Wake up call for the Big 4 ATV Manufacturers
#21
12-02-2006, 10:05 PM
Wake up call for the Big 4 ATV Manufacturers
Originally posted by: IceBurg
This post is purely just for venting, and making a strategic business observation that I have as an ATV consumer.
I think the Big 4 have their heads stuck very deep in the proverbial sand with regards to Chinese competition. The Big 4 all have very good products, very good brands, and profitable businesses. Therein lies the problem--very profitable businesses. That means major sticker shock for all us consumers--like paying $2500-$3000 for an entry level kids ATV. That's just ludicrous. Talk about major sticker shock!! When a kids ATV costs as much as an ok used car, something is wrong. So what happens? The Chinese invade the market with cheap products that have little to no reliability. The Big 4 don't care, because the products suck, and they're not worried. So they keep prices high, margins fat, and stick their heads in the sand.
So what? The Big 4 are stupid, and they're ignoring decades of business history that says that they are going to get killed in just a few years. They might as well kiss their profitable businesses goodbye right now. Just like with the US car makers and the Japanese in the 70's, just like the Xerox and the Japanese copier makers in the 80's and 90's, the Big 4 are going to get killed. Why? Because they price their products so high, it gives the Chinese tons of room to come in at the low price range, and gain experience, build sales channels, build brands, make money, and then plow that money back into R&D to make a better ATV. Then the cycle starts all over again. There are many, many examples of this business model over the past 2-3 decades. I'm not making any of this up! This is already starting to happen with Eton, for example.
So, Big 4, surely many of you with your top-tier MBA's took the same classes and read the same case studies that I did. Wake up! Why would I EVER buy a low-reliability Chinese ATV if I could buy a reasonably priced ATV from you?? I wouldn't! No one would! You guys need to lose money on your lower-end models in order to keep the low priced competition out of the market or not making any money, at least. And then lower your margins overall, in order to keep your business alive long term. And start making your ATV's in China! I don't care if Polaris makes its great quality machine in China, especially if its 25%-50% cheaper. A Polaris is a Polaris, and Polaris will maintain its quality to maintain its brand. I don't care where its built (some may disagree, but that's how I feel). Its basic economics, guys: high economic profits mean increased competition and lost market share and lower profits in the medium to long run. Once the Chinese have built their brands and businesses here, AND they have a huge cost advantage, its over for you.
So start selling great ATV's at lower prices!!!!!
This post is purely just for venting, and making a strategic business observation that I have as an ATV consumer.
I think the Big 4 have their heads stuck very deep in the proverbial sand with regards to Chinese competition. The Big 4 all have very good products, very good brands, and profitable businesses. Therein lies the problem--very profitable businesses. That means major sticker shock for all us consumers--like paying $2500-$3000 for an entry level kids ATV. That's just ludicrous. Talk about major sticker shock!! When a kids ATV costs as much as an ok used car, something is wrong. So what happens? The Chinese invade the market with cheap products that have little to no reliability. The Big 4 don't care, because the products suck, and they're not worried. So they keep prices high, margins fat, and stick their heads in the sand.
So what? The Big 4 are stupid, and they're ignoring decades of business history that says that they are going to get killed in just a few years. They might as well kiss their profitable businesses goodbye right now. Just like with the US car makers and the Japanese in the 70's, just like the Xerox and the Japanese copier makers in the 80's and 90's, the Big 4 are going to get killed. Why? Because they price their products so high, it gives the Chinese tons of room to come in at the low price range, and gain experience, build sales channels, build brands, make money, and then plow that money back into R&D to make a better ATV. Then the cycle starts all over again. There are many, many examples of this business model over the past 2-3 decades. I'm not making any of this up! This is already starting to happen with Eton, for example.
So, Big 4, surely many of you with your top-tier MBA's took the same classes and read the same case studies that I did. Wake up! Why would I EVER buy a low-reliability Chinese ATV if I could buy a reasonably priced ATV from you?? I wouldn't! No one would! You guys need to lose money on your lower-end models in order to keep the low priced competition out of the market or not making any money, at least. And then lower your margins overall, in order to keep your business alive long term. And start making your ATV's in China! I don't care if Polaris makes its great quality machine in China, especially if its 25%-50% cheaper. A Polaris is a Polaris, and Polaris will maintain its quality to maintain its brand. I don't care where its built (some may disagree, but that's how I feel). Its basic economics, guys: high economic profits mean increased competition and lost market share and lower profits in the medium to long run. Once the Chinese have built their brands and businesses here, AND they have a huge cost advantage, its over for you.
So start selling great ATV's at lower prices!!!!!
I agree the prices are insane, but you know what? People are buying them at a record pace and until that stops or even slows we won't see much of a price rollback anytime soon.
Personally I think they are overextending their reach into the market with too many variations of the same or similar machines (very evident in the ute world) in which case they will eventually be forced to eliminate machines, and then you will see prices at least stop increasing. It will take the technology to level out a bit too.
#22
12-02-2006, 10:40 PM
Wake up call for the Big 4 ATV Manufacturers
Originally posted by: ss97
There was already talk this year about a Ford/GM merger, but it was shot down. I don't think it will happen, I think Ford, GM and DC will stay the big three and I think that will be it. What will happen is that they just won't be as BIG as they are now. They will need to downsize and retool and become more user specific.
Originally posted by: dirthead
The "big 4" need to wake up but its not because of the low budget Chiness imports, its because of companies like Polaris, Can-Am, AC, KTM, etc. These companies will be the ones taking market share from the Japeness 4, not some knock off import company from China that reverse engineers a bike and then rebuilds one with cheap and inferior parts.
Almost 20 years ago people were making similiar predictions about the Korean auto manufactures about how they would steal market share from Japeness auto makers, but to date that has not been a real issue. Until quality control becomes a concern for the chiness and korean companies they will not make a signifigant dent in the market.
Also, here is my prediction for the auto-makers. To survive and be prosperous you will see Ford and GM merge within the next 3-8 years, I believe they will become one company.......hmm, will it be GMord or ForGM.....then I can go and buy my brand new E85 hybrid the Silverado F-150 and park it next to my Maltarus (malibu + taurus). I can't wait for this to happen as it will make the NASCAR crowd nuts.
The "big 4" need to wake up but its not because of the low budget Chiness imports, its because of companies like Polaris, Can-Am, AC, KTM, etc. These companies will be the ones taking market share from the Japeness 4, not some knock off import company from China that reverse engineers a bike and then rebuilds one with cheap and inferior parts.
Almost 20 years ago people were making similiar predictions about the Korean auto manufactures about how they would steal market share from Japeness auto makers, but to date that has not been a real issue. Until quality control becomes a concern for the chiness and korean companies they will not make a signifigant dent in the market.
Also, here is my prediction for the auto-makers. To survive and be prosperous you will see Ford and GM merge within the next 3-8 years, I believe they will become one company.......hmm, will it be GMord or ForGM.....then I can go and buy my brand new E85 hybrid the Silverado F-150 and park it next to my Maltarus (malibu + taurus). I can't wait for this to happen as it will make the NASCAR crowd nuts.
#23
12-03-2006, 01:09 AM
Wake up call for the Big 4 ATV Manufacturers
georged - "Blind patriot talk"....WTF are you talking about....in my post I merely expressed my opinion that the chiness/korean/taiwan quads are of lesser quality then the japeness 4 and that the real competition for the japeness will come from the other power sports manufactures like AC, Can-Am, Polaris, etc. I had a side comment about ford and gm merging in the future and you take that as "blind patriot talk", or was it my comment about korean cars not being of equal quality as the japeness auto makers, that is a fact if you have a problem with that then maybe you need to look past the kia parked in your garage and do some research.
One last thing, I am a patriot but not blind, I own/have owned cars from toyoto, mazda, and honda. If you would take a second and look at my signature you would see that I own 3 quads from japeness manufactures, if I was your "blind patriot" there would be nothing but Polaris there (and yes I know Polaris uses fuji motors, and now a KTM motor).
One last thing, I am a patriot but not blind, I own/have owned cars from toyoto, mazda, and honda. If you would take a second and look at my signature you would see that I own 3 quads from japeness manufactures, if I was your "blind patriot" there would be nothing but Polaris there (and yes I know Polaris uses fuji motors, and now a KTM motor).
#24
12-03-2006, 09:46 AM
Wake up call for the Big 4 ATV Manufacturers
Originally posted by: dirthead
georged - "Blind patriot talk"....WTF are you talking about....in my post I merely expressed my opinion that the chiness/korean/taiwan quads are of lesser quality then the japeness 4 and that the real competition for the japeness will come from the other power sports manufactures like AC, Can-Am, Polaris, etc. I had a side comment about ford and gm merging in the future and you take that as "blind patriot talk", or was it my comment about korean cars not being of equal quality as the japeness auto makers, that is a fact if you have a problem with that then maybe you need to look past the kia parked in your garage and do some research.
One last thing, I am a patriot but not blind, I own/have owned cars from toyoto, mazda, and honda. If you would take a second and look at my signature you would see that I own 3 quads from japeness manufactures, if I was your "blind patriot" there would be nothing but Polaris there (and yes I know Polaris uses fuji motors, and now a KTM motor).
georged - "Blind patriot talk"....WTF are you talking about....in my post I merely expressed my opinion that the chiness/korean/taiwan quads are of lesser quality then the japeness 4 and that the real competition for the japeness will come from the other power sports manufactures like AC, Can-Am, Polaris, etc. I had a side comment about ford and gm merging in the future and you take that as "blind patriot talk", or was it my comment about korean cars not being of equal quality as the japeness auto makers, that is a fact if you have a problem with that then maybe you need to look past the kia parked in your garage and do some research.
One last thing, I am a patriot but not blind, I own/have owned cars from toyoto, mazda, and honda. If you would take a second and look at my signature you would see that I own 3 quads from japeness manufactures, if I was your "blind patriot" there would be nothing but Polaris there (and yes I know Polaris uses fuji motors, and now a KTM motor).
#25
12-03-2006, 08:09 PM
Wake up call for the Big 4 ATV Manufacturers
Interesting thread. I do believe the Chinese will improve their products, but maybe not to the extent we will abandon Honda, Polaris, et al to embrace change. I shopped for an ATV a few years back, and looked exclusively at Honda, because they made what I wanted, period. I bought a new Toyota this summer because a: I liked the car; b: Nothing the big three made appealed to me; and c: I knew the resale would be better in five years because of those little ellipses Toyota puts on the grille. I think the Hyundai product is probably close in quality, but their resale value just isn't there, at least not yet.
Another two cents gone,
Another two cents gone,
#26
12-03-2006, 10:43 PM
Wake up call for the Big 4 ATV Manufacturers
Originally posted by: Chilly
Interesting thread. I do believe the Chinese will improve their products, but maybe not to the extent we will abandon Honda, Polaris, et al to embrace change. I shopped for an ATV a few years back, and looked exclusively at Honda, because they made what I wanted, period. I bought a new Toyota this summer because a: I liked the car; b: Nothing the big three made appealed to me; and c: I knew the resale would be better in five years because of those little ellipses Toyota puts on the grille. I think the Hyundai product is probably close in quality, but their resale value just isn't there, at least not yet.
Another two cents gone,
Interesting thread. I do believe the Chinese will improve their products, but maybe not to the extent we will abandon Honda, Polaris, et al to embrace change. I shopped for an ATV a few years back, and looked exclusively at Honda, because they made what I wanted, period. I bought a new Toyota this summer because a: I liked the car; b: Nothing the big three made appealed to me; and c: I knew the resale would be better in five years because of those little ellipses Toyota puts on the grille. I think the Hyundai product is probably close in quality, but their resale value just isn't there, at least not yet.
Another two cents gone,
#27
12-05-2006, 09:31 AM
Supersock
Hired Gun!
"Badges? We don't need no stinkin' badges!"
Hired Gun!
"Badges? We don't need no stinkin' badges!"
Wake up call for the Big 4 ATV Manufacturers
What I see ahead isn't the big 4 dropping their prices. It's the Chinese imports improving quality (not all makers) and realizing, that in the US market, they can charge more. Look at the big 3 from Taiwan (Her-Chee, Kymco and Sym). Their models aren't much cheaper than the comparable ones from the big 4.
#29
12-05-2006, 12:21 PM
Wake up call for the Big 4 ATV Manufacturers
Originally posted by: squeege
China= quality .......LOL!
China= quality .......LOL!
Chinese ATVs at the youth level are considered a throw-away toy fill product for manufacturer capacity and if market demand suggests higher product quality with a higher retail price that provides acceptable manufacturing ROI, quality will be upgraded.
#30
12-05-2006, 03:01 PM
Wake up call for the Big 4 ATV Manufacturers
Originally posted by: georged
Ever buy high-end cameras, optics, plumbing fixtures, computers or just about any high-volume consumer product you can think of? All made or assembled in China.
Chinese ATVs at the youth level are considered a throw-away toy fill product for manufacturer capacity and if market demand suggests higher product quality with a higher retail price that provides acceptable manufacturing ROI, quality will be upgraded.
Originally posted by: squeege
China= quality .......LOL!
China= quality .......LOL!
Chinese ATVs at the youth level are considered a throw-away toy fill product for manufacturer capacity and if market demand suggests higher product quality with a higher retail price that provides acceptable manufacturing ROI, quality will be upgraded.