Yoshimura introduces franchise accessory kits

Packages designed to increase margin on new bikes

Yoshimura wanted to be noticed at the Tucker Rocky/Biker’s Choice Brand Expo. Not that other vendors didn’t want to see dealers, but Yoshimura made extra efforts to attract dealers to its booth, with stickers on elevator and hallway floors leading to the expo hall of the distributor’s show.

Why the big fuss? Yoshimura had something new to show dealers, and the company didn’t want any Yamaha, Honda, or Kawasaki franchise dealers to miss out on its latest program. Yoshimura has created what it calls franchise kits for seven motorcycles.

The kits include a variety of accessories and a unique vehicle graphics kit designed to be sold as a package, to increase dealer margin on new, unregistered motorcycles.

The kits for the Yamaha YZ250F and YZ450F, Kawasaki KX250F and KX450F and Honda CRF250R and CRF450R include a stainless steel exhaust system, an engine plug set, a steering stem nut, axle blocks, a brake clevis, a graphics set and “customer care swag.” The Honda Grom kit includes a carbon fiber slip-on muffler, a fender eliminator kit, an engine plug set, a steering stem nut, stand stoppers, bar ends, two sets of graphics (one for the red, and one for the black Grom) and “customer care swag.” For dealers, the packages will also include labor estimates and warranty documents.

Though Yoshimura has only released the kits on seven bikes for the launch, the company is already looking at adding kits for another five or six street bikes.

So far, dealer reaction has been extremely positive, with more than 100 dealers signing into Yoshimura’s franchise kit database on the day the program was introduced at the Brand Expo.

Powersports Business caught up with Dave Waugh, director of sales forYoshimura R&D of America, Inc., who filled us in on the program.

PSB: Why did Yoshimura decide to create these kits?

DW: There’s a lot of issues from a global perspective with trying to maintain price, protect brand equity and brand value. Yoshimura is obviously a brand that we believe has that magic quality about it and has historically done well in franchise brick-and-mortar stores. Today, because of the pressure from the Internet, a lot of those stores and businesses have been reluctant to inventory or carry the product.

We’ve heard time and time again about the problems with price-topping on the Internet. They’re not justified in carrying the product. So there’s a couple things that we’ve done. One is, from a compliance standpoint, we worked very hard to develop a line of product that is compliant, even in California, so we have well over 100 skus today that a California dealer can bolt or mount on to a brand new motorcycle on a showroom floor.

In the interest of getting these dealers engaged with the brand called Yoshimura and getting them to recognize that we’ve heard their complaints, we’ve established this product line and the database to manage it, so we can have something that’s truly exclusive to them. Their customer cannot go to the Internet and buy this product.

In the lifecycle of a motorcycle, when a manufacturer puts it in a crate, it goes to distribution, ends up in a dealership under a flooring plan, the dealer has control of that product, and they have, in effect, control of the customer in a way. With this product line, they can take that customer off the Internet by sending them home with the product, rather than send the bike home, where the customer is going to end up on the Internet, and we have no control. Oftentimes a customer ends up on the Internet; they buy some substandard product and ends up having a horrible ownership experience, so we have a product line that the dealer can actually use to take that customer off the market before they go home.

PSB: Why did you decide to start with the seven bikes that you started with?

DW: For one thing, because it was a way that we could cover each of the brands. It was a way that we could have kind of a level playing field. The motocross segment obviously is full-race product, and with this line of bikes, we could cover the 250 and 450 open and the full-blown motocross race bikes with a franchise kit that covers all brands, and the pricing is a fairly flat line between them, so we could cover a lot of good bases with this product.

And then the Honda Grom, because … when a lot of the product that we developed for the Grom was first released, we were already working on developing the franchise kit program. … It’s a bike that new dealers have no problem selling, but the margins are challenged, and this is a way that a dealer can sell a Grom and hold really good margin on it by upselling it, and it’s a far superior product than it was as a standard bike.

PSB: How did you decide which components were going to go into the kit?

DW: We are not just an exhaust manufacturing company, so for the fast-moving components and the race bikes that are out there, we have a family of hard parts, we have a family of exhaust applications, and so it’s one of the things that we believe, anyway, is that if the customer buys Yoshimura exhaust, they can continue to accessorize that bike with high-quality components. And in these motocross lineups, we had all of the bases covered. The only thing that we really had to add, other than the dealership and marketing support material, was a custom graphics kit.

PSB: What made Yoshimura want to work with franchise dealers only on this kit?

DW: Today franchise dealers have a hard time. … Even the factory parts that they have supposedly the exclusive rights to, and that the customer should have to go to the parts counter to get, today are being dumped on the Internet, so the value or the return on investment for a franchise dealer has been diminished over time, and without the franchise dealers, we have no business. Without the OEMs and the new motorcycles that are going out on the street, none of us have, we don’t have a business, so it’s in the interest of supporting them and doing something that’s unique for them. They are the cornerstone of our business. Everything else that we do is what I would describe in the aftermarket, and those franchise dealers have had a tough time with the aftermarket, and we want to improve our own brand equity. We have problems ourselves with people and pricing violations on the Internet, so we wanted to do something that we could control and give them a high value program.

PSB: Do you expect dealers that do sign on will have a franchise kit assembled on their showroom floor?

DW: Absolutely. There is a compliance component to what we’re doing. There are some federal standards and local/state standards for exhaust systems, both for street and dirt motorcycles. We have worked very hard to bring our product in compliance. We want dealerships to install Yoshimura product on brand new motorcycles before [customers] go home to the Internet, so the ideal situation for us would be a dealer that has one, two, or three franchise kit-equipped bikes on display on the floor and then to take the components of our exhaust lines that are legal for a dealer to install on new motorcycles and accessorize before they go home to the Internet again. The dealer has control until that bike comes out of the finance office. Once it comes out of the finance office and is warranty registered, the dealers loses, we all lose, control, and that customer is going to end up on the Internet, so it’s not just the franchise kit. We would like to merchandise the franchise kit also on other new bikes and have dealers understand that we have a new signature series of exhaust that they can install on motorcycles on the showroom floor and keep that margin in their brick and mortar store and not let it go to the Internet.

PSB: Why unveil these kits at the Tucker Rocky show?

DW: Tucker Rocky’s been a very good partner for Yoshimura. When we originally talked about this program to Tucker Rocky, everybody that we talked to got excited about it, understood what we were trying to do, so we’ve been kind of working with Tucker Rocky over time to bring this program together. It’s been an awful lot of work. There’s a lot of moving pieces in this program, and so because Tucker Rocky has been a good working partner and committed to support the program, we told them that this would be where we would go public with it.

PSB: How long has this been in development?

DW: We had a Grom here last year on display with several of these components, and we could see the writing on the wall for that model in that the dealers were really excited about the bike, but they weren’t necessarily excited about the margins that they were going to see in it, and so we brought something to the market before the bike even arrived to help them with that issue. And the Grom was the first place that we started surveying the dealers, saying “What would you think about a program like this if we were going to bring it to market?” And the reaction to it was overwhelmingly positive, so that was where it started just over a year ago.

PSB: Will Tucker Rocky dealers be the only dealers who can get their hands on these?

DW: At this stage in the game, there are two places a dealer can get this product, Tucker Rocky; it is also available from Yoshimura direct. Pricing is fixed; there is no benefit to getting it from us or from Tucker Rocky, and if somebody finds out about the program and signs into the database, we literally will ping a message at them that requests that they get the product from Tucker Rocky.

PSB: What has the dealer reaction been so far?

DW: The dealer reaction has been, what they’re telling us is finally somebody is doing something. The dealer reaction has been really, really positive, and typically my response to them has been, well, please understand that you guys complained; we listened, and we’ve done something now. We’ve got a program for you that we are willing to absolutely protect and make sure it’s something that has absolute integrity. We’ve done our part; now you need to do yours.

PSB: Are you requiring a minimum order to start?

DW: Not at all. If a dealer, for example, let’s say if a dealer is in a market that’s not strong with motocross, we don’t expect them to buy one of these kits because it’s here and it’s on offer. We want these kits to work for the dealer in question. We definitely want them to get into the database, so it puts them up on our radar screen. We will target market to these dealers, so as we introduce a new kit, if it’s a Kawasaki dealer that’s signed in, and we bring a new street franchise kit to the market, we’re going to let those Kawasaki dealers know what it is, what the pricing looks like, and the collateral that we’re going to provide to support the program. The program needs to work for the brick and mortar store. We don’t want the dealer to order a franchise kit if it doesn’t fit their demographic.