Ride Apart: Erik Buell Racing Goes Bankrupt - Hero Still Coming to the US
http://rideapart.com/articles/erik-b...ay-seen-coming
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Ride Apart: Erik Buell Racing Goes Bankrupt - Hero Still Coming to the US
http://rideapart.com/articles/erik-b...ay-seen-coming
I was considering creating a thread for really bad business models.
It's Mr's Buell bad biz-carma.
"Hero's" gonna hit US soil one way or another.
I believe the plan was to bring over a 250cc entry level and also a 650cc twin midrange. What those in the industry know is that the customers are image and ego driven. Consider the loyal historic Benelli customer they did not want any association with anything they considered beneath them.
The superbike classification is for those that are pretty serious in reality and also for those with serious aspirations, sometimes they die in that.
I personally do not see any viable market for the types of bikes that Hero currently offers. They would have to offer the 250 and 650 only and they would have to be better than the competition. Not just the designs they would have to have excellent performers. Then they would have to have a national sales network. Buell could not develop that with their superbike, in order to show up in every market it requires allot of independents to be convinced, which mean you better demonstrate a very serious commitment to the market and products and also be prepared for the worst.
Before that could happen or attempted it would require some real numbers, we can see the competition in the 250 and 650 classes and also the costs. The target would be a significant portion of those sales. In that it requires being better and for less, but also to make the sale the profit to the dealers has to be highest as well.
That all translates into being prepared to show losses for several years on the balance sheets.
To be honest neither of the models that being the 250 single or the 650 twin Hastur is that confidence inspiring.
Attempting to sell the bikes they trademarked unfortunately would be futile, dealers will not embrace them because they know that they cannot sell them, they know that many would ridicule the bikes.
As for the 250 and the 650 they need to be more conventional looking, they need to be more design neutral. Honda had to do a quick recover on the CBR250R certain design elements were rejected, they adjusted that and also increased its performance.
The mistake was that Buell was too committed to Made in the USA, the 250 and 650 should have looked like the 1190RX
http://blogs.c.yimg.jp/res/blog-03-b...g_1?1389861693
and the SX
http://www.bikesindia.org/uploads/im...br-1190sx1.jpg
They should have had the 250 and 650 made in India and the 1190 made in the USA.
The partnership should have been for production, which is what others are doing.
The closest it came to that is the nose on the Hero Karizma looking like an EBR and disproportional so.
I would have thought that they would have developed the 250 single and 650 twin on the tracks? Then win some races and then bring that technology to the market with EBR models? But it looks like they got all caught up in weird design exercises?
EBR is filing for Chapter 128, that is what has been refereed to as an obscure law for the State of Wisconsin.
It is not the same as filing in federal court, it is like a loop hole in that state that offers a chance to restructure the debt interest free.
Even though I have a fondness for the Hero bikes, I am a realist and I do not see them selling here at all. The most realistic business model would be to bring the 250 single, 650 twin and 1190 to the market all at once and all under one single Brand and I would suggest EBR as the brand and for all markets.
If they are looking for investors they need to stop patronizing the client base that is often locked in conventional thinking. They also need to push back the CEO's and sell bikes stop selling ideals and dreams. Business is about selling products and making profits, to build a dealer network the bikes have to offer the best dealer margins and also beat the competition on retail prices and also meet all the tick lists of the consumers, the 1190 is not better then a CBR1000rr and it is being offered at a 4k premium and through a sparse network of dealers means that they spent too much on the wrong approach.
If it was made in India then offered there and here it have the opportunity to be a first, I would bet it could have come to all markets as a value leader Super Bike in all markets.
It seems to me that all these engineers that hooked their wagon to EBR would have seen that, The 1190 is not better then the 15k CBR100rr and cost more, it cost less then the Kawasaki H2 but it is not considered comparable to the H2, Kawasaki out reached the segment and has the distribution in place to get away with that and a well established sport bike following.
In order to retain an operation in Wisconsin, they would have to be more aggressive to seek profits and build financials that demonstrate growth and profitability. That is about dropping the self imposed limits and boundaries.
I fail to see how a failed business model could inspire any new investors, I believe that that Hero and EBR can and should re-embrace, it just has to be in a more more pragmatic way. In that there is no reason that EBR cannot have a special division that sells one off special made models, to high end clients but they have to have bread and butter to keep going year after year.
Hero even considering bringing a line of 150cc bikes to the US demonstrates that they have no clear realistic direction. Anyone pointing them in that direction in any encouraging way is serving them up an injustice.
Just to be clear if they introduce the 250 and 650 under the EBR brand those model would require cosmetic redesigns, they would sell well globally. Beating Honda and Kawasaki would be challenging, they already set up their low cost production centers and those are all backed by highly talented operations mangers.
Honda never offered the full line of models that came with its 223cc engine in the USA. They only offered the CRF230, they replaced that single offering of that engine, street legal offering, as they still sell the CRF230F here and for $4,199.00.
I would say they never brought any other models to the USA that utilized that 223cc single simply because they are all manufactured in Japan and in that the costs were too high. They replaced the CRF230 with their 249cc water cooled model that is now coming out of Thailand.
So Hero has an opportunity in that, they can bring a full line of models with that 223cc engine to the USA and market them at an affordable retail price. They would have to create new designs but basically follow the same design types as Honda.
Here is the thing though, they should increase the wheelbase over the Honda’s and make all the offerings 2-3” longer. They need to create an alternative design theme from that of the Honda’s they should be conservative in that, making conventional models that replicate the category of each of the Honda 223cc offerings, but not copies of the Honda designs. The same bikes would get a 125cc version for others markets, but in that they need to add EFI to those and the same tuning principals of the revised 223cc Hero developed.
Hero putting the Karizma on a pedestal as its flagship and that will not stand up well over time. It be better to make a line off that engine, they then could follow up that same principal for the 250 water cooled single, these singular offerings and all the hoopla is rubbish, mass production and lowered economy of scale and market penetration and collected growth should be the agenda.
I expected that the EBR’s "know how" will be used for developing some contemporary quater of a liter engine and "polish" frame, suspension and ergonomics to get bike/bikes competitive to the similiar bikes from the "Japanese Big Four", and then, to apply that same recipe for some twin-cylinder 500-650 cc bike. If you allow me to use some parallels from the automotive world, it would be more than enough if they ("Hero" and EBR) could make something like "Hyundai" or "Kia" on two wheels.
This EBR's super-duper bike was, in my opinion, overkill from the beginning. With enough money in my pocket, I will always chose bike from big and old brand company over one from the minor "underage" company. I mean, exclusivity and individuality are OK, but it has some bad sides, and I am sure that is not only my opinion. I understand that there are many of those who have a completely different opinion, but the question is whether they are sufficient to maintain a small company with its head above water.
Interview with Pawan Munjal, "Hero's" VP - http://moto-magazine.ru/community/tu...novykh-geroev/