DealerNews Interview: Mark Brady (Good Reading!)

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Husky Starts to Fill in the Gaps
Publish date: Apr 16, 2009
By: Guido Eber

Read it here: http://www.dealernews.com/dealernews/article/articleDetail.jsp?id=593808&pageID=1

Mark Brady, former CEO of Triumph Motorcycles America, became president of Husqvarna Motorcycles North America, LLC in July 2008, following the BMW Group’s purchase of Husqvarna. Dealernews recently met with Brady at his office in Woodcliff Lake, N.J. to learn what has been going on with Husqvarna since he took control of the brand here in the U.S. nine months ago.

DEALERNEWS: What have you and your staff been doing since you joined Husqvarna?
MARK BRADY: There wasn’t a staff [laughs], so one of the first things was to hire an entire staff and implement a whole new operating system, as well as deal with the whole reorganization at the mother company HQ back in Italy.

Does a lot of direction come from BMW in Germany?
BRADY:Obviously BMW in Germany owns the company, so it must. But from my point of view, my direction comes from Italy. There are two gentlemen who are BMW time-served guys who run Husqvarna SRL – Rainer Thoma and Thomas Moser – and my direction comes from them.

How many bikes did Husqvarna retail in the U.S. last year?
BRADY:I’m not 100 percent positive, since we only took over in July. It’s somewhere between 1,800 and 2,000, but I would suspect closer to 1,800. Our wholesale numbers were quite similar, which is not a bad position to be in.

How do you see that number changing for ’09?
BRADY:We see some small growth for ’09. To say ‘The figure will be X’ would be audacious at the very least, but we’re expecting to grow to over 2,000 – and that’s with the addition of new dealers.

What are the three issues you need to overcome to increase consumer sales in North America?
BRADY: Awareness, confidence and dealer development. To get to the numbers we’d like, we’ll have to have a larger dealer body than we do at the moment. We have what we call a white area, where we have no dealer representation, in about 10 states. If you don’t have a dealer in Utah, you can’t expect to sell very many motorcycles in Utah – and that state is a great example because there is a lot of off-road riding and no way you can easily feed product into it. It’s a long haul from Salt Lake City to anywhere.

How many dealers do you have?
BRADY: We have a dealer body of about 80 in the U.S. and a half-dozen in Canada. We fortunately did inherit the dealer base and didn’t have to start from scratch there. And many of those dealers are incredibly passionate Husqvarna people who know more about Husqvarna than half the people who work in the company. They’re real aficionados who know every nut and bolt from 190-whatever and all the way through.

Where do you plan to add dealers?
BRADY: We’ll start with the white space, where there are no dealers. We have great representation in Southern California but not in Florida, and we’re covered pretty well on the East Coast, but less so in a large state like Texas. Perhaps it has something to do with where Ferracci was. We didn’t sign any new dealers on during the first few months because we felt we had to get our systems in place. But we’re now ready to do that.

 

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Does the plan include sharing BMW’s existing dealer network? Getting into multi-line dirt-oriented stores? Targeting Euro dealers more than Japanese dealers?
BRADY: It can be any of those. We do strongly believe that a dealership has to have a passion and understanding of dirt bikes. For instance, one of our largest dealers also has a Harley-Davidson store. One of the partners, a son, has a very strong affinity for off-road riding and has been very strong for us.

How do you stay in contact with your dealer network?
The main day-to-day communications are through a dealer portal, so it’s Internet based. So if they want to order parts, check inventory, do warranty claims – all of the day-to-day nitty-gritty – it’s through that. With such a small team here, the idea was to make everything as automated as possible. And that’s why there has been such a big systems push to develop all of these things in the first few months. We don’t have the hangovers of being a 1980s-type business that has to modernize, and it’s the way a business designed in the 2000s should be.

Yet you must have people, reps, crisscrossing the country, visiting dealers…
No, we don’t. I’m not saying we never will have. But, to start out with, we don’t. It’s very expensive for any powersports business to have traveling reps. When you have a very small dealer base that’s scattered throughout the entire country, it could be quite impossible. Would we have a better understanding of our dealers if we were in there visiting them every week? Of course we would. But that’s not feasible with the volume we’re at, at the moment. So for now there are enough basic, grassroots things we have to put in place.

Is there an annual dealer meeting?
BRADY: Last October we had the very first annual Husqvarna dealer meeting in probably the past 20 years. Nobody is quite sure when the last one was. Somebody said ’86, somebody said ’89. Nevertheless, the enthusiasm of the dealers, and their passion for making the whole thing work, was incredible. They had been neglected in many ways for so many years, so it seemed they were quite excited that there’s actually an owner who believes in the brand and wants to take it back to what it potentially could be. This year we plan to do it in July, during the first round of the Endurocross, to have some sort of theme for the dealers.

What are some of the concerns you’ve heard from the existing retailers?
The concern they now have, and have had, including with their other brands, is retail finance. The horror stories I’m hearing is guys with good credit not getting a loan. But, lucky for us, we actually have retail finance through BMW Finance.

That must be important, because certainly the average dirt bike buyer is at the opposite end of the financial spectrum than the consumer of a BMW 1200 GS.
Lets face it – we all know the reason the dirt market has suffered so badly in this economy is because of a lack of credit for young people. They were the first to suffer, and that really, really hurt the dirtbike market. Offering retail finance is a very important part of the American market. But how you actually work with the customers who are on their revolving cards is another thing entirely. There’s a Catch-22 there – yes it brings people into the brand, but it also turns them upside down. We’ll try to be responsible.

Is Husqvarna going to continue to be dirt-oriented, or is there thought of an expanded on-road lineup?
We have supermotos, which are very, very important to us, but we see that as a part of the dirt market. We see ourselves very much as a dirt company. And not just that, but a racing dirtbike company. Street-legal supermotos are a genre we hope will grow and grow, but those are racing dirtbikes with lights and indicators and not streetbikes with knobbies on them. We have I believe the widest model lineup of supermotos, and you’ll see us very much involved in more supermoto sponsorship and marketing activities in coming years. But supermoto suffers from a lack of awareness, much like our company.

Where do you feel Husqvarna is with product pricing? In line with your European off-road competitors? A bit more expensive than Japanese product?
On dirt we tend to be a few hundred dollars more expensive than the Japanese and several hundred dollars less than other European brands. We Europeans suffered very badly during the last couple of years because of the weakness of the dollar, but it looks like it’s going to be the Japanese who suffer this time around. If they don’t raise their prices this year they’re going to be making very, very little with anything in a dollar market. And that should give us a little more breathing space.

With that pricing in mind, how do you obtain new buyers – those coming from other brands?
Through racing, good marketing, good positioning, actually getting our name out there and creating awareness. Start from the beginning and get people to know that Husqvarna makes competitive off-road bikes. You can tell them that as much as you’d like, but having them actually see the bikes win races and having good quality dealerships in key areas will help them believe it.

We saw the Hero Deals promotion February through March. Is there a schedule you’ll be sticking with?
We extended the Hero Deals through April, partly because our dealers in California weren’t able to take part in the deal because our CARB approval didn’t come though until the end of March. So we weren’t selling in California until a week or so ago. That was an exception – a kickstart to the season – and I don’t think you’ll see many more deals like that coming through on a regular basis. However, we’ll continue to watch the market and do what we see as sensible.

 

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What does the product pipeline look like?
There’s not a lot of ‘08s in the pipeline. We’re a start-up in many ways, and we’re being reasonably conservative.

What’s the racing plan?
We have an East Coast team that’s completely our own Works team, and we have a semi-Works team on the West Coast.

What’s Scot Harden doing?
Scot – he’s a jewel in the crown. Scot’s our marketing and sales guy, and spends half of his time on the West Coast and half here. Anybody who reads any off-road enthusiast press can see what Scot Harden has been doing. In the last four weeks, you’ll have seen something like 25 pages of Husqvarna coverage. I think we’ve probably had more coverage in one magazine in one month since Scot has been with us than the brand has had in the past four years.

What are your advertising and marketing plans for ’09?
The dealers have been under-supported on the promotional front, and on advertising and marketing for quite some time. With that said, we are only a small company and can’t go broad-brush. So we’ll tend to focus on the four or five magazines that are specifically our target area. We’ll make some radio stuff for the dealers, but it’ll be traditional co-op, and we also have what I believe to be the first Husqvarna USA brochure for I don’t know how long. There was an English version of the Italian brochure, but that got very confusing because it had models on it that didn’t come to the U.S. This new one is country-specific and has all of the models we’re offering this year.

How about viral marketing, like YouTube videos?
I could see that sort of thing being very useful for us, and much more likely than seeing a Super Bowl ad. You’re much more likely to see that sort of guerilla stuff.

What does your event schedule look like? Demo trucks?
Not in the short term. We’re a 2,000-bike company at the moment, and that doesn’t pay for any trucks to cross this country.

Finally, what’s the status of the production/HQ facility being built in Cassinetta di Biandronno? It’ll be good to get all of the operations under one roof, no?
It’ll be complete in May. They’ve already moved some stuff in. When we bought Husqvarna we basically bought a brand that was intermingled with other brands, so there were three brands going down one production line. We bought the production line, which they had to then take their brands out of, but our R&D was still in the area in which they were putting their production lines into. It’s been quite a big operation for them to untie all of the companies. It’s pretty impressive that they kept bikes churning out during a pretty complex process.

BMW leadership, in announcing the new facility, said the goals were to reorganize the parts business to solve problems in the supply of spares, and launch programs to improve product quality.
I heard from dealers that it has been a problem since 1986, if not before. We think that if you speak to a dealer in June or July of this year they’ll say those problems are in the past. They’ve already moved all of the parts out of the Varese facility to a specialized parts warehouse, and that has most certainly already improved not only the supply but the packaging and all of the systems that go with that business. Here, with the implementation of our new systems, we’ve ironed out most of the wrinkles and we’re very close to having something we can be very proud of.

Full interview here: http://www.dealernews.com/dealernews/article/articleDetail.jsp?id=593808&pageID=3

 

[Stapleking]

"....a problem since 1986...".

And Castilgioni bought Husky from Electrolux in...lemme see, uhh...I've got it! 1986.

Mere coincidence, I'm sure...

 

[Colo moto]

thanks for the post Blip. Much usefull info.

 

[NothingClever]

The concern they now have, and have had, including with their other brands, is retail finance. The horror stories I’m hearing is guys with good credit not getting a loan. But, lucky for us, we actually have retail finance through BMW Finance.

BMW Finance is a great, customer-service focused operation. They'll lend significantly (no pun intended) to the brand's (Husky's) perceived permanency in the market.