Interesting info knowsalot. In this area, there is only one dealer (Suzuki dealer) that only carries one brand. The rest all have two or more brands under their roof. The biggest dealer in the area (called Honda East) carries, Honda, Suzuki, Polaris, Bombardier, Kawasaki,and Yamaha. I doubt they would give up all of the other dealerships just to keep honda, but who knows. Keep us up to date.

 

Sounds like honda is taking the easy way out instead of making better machines....i dont see how this would help there atvs..

 

Ok I see a bunch of anti's, let me throw out some pro's.

1. A Honda specialist/salesperson/techician will do a better job if he doesn't have to figure out 150 different bikes, just 20-30 or so. Ask me, I've been there. He who pretends to know all really doesn't. It takes seat time, book study, and manual time. All precious commodities in the retail market.

I agree that most multi-brand stores would tell Honda to "pound sand" if the idea was forced.
dealer franchise laws in each state are there to protect them against tactics like that.

2. Dealer profits could be driven down because of competition in the same store. You buy the quad cheaper because of competition within a store for your dollars. Wait isn't that good? Not necessarily. If prices are driven down manufacturers lose money. They make less, and so the first thing typically to go is future developments and research, while they focus on "current product." Manufacturers and dealers need to make a decent profit so they can afford to invest more, and trust me, those portions of the company just wanting to develop technology have a hard sell when the bean counters say "but prices are so low, how could we make money with all the investment we'd have to make in new technology?" So you get to complain about not having all the goodies that you see on other machines. you win, but you lose too.

Here's an example. Take a Lexus and set it next to Saturn, and try to sell the customer on the benefits of a Lexus. superior features and design, against a cheaper design car with loads less technology. Both look similar, they both have engines, but unless you truly understand the inner workings you have a hard time selling the Lexus to the average consumer who's looking to save a buck, they just don't see the benefit. So now you're a ATV dealer, with three bosses, each of them telling you what to do. Are you really going to tell all, knowing that the factory rep will hear what you say, or just offer basic features of each and let the customer figure it out? If an easier sell can be made on a cheaper product with potentially more profit involved why would I push advantages of other products if it costs me money? Not to say Honda is all superior, but they have several key features that make their longevity and durability possible.

3. Honda exclusive stores would be backed by Honda's multimillion dollar financing, financial history and credit rating, which allows some special deals, and the F&I writer wouldn't have to figure out 2 or 3 different contracts/promotions and each of their fine points, just one. Hence, you get someone who knows as much as possible about 1 contract, a "specialist"

4. Honda reps wouldn't have to nullify Honda's strong selling points as much, when multi-brand stores have to please 3 masters. They can't tell you brand X has a problem, because they sell brand X. Brand X is not going to be happy if they find out you're dinging brand x.

Believe it or not, honda does a good job of building decent bikes. I'd owned several, abused extensively some in my early days, and they still run as expected. Trust me when I say Honda's spent millions looking at the current market, and counted all the beans. When established markets exist for a product, they'll bring it to consumers. I would love to see a 600ex, or 500r 450ex or whatever quad. I'm sure they've built prototypes like that for a while. But looking at the costs to bring a product to market, it's tons of money, literally. Now we are in a soft atv market, somewhat of a slump, and that's can't be fixed merely by throwing new product or features out there, people have to be willing to pay x dollars in x numbers to make it viable.

5. We've always wanted lighter, faster, better machines, and the technology exists to make the best possible machines that would blow away everything currently on the market, but are we willing to pay 10,000 more for a quad? I think not. That's why modifiers are in such demand. "We" want better. Competition drives prices down, so a $14,000 factory quad becomes less realistic. You lose because you don't see the value, or at least all the other people who just want to ride and know little about technology don't see the value. Honda could put a 120 hp motor in a quad, but then someone would kill themselves and sue the manufacturer for making so powerful a quad. Let us not forget the past when 12 year old kids were riding race 250r's and getting hurt. Manufacturers were sued, and the atv market dwindled under intense federal pressure. I hate this about our country, but that is life. We take little responsibility for our own actions, seemingly always prefering to find someone else to blame. hot coffee too hot? sue. kill a kid on a race bike? well the manufacturer should have made it safer, so sue them. manufacturers pay these off easily just to avoid the headaches, media response, and legal costs to fight them. Who pays in the end? Us.

That being said as the "pro's" I too like going into a store with all different types of quads, but when I want experts, I sure don't ask them. I go find a specialist.
nuff said.

 

sh:t! you wrote a book! all honda dealers around here are honda's only, so the inforcement (if made) wouldn't influence me at all.

 

Hate to be a pain on this one but some of you Pro's don't add up to much.

1. I sold multi line Boats in SoCal and had no problem selling one over the other. That's from a 18' open bow up to and including Offshore Boats. (Wellcraft and Scarabs) Product information is only 10% of any sale, although you need to know 100% of it. I have also sold lots of boats with little information on them. The customer will tell you what he want to do and how much he wants to pay. The salesman job is to find it, sell it, delever it. As far as service, Most of the work they performe is general maintance, Around me anyway. They can all rebuild motors, jet, so on and so on.

2. The dealerships I've worked at (alot of them) the Sales dept is set up to generate profit, where the overhead is covered by sales in the parts and service depts. So that kills point 2, dealerships could give them away at cost and still make money. On top of that the manufactures that I dealt with where always calling with the "you take 15 of these and you can have them for $X." Thereby allowing for higher profits on said units.

3. As a F&I guy I don't care about backed by a Multi million dollar crap. All I want to know is who is buying the contract, what the rate is and how much "Am I Making on it". That kills three pretty much.

4. The reps who cares what they say, they are there to get the product in the door and handle any problems. The ones I know stay pretty nuetral, they may want to work for the other guy one day, seen that one a few times.

5. Cannondale is doing just that, Price doesn't sell anything. If I told you I had a house for sale for $1,000,000 would you buy it? No, what if I told you in was on a gold mine that produces $500,000 profit a year? Than you would buy it. Features and Benifits sell products not the price.

Tried not to sound like an know it all but your PRO'S are only concederations.

Just my thoughts.

Smitty

 

Yea that makes sense to wait and see what happends with ford legally. If its all kosher the Honda malls sound like a great idea. The snowmobiles probably are a good idea but yeah again i couldnt see any dealers in miami stocking up on them but up north if i were looking to buy a snowmobile i would definetly buy a honda instead of an artic cat or something along the lines of that.

 

Smitty, I think you're missing the point. I know the dealers will survive, but thin margins on product sales mean manufacturers don't spend big $ on R&D. Believe it or not, manufacturers make their money on manufacturing, not on the labor/service side. Dealers make a lot more profit from the sale than manufacturers do. Replacement parts are a profit center too, but only if you can get the sale. Here's an example: One of the biggest motorcycle stores in CA is a multibrand store, and they carry almost everything. How many times have they offered me OEM parts? literally none. They make more profit off of aftermarket stuff than the OEM. And they're not the only one.

I also disagree on the 10% theory. If you only spend 10% of the time doing the presentation then you aren't selling value. Market research shows that if you meet a customer's needs and go beyond you sell more product and make more money because people see the value.

It makes more profit for manufacturers who can keep their stores all home brand, because all that store's sales benefit them. The best they can hope for in multi brand stores is that the dealer will make as much off the sale of their product as their competitors.

I stand by my statements as they were from the supplier side, not retail side.

 

LT500,

I always try to miss the POINT those things are shape and hurt.LOL

I can see that from a manufactures POINT, that it would be better for them to have a mega store. But from a dealer or consumer I don't think it benifits them. When I bought my 400ex it was a Honda only store. Had to get in the race truck and run all over to look at the other quads. What a pain. I agree that the manufactures only make money off the manufacuring and selling of product but no ones what the real profit off these things outside of the co. that makes them. If they want to continue to sell they will continue to R&D. I think you missed the SCALE of thing. When I go to have one of my products made I get 25-50 made, that's one price, If I called and ordered 250,000 of them it goes way, way down. 250,000 close to the amount that honda did in sales last year of quads alone.

Dealer profit has to many variable to worry about. The biggest variable is the salesman. I have always sold what I thougt was best for the customer, I always tried to keep my personal bias out of it. Other salesmen I know only sell what they can make the most money on. Same in the parts side, they will sell what makes them the most money, unless the customer ask for Honda part, I sold OEM car parts and the dealers could charge the same and make more money on each part. Same with after market.

Things may have changed but out of all the Sales Classes I've been to in the last 15 years All of the instructors with all of their satistics claim that product knowledge is 10% of any sale the 90% is with product Demo, Features and Benifits, Service after the sale, you know the rest of the sales process.

You're right in that the benifit would be to the manufacture, I think it won't matter in the long run. Honda, Yamaha, and the rest will still be here. One reason BRAND LOYALTY, I have switched die hards from one product to anyother with little problems. Mercruiser to VolvoPenta.

I see that you live pretty close to me, what are you riding and where?

To give you a little background on my expeirances.

Top Salesman Dodge dealership 3 outta six months mid 80's k-cars what a joke.
Closer Dodge dealership second best, their is always someone better.
2.6 million dollars in retail boat sales in 8 months. Followed with 2.8 million next season.
Sold Jewlery, steak and seafood, haircare products, Insurance, and anything else that held still long enough.

Sold myself to the wife she was a buyer.LOL

That's some of the reasons for my statements, the consumer and dealership may not benifit by this action, but the manufactures will.

Smitty

 

Well, there is ALOT more to the proposed action than what I posted because it would probally set a record as being the longest and most boring post of all time.

One other big detail that I left out was the allocation changes if this goes into effect.

A Honda dealer would be REQUIRED to keep at least one of every model and in every color. This comes to over 40 ATVs and over 90 motorcycles and over 12 scooters....That's 142 units!!!! The majority of dealers don't have anywhere near that amount of space available for storage of such an amount.

Also part of the plan is that AUTOMATIC re-ordering goes into place after a unit sells. Lets say your dealer sells a 2002 Green ForemanES....as soon as the warranty registration is received by Honda, another green model goes to the dealer whether he wants it or not. This may be good in some cases, but what if the dealer had a hard enough time selling the green model and the 2003 models were coming out in just 3 months??? What if he had to discount it by large ammounts to move it after the 2003 models arrive??

The dealer cost of the machines will stay the same, and Honda is in complete control of your inventory. The dealer would become a slave to Honda...there's no other way to describe it.

As part of the "proposal", Honda would aid in financing for dealers who would struggle with this plan, including new facilitys and warehouse space......but for a huge finance charge ofcourse.

Most deealers will not sign into such agreements, especially the longtime dealers who are established, and spent that time paying for the place when they initially became setup. They aren't going to sign into something that will leave them paying for it through retirement or risk not getting full amount when it comes to selling time.

I could go on for days about all this crap.

I don't look for it to go through unless they make their decision alone and without further input from dealers. I haven't spoken to the first dealer who is in favor of this idea.

 

The whole idea seems completely stupid. the only way the consumers benifit is with the dealer having to have each model in stock with every color. but in the long run it would hurt since thier probably wouldn't be many Honda dealers around. Many of the small dealers will have to drop hondas since they cant probably keep anywhere near that many models.