State of the industry

With HD dropping Buell and trying to sell MV Agusta, you are going to see a fair amount of change in the industry over the next year.

Many of the aftermarket manufacturers also provide the OEM's with parts, so with OEM production stalled, these companies are hurting big time - the aftermarket side of the business isn't enough to keep all of these suppliers going. Already there are numerous small suppliers either closing temporarily or shutting down altogether.

We've lost one small supplier recently, and others are struggling. A number of parts are dropping from supplier catalogs due to factories closing - it's left us scrambling to find sources for some of these parts.

When I look at invoice numbers from our suppliers/manufacturers, some of the companies are down 30% or more based just on looking at their invoice numbers. Reality they are down more than this as the average invoice size it likely to have dropped too...

Rumor (very credible) has it several companies are up for sale and may sell, or just shut down if a buyer isn't found soon. This includes a sprocket company we used to deal with.

While it's not all doom and gloom in the industry, it sure will weed out some of the weaker companies.

The banking industry has a nice sterile term for this. They call it an "adjustment". Nice non-threatening almost therapeutic word. Does a good job in disguising the thousands and thousands of people who lose their jobs, houses and sometimes families in economies like this. Percentages, flow charts, line graphs representing a lot of peoples lives seems so cold. Self regulation for those who loves and worship money makes sense doesn't it? Kind of like trickle down economy. It sure is.

Indeed. The ripple effect is working its way through other sectors of the economy now. However, it will open up some interesting opportunities for some enterprising people.

Several of the companies I see in distress were in poor shape before the economy took it's downturn. So it's very much a 'cleaning' process.

Yes, I agree about the opportunities. I do think we'll see some new companies emerging, and some well positioned companies coming on strong once the economy perks up.

As always Jeff...timely news. Appreciate the overview.

Overall the industry is starting to come out of the chaos and confusion of the past couple of years.

We are still seeing some fallout from the financial turmoil. Several suppliers behind some of the major companies have shut their doors permanently.

Some parts are discontinued - at least until someone else starts making the same part.

Vesrah suffered a major hit when their head gasket manufacturer abruptly closed their doors. That happened mid-2009 and even now Vesrah is still unable to ship all their gasket sets.

Keihin and Mikuni both were hammered. It turns out they shared the same slide manufacturer - and with the OEM companies not making new units, that company disappeared too. Both Keihin and Mikuni are stuggling with carb sets availability - although that is improving.

We've seen many of the industry supplliers running out of product - major companies like K&L and Motion Pro have run out of many of the popular items. Caused by the combination of the economy perking up and them skinnying down inventory to cut costs.

While the vintage bike market is thriving, OEM dealers are still struggling - and many of the industry aftermarket big names are seeing much reduced overall sales - but it's not across the board. Talking with some of the local companies, the OEM dealerships are finally starting to sell new units - and now the problem is the OEM's don't have what is selling... sigh...

Most of the small independant shops we deal with are busy as they have ever been - a good sign for them.

If you ever want to gauge the health of some companies that you order from, look at their invoice numbers... we've a couple of suppliers are REALLY struggling based on their invoice count... So... I wouldn't be surprised to see a few more casualties in this industry over the next year or so.

more to follow...

Nice report.Thanks.The little one man shop where I hang out almost went under this winter.Now he has more work than he can handle.The Kawi/Suzuki dealer here aint sellin poop-they are staying alive via their service dept and now boat sales.bj