ON THE MONEY

On the Money On the Money

Generational shifts, commercial pressures, miscalculations and downright incompetence have repeatedly changed the UK retail motorcycle trade’s face, even at an apparently rock-solid highest level. And it’s currently on the move again at a fast pace.

The latest network ethos runs on a “take no prisoners” basis. Dealers are obliged to comply with every branding ID, showroom configuration and inventory requirement, alongside location suitability and often solus factors, imposed by suppliers. If they don’t, sooner rather than later, they’ll be out on their ear.

Against this background, I was surprised that nobody queried how a yawning gap in Triumph’s dealer network coverage had emerged last autumn on the Wirral, to be efficaciously filled by the burgeoning Completely Motorbikes chain with a brand-new Triumph Chester showroom. The back story to that, of course, was Hinckley’s decision to abruptly withdraw its franchise from legendary local dealer leviathan Bill Smith Motors after 25 years of representation.

Current business supremos Mark and Karen Smith, offspring of eponymous veteran founder Bill Smith, weren’t happy but must have seen the writing on the wall. It amounted to a sizeable bite out of their franchise-heavy status, but Bill Smith Motors’ heritage has dealt with worse disasters. Not least of these was the loss of the original Honda concession upon which its fame and fortune had been built.

From the 1960s onwards, the company grew relentlessly. At one point, it had halfa-dozen large Honda outlets spread across both sides of the Mersey and North Wales and was probably among Honda’s biggest single sources of revenue in Britain.

Hark back to those halcyon days! By 1981, Honda had a grand total of 860 dealerships throughout the UK and held a 55%-plus overall share of the market, stretching to more than 300,000 units that year. Association with the brand was a licence to print money. Bill Smith benefited plumptiously.

However, all good things come to an end. What could be politely described as a clash of personalities saw Bill shown Honda’s door in short order as 21st century reputational rules were applied. The franchise only returned in a Smiths Honda guise occupying stand-alone premises after he retired, having handed the business reins over to Mark and Karen. Now 86 years old and reportedly in poor health, the shock of losing another premium franchise is unlikely to be a comfort for him in his dotage.

RISE AND FALL

Since I moved to London as a refugee from the comparative wilderness of North Yorkshire in 1970, every major bike dealership in the Big Smoke and its suburbs vanished during the subsequent two decades or so I remained a resident. Hubris collapsed in successive waves.

My arrival was too late to admire the full majesty of Pride & Clarke’s Stockwell Road domination. But the palatial Comerfords emporium in Thames Ditton, shifting hundreds of bikes per month, was just down the road from my first digs.

Migrating north of the Thames, a nextdoor neighbour for me in Kentish Town became Powerhouse Motorcycles, fashionably employing the cavernous street-level former entrance and booking hall of a redundant Underground railway station as its operational realm. Powerhouse packed this space with upmarket Harley-Davidson, Ducati and Moto Guzzi steeds from the Coburn & Hughes distribution stable – known colloquially as the Luton Mafia – supported by a Kawasaki franchise’s steady earner. It flowered for several years until sudden disappearance.

Similarly, south of the river, the lavish Mocheck showroom on Clapham High Street churned out Hondas like there was no tomorrow. At its peak, Mocheck boasted more than 60 staff, costumed in bright yellow sweatshirts that were more Baby Grow than Star Trek, and a short-lived West London outpost. Flamboyant proprietor Ian Tay was a leading trade personality, carousing with rich and famous friends.

Then the fickle hand of fate decreed that there was indeed no tomorrow. Tay drifted off to enjoy a new life in the Shropshire squirearchy. Mocheck and other aforementioned edifices, plus a long list of fellow defunct dealerships across the metropolis, fell victim to circumstances beyond their control. Rapidly falling bike sales, engendered by punitive motorcycle licensing reforms in the 1980s, combined with egregiously rising high-street retail property rents, killed the golden goose.

HEAVYWEIGHT CONTENDERS

Once trade had been refreshed by the 1990s’ born-again biker phenomenon, accepted wisdom swerved towards might is right. Consolidation into muscular dealer chains, capable of screwing preferential bulk discounts out of supplier brands to undercut the customer loyalty of small fry tied to SRPs, became the alleged path to success. In retrospect, it was imbued with inherent dysfunctionality, only feeding get-rich-quick

International Share Prices

USA – LACK OF XMAS CHEER

Repeated data dumps underline how the US economy is still over-heating. The warnings these flash up remind investors that central bank policy will therefore keep interest rates higher for longer, to curb inflation. As a result, risk appetite is increasingly thin, as evidenced by weakening Wall Street market indices.

The past week’s dose of doom saw ignominious retreats for all of them. The blue-chip S&P 500 and Dow Jones Industrial Average posted respective 3.4% and 2.8% declines. S&P’s MidCap 400 fell by a harder 4.1% and the Nasdaq Composite incurred a 4% loss.

Biker stocks weren’t popular inclusions on Yuletide shopping lists. Harley-Davidson’s twin listings, represented by its petrolhead HOG and electrified LVWR tickers, both took more severe spankings. Indian Motorcycles parent Polaris plunged by almost 10%.

EUROPE – BABY, IT’S COLD OUTSIDE

Freezing winter weather swept across the UK and mainland Europe, menacing already threatened energy resources. The only warm glow came from missiles and artillery raining down on the increasingly desperate battlefields of Ukraine.

As European domestic and industrial consumers began to burn off their gas reserves, markets inevitably fell. Frankfurt’s Xetra Dax closed 1.1% in arrears while the FTSE MIB in Milan sank by 1.4%. Motorcycle-related shares turned consistently negative by varying degrees relaxation of China’s zero-Covid stance, as investors bet on signs of recovery for the world’s second-biggest economy early in the New Year. Japanese sentiment reacted accordingly, and Tokyo’s Nikkei 225 index returned to positivity by 0.4%. However, the messages from motorcycle manufacturers were decidedly mixed.

INDIA – NOT INVITED TO THE PARTY

Indian stock markets endured their worst week since the end of September, as Mumbai’s BSE Sensex 30 index finished 1.1% down. Primary influence was a massive jump in government borrowing, equivalent to $40bn, to cope with farming fertiliser and pump fuel prices running amok owing to unforeseen knock-on effects from the Ukraine war. www.britishdealernews.co.uk