that a decision to sell or shut down Buell may come in the near future.

The word is that both Buell and Harley-Davidson have found the relationship unsatisfactory for a number of reasons, including the company’s refusal to allow Buell to outsource anything but Evolution V-Twins for several years, and Erik Buell’s strained personal relations with a number of MoCo executives. With a company outsider who has no particular vested interest taking over the helm as CEO, and devastatingly bad sales results due to the current recession, some Harley executives believe that this would be the perfect time to kill the Buell division.  If so, it would be a sad close to an overall sad chapter at Harley-Davidson.

In my view, Harley’s stewardship of Buell Motorcycles has been a classic case of a missed opportunity. The acquisition of Buell was a great opportunity for the MoCo to develop a line of race-bred sportbikes that could have made Harley a serious contender in that market.  But, Harley-Davidson blew it.

The company’s refusal to allow Buell to use any engine but the air-cooled, V-Twin, Sportster-derived Evolution engine effectively throttled Buell from the very beginning.  Whatever advantages may have accrued from implementing the Buell “trilogy of tech” in a sporting motorcycle were largely negated by the use of the underpowered Evolution powerplant.  Harley seems not to have understood that creating a technically sophisticated sportbike that would get its lunch eaten by any 600cc sportbike produced by the Big Four was nothing but a recipe for failure.

Ironically, elements of the Buell “trilogy of tech”, especially mass centralization and low unsprung weight have shown up in competing sportbikes.  For instance, the 2010 BMW S1000RR utilizes an under-body muffler arrangement very similar to Buell’s.  So, clearly, the problem isn’t Buell’s technology, but rather the use to which it was put, prior to the release of the 1125R in 2008.

Harley also alienated its dealers by forcing them to accept consignments of Buell motorcycles that they didn’t want to sell, and, in many cases, knew they couldn’t sell.  Not only were they being required to sell a sportbike that almost no one wanted–as Buell’s 2% market share of sportbike sales indicates–the MoCo never adequately invested in dealer training, in either the sales or service departments.

This is not to say that Erik Buell has been blameless either.  He is reputed to be abrasive and difficult to work with by many H-D executives.  This has resulted in bad feelings among executives that has made them less likely to give Mr. Buell’s opinions about the direction of Buell Motorcycles any serious consideration.

Moreover, Buell’s  marketing and public relations have been marked by avoidable mistakes.  For instance, the press reveal of the 2008 1125R–the only bike with Buell makes with a non-Sportster powerplant–was a disaster.  Buell used pre-production bikes with faulty fuel management and suspension issues for the demonstrations given to the international motorcycling press.  As a result, the general impression given by the media was of a mediocre bike with poor fueling, wallowy suspension, and quality control issues.   Rather than waiting until the company had ironed out those issues satisfactorily, Buell went ahead with the reveal, which resulted in doing more harm than good to the bike’s image.  Most recently, Buell’s callous dismissal of the Blast model for the 2010 model year, replete with disparaging comments about the bike, alienated many observers–not only in the press, but among Buell’s customer base as well.

If the anti-Buell Harley execs get their way, this long litany of failure will come to an end by pushing Buell out the door.

Dealers Fined

Here in California, there are a few state agencies you really don’t want to cross if you’re a business.  One of them is the State Board of Equalization, the agency that handles sales taxation.  But perhaps even more dreadful is the California Air Resources Board.  Two motorcycle dealerships here in San Diego are learning that the hard way.

GP Motorcycles of San Diego and Moto Forza will each pay $90,000 in fines, according to CARB.

ARB investigators following up on a tip received in 2006 confirmed that GP Motorcycles and Moto Forza were selling Husqvarna off-road motorcycles illegally converted to street-legal models.

According to the ARB, many of the bikes were outfitted with so-called “street legal” kits, which are illegal in California.

California has its own, special environmental requirements that are different from the other 49 states.  That’s the reason why the Versys was initially unavailable in California, and it took an extra year or two get it certified here.  In any event, the penalties don’t just extend to the dealers.  The purchasers have to toe the line as well.

The CARB revoked the registrations for the motorcycles. The owners were told to turn in their license plates and get off-road stickers and plates.

So, they bought what they thought were street legal dual-sports, and now they have to license them for off-road use only.  I suspect that they will be asking for some recompense from GP and Moto Forza.

Interestingly, the dealers are the two local dealers for Italian bikes.

No Smog Testing in California

A bill was wending its way through the California legislature that would mandate regular emissions testing for motorcycles in the state.  Senate Bill 435 proposed to make emissions testing mandatory for motorcycles, on the same basis as cars.

But, the legislature has dropped hearings on it for the 2009 session.  it’s a two-year bill, which means it’s still not dead, and can be resurrected in the 2010 session.  But for now, motorcycle smog checks have been tabled in California.

It’s Official: Harley’s Going to India

There’s been lot’s of buzz about this, but Harley-Davidson has made it official:  The Motor Compnay will expand into india in 2010.  Clearly, they’re hoping to recoup some of their losses from the disastrous decline of sales in the the US Motorcycle market.  According to HD’s press release:

“India is important to our long-term vision of being a truly global company,” said Harley-Davidson Inc. President and Chief Executive Officer Keith Wandell. “We are committed to India for the long term, and we are focused right now on establishing a strong foundation.”

India is the second-largest motorcycle market in the world, with sales dominated by small, inexpensive bikes used as basic transportation. However, India’s rapidly growing economy, rising middle class and significant investment in construction of new highways have opened the door to leisure motorcycle riding.

Whether it will have opened the door wide enough for Harley to make some sales there is still an open question, since the move is not without risk.

First, despite its recent economic growth, India is a desperately poor country.  To the extent that more people can afford to ride motorcycles there, they are riding inexpensive, sub 650cc bikes, not large, expensive Harley-Davidsons.  As I’ve mentioned before, Harley simply doesn’t have a motorcycle that can fit the bill for a developing country, namely a small, inexpensive motorcycle.

On top of that, India is a severely protectionist country, with a 105% import duty on motorcycles.  That means a $10,000 Sportster becomes a $20,000 Sportster in India.  I’m not sure how many units they’re going to sell in a country where the annual average income is $1,100.

Third, India, being a desperately poor country, has an infrastructure to match, i.e., roads in horrifically bad repair, which are not the best placed to be ploughing along on a 600-pound+ motorcycle.

Harley’s main competitor there will also be homegrown firms like India’s Royal Enfield motorcycles, who make little 125cc and 250cc thumpers.  Royal Enfield has, in fact, done very well, and has seen huge sales growth in India.

But, then again, they aren’t asking people to give them 20 years worth of income for a motorcycle.

One also notes that Suzuki and honda are already in India.  The difference being that they are both manufacturing motorcycles there, and thus avoiding import duties.  They are also concentrating on entry level (sub 125cc) motorcycles, and standard 125cc-250cc motorcycles.  Suzuki recently announced that their entry-level motorcycle operations are expected to break even this year.