Try Germany and a very small house in the middle of nowhere.

 

I must take exception. The so called big four already face a great deal of competition from AC, Bombardier, and Polaris. The last time I saw figures I think Polaris was number 2. Therefore their profit margins are not obscene as suggested. Honda is struggling to stay competitive and has resorted to hanging onto older technology and running unchanged for several years in many models to keep development cost down, and selling because of "reliability" reputation. Kawi is also struggling and to keep costs down are going with "bare minimums" and often sell just because of low cost. Yamaha and Bombardier seem to be the only mfgs who have enough high demand products to keep profits up where they belong.
Without adequate profits there is no opportunity for development and that is what drives the demand for Yam and Bomb products.
Manufacturing has always been lured to low cost areas and it probably always will. Hondas are being build all over the world. So obscene profits are not any issue what-so-ever. This is an overly simplified dramatization of a very complex world wide dynamic.

 

Originally posted by georged: The US ATV industry will eventually face those same problems due to their inability to meet competitive costs in the global marketplace.


I'm not sure that is true....The US dollar is falling, and I believe it will continue to fall for some time. This will cause imports to rise in cost, and exports will be cheaper.

In fact, there are some people that believe that the dollar is set to implode within 2 - 3 years, and will cause us to form a "North American Currency" amoungst the US, Canada, and Mexico. These same people believe that within a decade we will have formed a "North American Union" much like Europe.

 

If the US had anything to export. Our trade imbalance circumstance was initially prompted by high US operating costs on goods while service exports (technology, etc.) remained desirable. Over the past decade our goods quality has dropped due to antiquated factories with poor quality control while operating costs remain high and we've fallen probably five years behind technology in Japan, S. Korea and other Asian nations. Aside from Boeing, our largest exporter (who is having much of the 787 produced in Japan by Japanese 'partners'), many of our exports are tied to treaty and trade agreements with allied nations. At this point we're not exactly hero country of the world, more like scum to many, so other than military equipment (subsized by US taxpayers) what the future brings for those contracts remains to be seen.

The Euro is now at about 25% distribution compared to USD in a few short years. In three years the new Gulf currency will debut, forcing oil exchanges in that currency and Euros. In 2-3 years (perhaps sooner) China will allow additional float to the Yuan to further develop fresh equity and bond markets, US and European banks are already in the process of setting up in China and all oil producing nations are already accepting some Euros for oil, Russia in particular. Regardless of how one views the USD, the day of the petrodollar, all that keeps the US financially afloat, will come to a close.

 

Yes many high quality technical products are made in China, but they're designed elsewhere.

Polaris and AC already import chinese or korean machines and rebadge them as their own. (Phoenix, DVX 250) And they're junk if you haven't noticed. Some are decent, but the vast majority of the lawnmowers with plastics that Iceburg has so graciously called atvs serve the same purpose that the cheap go-karts and mini bikes have served for the last 10 years at your local hardware store. They're cheap entertainment and maybe even a replacement for baby's first motorbike/atv.

Here's the question, how many atvs do you buy a child? 1, maybe 2 and that's only if you start real small. Kids will grow out of the bikes and be looking for 250's and up in just a few years and the big 4 as we seem to be calling them will have their profit margins back.

It should also be noted that MSRP on a big 4 mini is not written in stone. Often you can get very large discounts, discounts by percentage that just don't happen with the cheaper asian offerings. It's the old salesman addage; if you charge 8 dollars you'll sell a few. If you raise the price to 20 dollars, then discount them down to 10 they'll sell like hotcakes.

 

What I have learned here in Michigan over the last yr is that parents are not buying Chinese ATVs for themselves, but have no problem buying a Chinese ATV for their kids. WHY? Simple, a kid aged 5-12 yrs old is not going to be very hard on an ATV and will outgrow it very soon. Parents would rather spend 1000.00 bucks on a Chinese ATV than fork out 2500.00 for a brand name ATV that the kid will out grow very soon anyway.

You must be carefull with the purchase of a Chinese ATV, but there are some good ones out there. So good, that im in the process of buying a dealership very soon here in Michigan to start out with the Chinese machines.

 

Good decision. China responds to market demand and you'll prosper. Most of their ATVs are simplified reversed engineering from Japanese products as production fillers, but, with no national dealer network, they haven't been interested in the brand loyalty factor. Make a name for a Chinese $1k ATV in your area, especially with a tiny instruction track (for a small fee, of course), and you'll be coining money.