KTM aiming to build street bike dealer base
KTM’s U.S. and Canadian dealers couldn’t have landed in a more idyllic setting to hop aboard the Austria-based OEM’s new-for-2014 1190 Adventure motorcycle.
More than 140 North American dealerships were represented as KTM held its annual dealer meeting at company headquarters near Salzburg, Austria. In fact, the launch of the 1190 Adventure was so appealing that more than 50 dealers extended their stay for the chance to ride the prime roads of Upper Austria. Participating dealers were presented one of the early production 1190 Adventure models at the factory as their personal demo bike while in Austria, with some using the bikes for extended trips to ride the Austrian countryside and Swiss Alps following the meeting. These same bikes were shipped back to their dealerships in North America as the first 1190 Adventures in the region for VIP customer demo use.
“The extended stay allowed the KTM staff in Austria to do something unique and connect from a brand perspective a little differently with our best dealers in the country,” KTM North America president Jon-Erik Burleson said.
The dealer contingent — some 400 strong — was treated to factory tours, with an all-access pass to the KTM R&D facilities and its newly expanded parts and distribution center.
“In 22 years of doing this business, I don’t think I’ve ever seen the dealers more genuinely happy, excited and relaxed at the same time,” said Brad Hagi, VP of sales. “Salzburg is a sort of storybook, fairytale town to go to, and the whole trip was well received by the dealers. They loved it. And the comments keep coming to reinforce that.”
For a brief moment, the dealers in attendance also received some American flavor, as KTM launched the Independence Day-themed 1290 Super Duke R “Patriot Edition.” As much as dealers were clamoring for it, the hand-painted bike is not for serial production, Hagi reports.
Even so, there was plenty to celebrate in Austria, like KTM’s 60th year in business. Burleson was especially pleased to have John Penton, founder of KTM’s launch in the U.S., on hand for the festivities.
“It was awesome to have him there,” Burleson said. “The dirt bike side of our business didn’t exist until John made a connection with the guys in Austria. That’s a particularly key moment in history for the development of our history and brand. It was amazing to have that opportunity, and he was able to spend some time with CEO Mr. Stefan Pierer.”
New dealers on board
The KTM dealer landscape in the U.S. is slowly but surely taking on a new look, according to Hagi. He wasn’t willing to share the number of dealerships that KTM has added in the U.S. in the last year, but the count is certainly on the rise.
“We have a very strong dealer development network plan derived around the function that our product line in expanding into a broader line of street models,” Hagi told Powersports Business in a phone interview following the dealer meeting. “Therefore we need diversity as part of our network. Our typical KTM dealer is an off-road dirt bike dealer, if you will, so we are aggressively promoting the new dealers, mainly to sell street bike product in markets that warrant that.”
Hagi and Burleson referenced KTM’s approach to a “lighthouse project,” whereby the OEM will get into the street bike market with a top-of-the-line superbike, and fill in the product lineup from top to bottom. The 990 Super Duke got things started, and the 1190 Adventure is yet another piece of the street lineup.
“It’s an important approach from a business aspect,” Burleson said. “The 1190 Adventure for sure will be our largest volume motorcycle over the next three years.”
Dealers also were treated to some of the bikes that KTM will be unveiling over the next two or three years. Burleson said that the street segment accounts for less than 10 percent of the OEM’s total sales; he expects it to be 25-30 percent of sales in the future.
“As we start growing that range it becomes a real business model for the dealer acquisitions,” Hagi said. “We can go into a dealership and show that we have a real product range, and we’re really looking to grow. That product range is almost complete. We’re still one more step from completion with a more small dis- placement, entry-price-point bike. We expect that to happen in the next 18-24 months in the U.S. With that complete range, I think you’ll see the street business grow pretty rapidly as a percent of our total business.”
“Absolutely the best street bike we’ve ever built in the standard form” is how Burleson assesses the 1190 Adventure’s launch. “We believe it is the next step for us to take major market share not only in adventure touring but street in general.”
KTM North America officials also shared with dealers that the business saw June sales increase 44 percent compared to June 2012. Data also shows that KTM was the No. 1 selling European OEM in 2012 for production. Its 107,000 units for the year topped BMW for the first time.
In addition, KTM is riding a stretch in which month-over-month, year-over-year sales growth has occurred for 36 consecutive months. That dates back to the recession, and to the date when Roger De Coster and Ryan Dungey were added to the KTM racing lineup.
“All of our racing efforts combined has helped raise brand awareness, yes,” Burleson said.
Don’t expect KTM to go exploring any new vehicle segments anytime soon, particularly if the product involves four wheels.
“One of the things we saw during the global market crisis is you need to focus on the core of who you are,” Burleson said. “Our brand fits well as a motorcycle brand. We see the purity of being a ‘Ready to Race’ motorcycle brand as where we want to focus now for the short-term and mid-term.”
Dealers come away impressed
Paul Lima from GP Motorcycles in San Diego was one particular dealer who attended the KTM dealer meeting and came away impressed.
“This was my first time in Austria visiting the KTM facilities and it’s clear right away that the operation is very well-run,” Lima said. “The level of organization, cleanliness and professionalism was very impressive. Something I’m taking away that is very important to a dealer is seeing the focus of KTM’s divisions. Each manufacturing area is an independent structure required to deliver a specific service. This environment of specific goals lends itself to better quality control and more precise final work, in my opinion. There’s an intense level of focus to each motorcycle component at KTM.”
It wasn’t the first time KTM North America hosted dealers at its Austrian headquarters. The first time was in 2001. Todd Sandoval from Palmetto Motorsports in Hialeah, Fla., is a member of a dealer contingent that has made both trips to Austria.
“I was very impressed when we were (in Austria) for the 2001 dealer meeting, and this time I was blown away with the expansion,” Sandoval said. “Seeing such progress and professionalism at the factory is very inspiring. Anyone can now be a stand-alone KTM dealer these days and be very successful. Within our store, KTM is our number one brand with bikes, parts and accessories. The product is great, but what’s most important is how the KTM staff communicates and interacts with dealers — everyone is committed to ours and their success.”
That success and growth bodes well for KTM dealers who are poised to take advantage of a growing product line and brand sales momentum.
“KTM shows that they’re extremely focused, well organized and heading into the future with a clear game plan with the means and facilities to get it done,” Lima said. “They’re realistic in their future targets and have the structure to make it happen.”