PowerSports Business

March 13, 2017

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www.PowersportsBusiness.com NEWS Powersports Business • March 13, 2017 • 7 U.S. trade representative's plan would harm U.S. consumers A proposed 100 percent tariff on European motorcycles would harm U.S. consumers by pricing affected models beyond the reach of American families, American Motorcyclist Association president and CEO Rob Dingman told a federal trade committee in February. Dingman said motorcycles should be removed from the list of products included in the proposed tariff. "Many of the European-produced motor- cycles in the affected categories are available at reasonable prices that allow for entire families to enjoy countless hours together outdoors, strengthening the family unit," Dingman said during a public hearing of the Office of the U.S. Trade Representative's Section 301 Committee. "A tariff that threatens to significantly raise the retail cost of these motorcycles or curtail their supply holds the potential to cause irreversible damage to outdoor recreation and the families that participate in it." The Office of the U.S. Trade Representative proposed the tariff on 51cc to 500cc motor- cycles imported from Europe as part of its ongoing battle with the European Union over U.S. beef raised using hormones. The EU will not accept the beef, so the Trade Representative is seeking leverage in negotiations. The tariff would affect motorcycles with engines displacing 51cc to 500cc from Aprilia, Beta, BMW, Ducati, Fantic, Gas Gas, Husqvarna, KTM, Montesa, Piaggio, Scorpa, Sherco, TM and Vespa. There is no direct connection between motorcycles and the EU's ban on the importing of U.S. beef products treated with hormones. The lack of an agricultural tie between the two products runs counter to sound trade policy, Dingman told the committee. "American motorcyclists are unnecessarily caught in the crossfire of this completely unre- lated trade dispute," Dingman said. "Since my organization represents motorcycle-riding con- sumers, I can objectively, and without vested commercial interest, assure you that this action will do more to harm individual Americans than it will to leverage the European Union." Motorcyclists sent more than 10,300 emails to Congress on this issue, posted more than 9,400 comments to Regulations.gov, and sent nearly 5,300 emails to President Donald Trump. Of the comments submitted via Regulations. gov, 82 percent came from motorcyclists. European makers of 51cc-399cc motor- cycles used for racing provide nearly half the units available to U.S. consumers, and nearly a quarter of the market in the 400-500cc class. There are no significant U.S.-made options for consumers in those market segments. In the on-road motorcycle segment, 100 percent of the models 300cc and smaller are imported to the United States from abroad. The Office of the U.S. Trade Representative tried this same tactic in 1998 and 2008, but the efforts were thwarted when the AMA, the Motorcycle Industry Council and bike manu- facturers and retailers rallied motorcyclists against the plan. At that time, the U.S. Trade Representative instead raised the tariff on a variety of European food products. Others testifying against the tariff included C.R. Gittere, president of Powersports Data Solutions; Iain McPhie and Ritchie Thomas of Squire Patton Boggs; John Hinz, president of KTM North America Inc. and Husqvarna Motorcycles North America Inc.; Mario di Maria, president and CEO of Piaggio Group Americas Inc.; Rick Alcon, owner of R&S Pow- ersports Group; Tim Cotter, vice president of MX Sports; and Tim Buche, president and CEO of the Motorcycle Industry Council. PSB AMA CEO Dingman testifies against proposed bike tariff The industry was well represented at federal trade committee meeting to discuss the proposed 100 percent tariff on European motorcycles: (Front row, left) Tim Cotter, vice president of MX Sports; Rob Dingman, president and CEO of the American Motorcyclist Association; John Hinz, president of KTM North America Inc. and Husqvarna Motorcycles North America Inc.; Tim Buche, president and CEO of the Motorcycle Industry Council; Iain R. McPhie of Squire Patton Boggs; and Mario Di Maria, president and CEO of Piaggio Group Americas Inc. (Back) Rick Alcon, owner of R&S Powersports Group; and Carroll "C.R." Gittere, president of Powersports Data Solutions. Rocky dealers in attendance an ideal setting. That Tucker even opted to bring in dealers for the show was a big step forward for many dealers we talked to. "It's great that Tucker is back doing a show — and it did not disappoint," said Chris Jones, president of Iron Pony Motorsports Group, Inc., with two powersports dealerships in the Columbus, Ohio, area. "They went above and beyond on food and entertainment for their dealers. We had enough time to interact with many vendors and learned about a variety of new products that will immediately increase sales in our dealership and e-commerce." Jones has been a longtime customer of Tucker's, dating back to almost the entire 50 years of the company's history. "That was back when it used to be Ed Tucker — and their competitor, Rocky Cycle," Jones recalled. "So it was fantastic to see so many great Tucker employees and so many great vendors and vendor representatives. The timing of the show was good — just in time for the upcoming season. Our Tucker sales repre- sentative was extremely helpful with his time as were his regional managers. Tucker had good deals for those who attended — and topped it off with an Ogio Tucker 50th anniversary back- pack for each dealer that made the trip." Matt Maschmann, general manager of Power 50 dealership Maxim Honda Yamaha in nearby Allen, took an extended lunch break to check out the new vendor offerings. Even bet- ter, the proxemics allowed him to send his staff to the show also. "It's great to have the Tucker show in my backyard," Maschmann said. "We really benefit from that because we send all of our parts and service employees to it. It makes them feel good to go, and they get to see a lot of neat stuff that opens their mind. A happy employee is a good employee. I think they did a very good job of timing because it's right before the spring kicks, so we can all order our programs now, and they come in when we need them." Maschmann found the lineup of 2017 parts and accessories from Tucker Rocky vendors intriguing, and even made a point to add about half dozen new products to the store that he saw at the show. "We feel like that's very important — to have new stuff in the store. The customer does not want to come in and see the same old things all the time. All the programs at the show were very aggressive, and we got some very good margins on the product. That will help us deal with online shopping much easier." Even better, Maschmann liked the enthusi- asm his parts staff brought back from the show. "All of our parts personnel came back with their own ideas on different things to sell, so we would order their products to see how it works," he said. "And you know if they sug- gested it, they will push it and sell it." Steve St. John, owner of Dreyer South Pow- ersports in Whiteland, Indiana, found the show to be an ideal time to create and build on rela- tionships with vendors and Tucker staff. "The vendors did a good job of presenting their products or services," St. John said. "Lots of shows have those who would rather not be there. Overall it was an uplifting and encour- aging show. Coming back I was energized for business. As a business I think that sometimes we try to be too many things with too many products to the customers. This show gives us an opportunity to engage companies and find a better fit for our stores to maximize profits and improve customer satisfaction. I did enjoy the show and feel that we benefitted from attend- ing. And we took advantage of several of the deals that were presented." PSB RK Excel was among those happy to see an enthusi- astic dealer turnout the Tucker Rocky | Biker's Choice Dealer and Brand Expo. growth in that segment in 2016. The slight growth in the powersports industry "was not as strong as we had hoped for 2016," Boderman said. "For 2017 we are thinking a slow recovery again, with ultimately all the fundamentals being right in place. We're planning on the powersports industry being low single digits growth, and we would be outpacing it, espe- cially with motorcycle and side-by-side, again this year." ATV sales remain about one-third of Ameri- can Honda's business, with the Rancher 420 remaining the best seller. Boderman reports that the side-by-side market is approaching 25 percent of American Honda's business portfolio. "We'll be approaching a 1:1 ratio over the course of the next couple of years between ATV and side-by-side while maintaining a bal- anced sales mix between motorcycle and ORV," Boderman said. The motorcycle side has benefitted from the Africa Twin, and the popular adventure segment will get another boost from the 2017 CRF250L Rally model, releasing this spring. Share gains have also been made in the on- road 300-650cc class that targets entry-level riders. New 300 and 500 class Rebels will be coming to market soon as well to add strength to this mix. Additionally, the January release of the CRF450R and RX has seen those bikes "knocking it out of the park," Boderman added. PSB TUCKER ROCKY CONTINUED FROM COVER Go to the Powersports Business YouTube channel to watch a video from the show floor of the Tucker Rocky | Biker's Choice Dealer and Brand Expo in Frisco, Texas. HONDA CONTINUED FROM PAGE 6

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