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Dec. 24, 2007 – A profitable change in philosophy

January 2, 2008
Filed under Features

By Neil Pascale
Editor
HINCKLEY, England — The number of parts and accessories being launched with Triumph Motorcycles’ new touring cruiser is noteworthy in its number, but perhaps even more so in its delivery date.
The Rocket III Touring will come to U.S. showrooms this January with dozens of different ways for consumers to personalize it, something that as close as two years ago was unthinkable.
One of the biggest criticisms company officials heard from its U.S. dealer network, according to Triumph North American CEO Mark Kennedy, was the timing of Triumph’s PG&A items, which would often drag months behind the shipment of new bikes.
The manufacturer has addressed that at its headquarters in England, as well as put a higher priority on getting feedback from its subsidiary offices, including the one in Newnan, Ga.
The marked differences in Triumph’s markets in terms of PG&A tastes was really brought home to Paul Checkley, the general manager of parts and accessories for Triumph Motorcycles, when he traveled to Texas. There he witnessed a riding event that was filled with guys and gals in Stetsons, cowboy boots, chaps and leather waistcoats. In other words, a scene that Checkley would never have dreamed up back in the United Kingdom.
“What we’re beginning to realize more and more is not how much we understand about the American psychology, it’s how little we understand and how much closer we have to get to it,” Checkley said in an interview from the smaller of two Triumph facilities in Hinckley, England.
To do that, Triumph will be re-examining its North American PG&A staffing levels in the near future. The company also has allowed its subsidiary staff to view product months before it’s unveiled to the public. The expectation is this process can help Triumph get a better feel for what inventory it will need for not only North America, but for its other individual markets.
“In the early days, the markets went and did their things, and we (at the company headquarters) did our thing,” Checkley said. “It wasn’t any animosity particularly, but there wasn’t the level of teamwork and integration there could have been.”
The payoff of this increased attention to each market is potentially huge and not just for Triumph. The manufacturer is expected to sell approximately 30 million pounds (more than $60 million) in PG&A for its fiscal year, which ends in June. Those PG&A sales are increasing approximately 20 percent per year.
Dealers also stand to gain. Kennedy says presently Triumph North American dealers average more than $1,000 in accessory sales per bike, with some cruiser sales nearly tripling that. That $1,000 average is expected to reach $1,500 on the Rocket III and its 70 accessories — the most Triumph has ever had on a single bike — meaning dealers could make as much on accessories as they do on the sale of the bike, Kennedy notes.
“Everybody is looking at bike margin,” Kennedy said of dealer focus, “but that (potential in accessory sales) is massive.”
The key to reaching that $1,500 is ensuring as many of the new accessories are available when the Rocket IIIs are initially purchased. To accomplish that, Triumph had to change tactics when designing its motorcycles, ensuring its PG&A engineers were part of that initial process.
“There was a real mindset change,” Checkley said of having PG&A engineers join OE designers as part of the original bike concept team. “We were here to design bikes and then accessories came along and tried to create accessories.”
“It’s more integrated now,” Kennedy said of Triumph’s design process. “And we’re seeing the benefit now as a subsidiary office because when the Street Triple comes out, we can offer the Hooker, the fly screen, the rear seat cowl kit, which are some of your big sellers straightaway.”
The joint design development also enables Triumph to keep safety in the forefront as certain accessories could affect a bike’s stability.
“It’s really just something we’re scraping the surface” on, Checkley said, “especially in the U.S. where the aftermarket accessories are massive. They’re everywhere, and they do everything for everything. We’ve got to sell that value proposition of the OEM part being a better quality and will do the things that some of those (aftermarket products) won’t do, and they integrate better with the motorcycle. That’s our challenge now.”

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