International news
International news With financial editor Roger Willis
Supply issues hinder Harley BMO CAPITAL MARKETS ANALYST Gerrick Johnson has released a quarterly survey of US Harley dealership performance. “Retail checks indicate strong demand,” he said. “Despite macroeconomic uncertainty, dealers continue to see demand outpacing supply, putting a governor on nearterm sales, but aiding in the brand’s perception of exclusivity.” According to Johnson’s sources, many new models are sold before they reach showrooms. “Traditional touring base models may last on the floor for a week or two,” he added. “But we have not had any feedback that customers are cancelling their pre-orders, and dealers continue to plead for more product.” However, the BMO Capital Markets report adds that Harley’s production suspension from 19 May to 6 June, due to a “regulatory compliance matter” relating to an outsourced component, has had a deleterious impact on both domestic and export markets. Although production resumed in line with the original timeline, shipments were subsequently sporadic. Many dealers only received deliveries in the final week of June, and some got nothing at all before the quarter ended. Johnson has therefore taken 8075 bikes, equating to about £130m in revenue, out of his Q2 estimate and into Q3. “The net effect is no change for the year,” he concluded. “But we now expect worldwide retail sales to be 19% down in Q2, but 21% up in Q3.”
Bihr goes west to Arrowhead
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ulti-brand US powersports aftermarket giant Arrowhead Engineered Products has bought leading European motorcycle parts, accessories and apparel distributor Bihr from Belgian private equity firm Alcopa for an undisclosed sum. Bihr, which is headquartered in Belgium, has operations in 20 countries across continental Europe and the UK, supplying more than 15,000 dealers with around 350 brands and more than 200,000 product lines. Its British assets include Arai, AGV, Motul, Wolf and RST distributor Motodirect – plus ownership of Motodirect’s Wolf and RST apparel brands – as well as off-road trade specialist Race FX. These UK businesses respectively joined Bihr’s stable in October 2019 and March 2021. And in June 2021, Bihr also swallowed German parts and accessories trade purveyor Paaschburg & Wunderlich. Alcopa, which acquired Bihr in 2010 and invested heavily in the company’s Europe-wide development from its origins in France, says, “It has been convinced by a strong rationale behind the acquisition by Arrowhead”. This, it claims, “will create a truly global leader in a consolidating industry”.
Consolidation is also very much the name of the game for Arrowhead, which is a much larger entity. It already has a UK presence, having acquired Doncaster-based major bike parts wholesaler HiLevel from the Levine family eight years ago. Built up from predominantly manufacturing roots in Minnesota by US private equity partners Riverside and Investcorp, Arrowhead was sold on last autumn to a really big-league private equity firm in San Francisco, Genstar Capital. Armed with a portion of Genstar’s enormous resources – currently boasting about £29bn of investments in various enterprises – Arrowhead has quickly brought deals to fruition for this new parental relationship. At the beginning of 2022, it took over US distributor Western Power Sports, serving a nearly 12,000-strong American dealer network with more than 150 sales reps on the road and seven strategically-positioned warehouses. The purchase of Bihr barely six months later, including another seven distribution centres and 24-hour logistics turnaround throughout most of Europe, has followed with remarkable rapidity.
Regulator spanks Harley THE US FEDERAL TRADE COMMISSION (FTC) has initiated an action against HarleyDavidson, for illegally restricting the rights of its customers to have their motorcycles repaired at anywhere other than a Harley franchised dealership using approved parts. According to the FTC, Harley warranties include terms and conditions that effectively make them void if customers use independent sources for parts or repairs. And these illegal terms must therefore be removed. Commenting on its proceedings, FTC Bureau of Consumer Protection director
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Samuel Levine said: “Consumers deserve choices when it comes to repairing their products, and independent dealers deserve a chance to compete. This order requires Harley-Davidson to fix its warranties, come clean with consumers and ensure fair competition with independent providers. Other companies that squelch consumers’ right to repair should take notice.” Mike Kennedy, chief executive of leading US aftermarket exhaust supplier Vance & Hines has issued a statement supporting the FTC’s move against Harley-Davidson –
where, ironically, he once served as a senior vice president. “This action taken by the FTC is a huge win for motorcycle riders,” said Kennedy. “While we still need to see how it plays out, we anticipate that riders will have more choices in how they repair and update their motorcycles during the warranty period, which is clearly a big deal for companies in the aftermarket too. I hope that the threat to void a warranty for someone who just wants a better-sounding or smoother-running Harley is a thing of the past.”
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