Mel Harris Q&A
July 20, 2007
Filed under Uncategorized
PSB: Suzuki Motor Corp.’s 2006 financial report showed the company is expecting a 23 percent increase in the amount of new motorcycles it sells this year. Is that a reflection of what they expect from the North American market?
Mel Harris: I think the North America market has been a bright spot for them. Europe has been doing well, but the gains are smaller. We have the ability to go up and down very fast and I think we have the product — great product — and we’ve had great results and we’re getting a lot of good response from our dealers. Some of (the dealers) are really upset with the competition and they seem to be making a better profit on Suzuki product and they’ve really supported us with all of our programs and our product. That has turned out to be very strong (for Suzuki). I think the lowest (sales increase) I have had in the past 10 years is 5 percent and the largest one was 21 percent. So those are large gains, and (Suzuki Motor Corp.) is depending on us a lot.”
PSB: Some of the new products you introduced at this show fall into the off-road segment, which has seen reduced sales in recent years, according to Motorcycle Industry Council (MIC) data. Any concern your new product is entering a market that is getting smaller and smaller?
Harris: I think the market says you need to have those entry-level (off-road) models for (young riders) to move up. We need do that. I don’t think we’re going to go out and have an extensive (off-road) line like a few of our competitors have, but we’ll have the key model sizes that will be needed to represent the line. You’ll see our biggest effort on street bikes.”
PSB: Another segment that your new product is entering is the cruiser market, which is being affected by Harley-Davidson’s decision to increase production. Is that something that’s impacting you all, or are you trying to reaching a different demographic?
Harris: I don’t want to upset those boys in Milwaukee, but I think we’re offering them some challenges. … I think the American public is looking around besides just looking at Harley because all of us in the Japanese market are producing nice bikes and big bikes and they’re less expensive. Admit it, Harleys are well over $20,000. The M109 has been a home run and it’s not $20,000. The C109R (Suzuki’s new cruiser) is going to be our highest priced cruiser, but I’m not worried a bit. The things I’ve heard from the people in our focus groups who have tested it said we’re right in the ballpark.
PSB: The first quarter was slow for the industry in terms of new unit sales compared with the previous year. How has the second quarter been for Suzuki?
Harris: I’ve seen May come back to about equal to last May. My numbers in June are ahead of last year’s June so we feel good. I kind of parallel this year to 2003. If you go back and look at the industry numbers and remember a presentation that was given at the MIC, January, February, March, April and May were down and in June it shot up and it continued. You can’t believe the weather guys as gospel but everybody’s predicting it’s going to be a longer summer. I think that’s going to help us. Everything I’ve seen so far has been very positive in May and June.
The housing market is the biggest thing that’s hurting us. All of the equity people took out and bought some of those toys before, that’s not happening now. Construction has slowed down. Those are our buyers. … Once we see that straighten out a little bit, I think you’ll see everything pick up.
PSB: You said in your speech to dealers that U.S. consumers seem to be adapting to higher gas prices and they’re not necessarily looking to motorcycles as a possible fix. Does that mean Suzuki might not bring a lower-displacement scooter into the U.S market, which is something you’ve talked about previously?
Harris: No. We know we have to do it. We have a great demand, even in my area. Where I live in California, I see people digging out old scooters from the ’80s and ’90s and telling their kids, ‘You ride that.’ Cars are getting a little bit expensive right now. Two years ago, you never saw a scooter. But you see them now, getting dug out of the garage and people are using them.
— Neil Pascale