It’s a tough time for everybody in the motorcycle industry. The market is hurt by aging demographics, market saturation and the real estate crisis in the US spreading outside our borders through the loss in value of mortgage backed securities. In an interview, Big Dog’s president Nick Messer, explains how his company intends to face the motorcycle market challenges. Since 2005, Big Dog Motorcycles didn’t release any dollar or unit sales. In 2004, the last year the company reported results, it had sales of $120 million on about 4,500 bikes. Messer states that sales last year are about 15% lower than the year before. The company had to do 2 rounds of layoffs and is actively pursuing cost cutting. He thinks that Big Dog still owns 35 to 40 percent of the custom motorcycle segment. The hot trend for high-dollar custom bikes was a fad, he said. Seeing the market for very high end bikes shrink, Big Dog intends to pursue a strategy of lower priced models (like with the new Mutt model for 2008) with a strong trend toward the retro look imposed by the one-off bikes created by custom builders. Big Dog is also looking seriously at expanding into Canada next year and is busy lining up dealers and studying export requirements. Like many, Messer remains cautiously optimistic and just released the new 2008 models. Big Dog Motorcycles.
Update Friday January 4th, 2008, 11.50 PM: Blaming a downturn in the economy, Big Dog Motorcycles announced a layoff of 20 employees this Friday. In an e-mail from Marketing Director Paul Hansen, he admits that 2007 was a difficult year for the custom motorcycle builder. The high-end motorcycle market has suffered with the housing market decline and the financial lending crisis. "We believe that a lackluster economy will continue to keep demand for our motorcycles lower than normal over the next year," said Hansen. The 20 positions come from across the company. "These are good people, and a most difficult task. The affected employees have been treated with respect and fairness."
Spot on analysis.
RE:
“…aging demographics, market saturation and the real estate …”
“…hot trend for high-dollar custom bikes was a fad…”
According to the radio, last moth the used housing market was up some. But that still leaves “Saturation” and a fading “fad.”
Their strategy:
RE:
“…intends to pursue a strategy of lower priced models …”
Is building into a falling fad viable?
RE:
“…strong trend toward the retro look imposed by the one-off bikes created by custom builders…”
Don’t know bout this. What’s “retro”…? Is-zat like “bobers”..??
RE:
“…expanding into Canada next year…”
Maybe, if the $ stays low, the export costs don’t eat up the margin, and they find a market.
Sounds like an up hill battle to me. I wish em luck.
-nicker-
It had to happen. Hope Big Dog will survive.
And American Iron Horse? Still alive?
I loved American IronHorse product.
I think if any company will survive the economy,
it will be Big Dog. Times are tough.
RE:
“… times are tough…”
Well, times are “different.”
To survive ya have to adjust.
So, maybe the a “quad” or a “three wheeler” will fit that difference…
-nicker-
“…hot trend for high-dollar, custom bikes was a fad…”
Not so. There’s always a market for high-dollar custom bikes. But these are high-dollar production bikes. Different beast altogether.
American IronHorse closed its doors officially this past week. Laying off pretty much everyone with th exception of a coulpe of big salaries.Employees were told possible return in march but nothing definite . This during a 2 week layoff already in place. Doesnt look good for these guys..
Bigdog and American IronHorse both going down—where will that leave the blue collar worker to get a well built custom or atleast production custom bike. Before long it will be impossible for the average Joe or Ryan to buy the bike he really wants without draining his retirement plan. I really hope the motorcycle industry doesn’t go the way of old music cars—you have to be a baby boomer with millions to get what you want. At that point I think we all lose. Just my opinion.
Unfortunately for American Ironhorse they have managed to burn every bridge possible in regards to there vendor/suppliers. Even if they managed to get some new investors and strong sales, can they really keep from screwing it up again? As much as it they hate to admit it, they need the Bob Kays, Bill Ruckers, Tim Edmonsons of the world . If anything for there knowledge of the industry. You need to keep them on a tight leash but you need those kinds of guys. A guy from Johnson & Johnson as there ceo ,(lets see 2 ceos ago)what does he know about the custom motorcycle industry? Don’t say its all relative people.. people will always need shampoo but a 30- 40 thousand dollar toy in these times dont think so..
joe
BDM is not goin anywhere! They set the trends, not run from them!
Hope BDM will be ok soon. I owened a AIH LSC and sold it because I panicked and sold it because of the factory shut down. I regret selling it so soon and the new owner is more than pleased with it. The AIH is by far a more real type of chopper , both in performance and looks than any of the Big Dogs. The S&S 117 that IH had in it’s line was hot,hot. The Big Dog choppers with the S&S motor was so epa friendly it could not compete in performance with any of the 88’s & 96′ Harley has. Even if Ironhorse survives it wont be the same anymore. Good luck to all you owners of the AIH of days gone by.
U.S. Congressmen Jason Altmire (D-Pa.) and Phil English (R-Pa.) unveiled legislation intended to help manufacturers whose businesses are jeopardized by Chinese imports. The Supporting America’s Manufacturers Act (H.R. 5960) establishes Congressional review of the President’s decisions regarding whether to provide temporary relief — in the form of import duties or quotas — to American companies facing market disruptions caused by Chinese imports.
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