Takeo Fukui’s speech this week was a bit on the gloomy side as the company adjusted its profit forecast by 67% in the wrong direction. Slumping auto sales and a sagging U.S. dollar were the main factors for Honda’s third profit forecast cut this year. But Honda’s take on the motorcycle industry was much more […]
Honda’s View of the Motorcycle Industry in Canada
Recently here on Motorcycle.com, we’ve been bringing you reviews of a handful of Honda scoots that are available to our neighbors (or is that neighbours?) to the North in Canada, yet remain forbidden fruit for American consumers.
Meanwhile, Honda’s competitors have also announced some new products for Canada that have yet to be made available in the U.S. Yamaha Motor Canada is importing the new Fazer 8 and FZ8, while Kawasaki Canada announced it will offer the new Ninja 400R.
But before you start thinking of Canada as the land of milk and honey and “$#!+ we ain’t getting”, Honda brings some sobering news about the Canadian motorcycle industry, especially when it comes to the Japanese manufacturers.
Warren Milner, Honda Canada’s senior marketing manager spoke recently with Canadian journos at a presentation in Cape Breton, Nova Scotia, and his message was blunt.
“As far as we’re concerned, the motorcycle business (in Canada) is bankrupt,” Milner says. “We’ve hit rock bottom, so now we’re going to rebuild.”
How bad has it been? The global economic downturn hasn’t hit Canada as hard as it has the U.S., but that doesn’t mean it’s been smooth sailing. To survive the recession, Honda Canada has been offering throat-cutting promotions on previous model years to clear out back inventory. Meanwhile, 2010 models haven’t been selling, despite Honda lowering the prices to narrow the gap between Canadian and U.S. pricing.
Honda’s efforts have put it back on top of the sales charts, but it low prices haven’t helped with profits. Even worse, according to Milner, the price slashing has lowered the value of the brand. After-sales support has also taken a hit as there isn’t enough money to provide it.
By contrast, European manufacturers such as BMW, Ducati and Triumph, have been able to keep up with sales without hurting the bottom line. The difference, according to Milner, is those companies have been selling the lifestyle and image of their brands, and in so doing, the value.
What will Honda Canada do now? No more discounts, for one thing. Customers will see dealers stick close to MSRP in 2011. They may also see some new models. The CB1000R, for one, is almost sure to arrive in Canada. There are other holes in Honda’s product lineup that could be filled.
Right now, Honda Canada’s best selling model is the CBR125R, which trails the Kawasaki Ninja 250R on Canada’s top sellers list. Both entry-level models have been doing a good job bringing in new riders, and Kawasaki’s new Ninja 400R (pictured above) will give those new riders an option to upgrade. But Honda doesn’t yet offer anything similar in that bracket. Its VTR250 naked V-Twin roadster sold in other markets would be a ready-made bridge from the CBR125 to the CBR600RR.
The Canadian motorcycle industry is much different than it is in the States, of course. With a smaller population, shorter riding season, not to mention different government regulations, Canada presents a different set of challenges for manufacturers. Still, there are lessons that can be applied to the U.S. market.
Honda was previously famous for bringing in new riders to the sport, but there are precious few small bikes in American Honda’s street lineup. After the 234cc Rebel cruiser ($3,999) and supermoto-styled CRF230M ($5,399), AHM’s non-dual-sport street lineup has a big hole until the 745cc Shadows ($6,999) and CBR600RR supersport ($11,199).
With sporty small-displacement bikes like the CBR125 and Ninja 250R topping Canadian sales charts, you can be sure Honda’s American arm is crunching numbers to make a case for the little CBR or the Monster-styled VTR.