Aug. 10, 2009 – Fox: Holding, growing market share
August 10, 2009
Filed under Features
MORGAN HILL, CALIF. — One of the biggest icons of the industry has felt the effects of the recession but is maintaining its market share position, if not building on it.
That’s the message from Greg Fox of the Fox Racing family.
Fox, vice president of sales for the aftermarket company, recently sat down with Powersports Business at Fox headquarters to discuss the iconic brand and its sister brand, Shift.
Shift, an aggressively styled brand, provides the company a range of products for the on-road motorcycle market, something the more well-known Fox Racing brand once did. Of course Fox now concentrates on the off-road market while Shift has products for both the on-road and off-market segments.
Shift has its own brand leader and design team while it shares its selling team with Fox Racing.
“The slowdown isn’t a surprise to us at all,” Greg Fox said of the off-road market. “We didn’t feel like those steady, huge gains in new unit sales of dirt bikes would go on forever.”
Fox spoke about the company, a family owned and operated firm, that has been able to do something few firms inside or outside of the industry can say: Not layoff any employers.
Still Fox sees a continued difficult environment for the U.S. retail market. “The saying I use is: ‘The party was too good for too long to have a short hangover,’”?Fox said. “In general, people will be more conservative with their money and I don’t think it’s just a short-term thing.”
But Fox has confidence that the Fox and Shift brands, as well as the company’s 2,000 dealers, can weather the economic storm. Powersports Business sat down with Fox to discuss the current market place.
Powersports Business: The Shift brand started in the street motorcycle market about five years ago. Realizing there wasn’t a huge initial push with the brand, how satisfied are you now with your street market presence with Shift?
Greg Fox: I’m really happy with how far we’ve come in five years. I feel now the product is really good. We have the fit dialed in and have a unique look. Sell-through has been good. We have a few home run products that have helped us start to penetrate the market and make a name for ourselves.
PSB: Is there a changing emphasis with Shift toward the street side?
Fox: Not in product-creation time. There is just as much product-creation time in dirt as there always has been. When it comes to actual selling time, we’re seeing really good sales growth in the street product. We’re putting more time into it than before because the street side of the business seems to be stronger than the dirt side in general. We talk to dealers and they say the dirt business is really soft. They’re not selling as many dirt bikes as they were, but street is still hanging in there.
PSB: Unit sales for off-road motorcycles have eroded during the past four years. What effect has that had on Fox Racing?
Fox: It hasn’t hurt us in market share. We’ve seen dealers go out of business or go on credit hold that weren’t out of business or on credit hold a couple of years ago. So that’s hurt the business. Dealers aren’t seeing the floor traffic. It’s definitely slower than it has been, but our market share is as strong or stronger than ever. In times like this, the saying is, ‘The strong survive.’ And dealers are focusing more of their open-to-buy dollars on the top two-three brands as opposed to some of the ancillary brands.
PSB: Comparing U.S. sales to international sales, is one stronger than the other for Fox?
Fox: This global slowdown is truly global. Some countries are hurt worse than others. Of course Australia’s economy isn’t too bad vs. Eastern Europe, which has been off big-time. Japan is very slow. The severity varies by the country.
PSB: What business changes, in terms of dealer services or programs, have you had to make to deal with the slowdown?
Fox: We have to be more forgiving to dealers that are slower to pay than normal and more frugal with our marketing budgets than in the past. There are not so many multi-million-dollar endorsement contracts as there used to be.
PSB: Through our relationship with ADP Lightspeed, Powersports Business has seen dealer PG&A sales down 10-15 percent for much of the United States this year. Are you seeing similar decreases in your sales?
Fox: Yeah, similar. We’ve forecasted that 2009 would be slowing down compared to 2008 and so far year-to-date it’s tracking the exact number we predicted it. So we’re happy because we budgeted everything around that.
PSB: What is your game plan for keeping your strong market share?
Fox: Focus on making great product, as we always have, and being the market leader, continuing to lead with our marketing and our products and manage inventory well. Those are the key things. PSB