Oct. 15, 2007 – Kawasaki expects to outperform the rest
October 10, 2007
Filed under Uncategorized
By Neil Pascale
LAS VEGAS — Tony Murr and Patrick Kelly, two Kawasaki Motors Corp. USA executives, stepped onto a stage at the Mandalay Bay Resort & Casino as clouds of smoke began to dissipate around a shiny red Teryx, a vehicle that is likely to play a big role in the company’s forecasted sales growth.
Kawasaki officials told their national dealer network in Las Vegas Sept. 25 they expect modest sales growth in 2007 and 2008, with each year’s sales growth being better than the industry as a whole.
The Teryx, a recreational utility vehicle (RUV) that spurred the creation of a new business unit this year, is one of the driving factors behind the expected growth. Kawasaki officials said they expect this year’s overall retail sales to be 1 percent over the previous year, a slight improvement but above their forecast of a 4 percent decline for the entire industry. Kawasaki officials also expect increased sales in 2008, with their own numbers improving 8 percent while the industry as a whole declines 2 percent.
While Scott Kiyama, Kawasaki Motors Corp. USA president, spoke generally about the reasons behind the company’s sales expectations — new product development and aggressive sales and marketing programs — it’s hard not to focus on the new business unit, the recreational utility vehicle, as the key to that expected retail growth.
“It’s one of the most anticipated products for Kawasaki in quite a while,” Murr, vice president of sales for Kawasaki Motors Corp. USA, told the dealer audience.
That’s not to say Kawasaki is pinning all its hopes on its RUV. The company entered a new model arena with its KLX 140 and 140L, which are billed as serious dirt bikes for young riders, updated one of its top sport bike sellers in its Ninja 250R and will enter the lucrative California off-road market with its enhanced dual purpose bike, the 250S.
But a slide presentation displayed during Kawasaki’s opening presentation to dealers revealed just how much retail room that the company believes exists in its RUV business unit. Kawasaki believes the RUV segment was about 25,000 vehicles in 2005, increased to 40,000 in 2006 and will rise on a serious growth curve for the next several years until it reaches 150,000 vehicles in 2010.
“The numbers (for the market segment) are staggering,” Vince Iorio, ATV, UV and RUV product manager for Kawasaki Motors Corp. USA, later told dealers at a seminar.
Kawasaki, of course, is not the lone player in this expanding market, with Yamaha, Polaris and Arctic Cat already in the field. But Iorio showed dealers that Kawasaki’s first entry into the RUV market, the Teryx, will arrive in showrooms in January with a price tag hundreds of dollars less than some competitors, along with more cargo room and towing capacity.
“We made a huge investment to produce this (the Teryx) because the market is going in that direction,” Iorio told Powersports Business.
That’s not to say the company will not continue to produce and add to its successful Mule line, a side-by-side that is geared to the utility vehicle field, which consists of vehicles that are made to drive less than 25 mph and have larger cargo and towing capacities. In fact, Kawasaki announced it has added electric power steering to its Mule 4x4 diesel units.
But for what it perceives to be the more quickly growing UTV segment, the RUV arena, Kawasaki announced a national TV commercial for the Teryx as well as the launching of the new business unit. The latter was created to ensure all Kawasaki dealers had the chance to sell the Teryx, which will begin being built at an expected 150 vehicles per day in November at the company’s Lincoln, Neb., plant.
As the Teryx was being designed, Kawasaki had existing business units for ATV and utility vehicles and the new RUV segment produced a question: which group of dealers, ATV-carrying or Mule-carrying, should receive the Teryx?
“If we say only ATV (dealers), then some utility dealers who need it won’t get it,” said Kelly, the product planning and research director for Kawasaki Motors Corp. USA. “On the other hand, if we say, ‘We’ll just give it to our traditional Mule dealers,’ there’s going to be a lot of ATV dealers who don’t carry the Mule but can do very well with this product. And there are some utility dealers who are not interested in this product.
“We decided the best way is to create a new business unit, and this product (the Teryx) and all future products that fit into this category can go out to those dealers that sign up to be a RUV dealer. It just made it much cleaner, much
easier. Now anybody who thinks they can sell this product can have the opportunity to sell it and we’re not leaving anybody out.”
Kawasaki also announced other programs that could potentially reach all dealers:
n The company’s online sales training program, which features product education, has been revamped in an effort to draw more dealership personnel;
n Kawasaki is partnering with Trisect, a marketing company that also works with Nexus, Pabst Brewing and other established retail companies, to improve dealers’ marketing;
n A full set of RUV accessories, at least 60 and counting, are being manufactured, with most expected to be ready at the launch of the Teryx.