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Sept. 22, 2008 – Preparing for a 2009 rise in retail sales

September 22, 2008
Filed under Features

By Neil Pascale
Editor
V-twin custom manufacturer Kevin Alsop has seen what he considers to be the first blip of sunshine on the horizon for the hard-hit segment.
Retail sales for Alsop’s company, Big Bear Choppers, doubled in August compared to the previous month. It was the first hint of good things to come after a relatively flat, if not down, summer selling season.
“That’s not just a fluke,” Alsop said in a phone interview from his Big Bear Lake, Calif., manufacturing facility. “That’s the economy starting to turn.”
Alsop, whose company produces a number of different custom models, has certainly taken steps to prepare for a reawakening of the segment’s sales. Although no official retail sales report is done on the custom V-twin industry, it’s thought the segment’s sales are down drastically from just a couple of years ago. One sign of just how bad things had got in the custom segment was the March Chapter 11 bankruptcy filing of American IronHorse, formerly one of the segment’s largest manufacturers. That company’s sales plummeted more than $70 million in just two years, according to bankruptcy filing records.
But Alsop foresees better tidings in 2009, evidence by his move to bolster his senior management team this past summer. Alsop added a general manager who has strong experience in manufacturing operations in David Ryan and a dealer development manager with considerable industry experience in Rick Urban.
Big Bear Choppers also has taken steps to improve retail credit opportunities to its customers as well as provide better dealer programs, including increasing co-op funds and providing more factory-to-dealer leads.
The fact that the company is increasing its management team is noteworthy in a segment that has seen many of its major players cut staffing.
“You don’t want to contract just for the sake of saving money and take away the ability to function,” Alsop said, noting the company’s current frantic pace to prepare for what they believe to be a busy winter and spring ahead.
“We have to get everything straightened out between now and December as far as process improvement, utilizing our assets as best as possible, getting structure in place, finetuning the building materials and everything else so when we go to accelerate the wheels aren’t going to fall off the car.”
Part of ensuring the sales pace picks up again is finding more retail credit options for dealers. Alsop says Big Bear Choppers is doing that by working with financial institutions that are pulling together smaller credit unions that were not hurt by the U.S. mortgage crisis.
Alsop says the effect the credit tightening has had on the custom V-twin segment was highlighted during the company’s dealer meeting this summer when a dealer told him he had at least 50 consumers turned down for loans during the traditionally slow winter months.
That level of consumer interest should be welcome news to those in the industry who might have thought the V-twin custom segment was merely a fad that has seen its peak years come and go.
“That was a big question I had to answer myself, saying, ‘Is our industry done?’” Alsop said. “Do I need to go and build boats or airplanes or something else?
“I’ve been a motorcycle enthusiast all my life so I didn’t believe that could possibly be true because people love motorcycles. And if you build the coolest looking motorcycles out there, then your market is not going to away. It just can’t.”
The market, in fact, is receiving increasing interest outside the United States, Alsop said, noting as many as half the orders Big Bear Choppers is currently working on came from outside the United States.
“We’ve always been dabbling with international here and there with our kits for a long, long time,” he said. “In the last year, we’ve had some people that really want to get serious.”
In fact, Big Bear Choppers has recently signed a distribution agreement for Europe as its bikes have cleared emissions regulations to retail there. The company also is selling in Australia and has plans to expand to Asia.
While those activities will boost the company’s dealer network, Alsop also is seeking to increase Big Bear Chopper’s network in the United States from the current 65 to approximately 100 by next spring.
“We’re definitely going to be helping dealers with floor planning come November, December to get them pumped up for ’09,” he said. “I think everybody is in agreement that ’09 is when the economy is going to turnaround. I think that we’re starting to see blips of it right now.”

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