so why did barret's find it unviable?

I don't think it is any more complicated than why have 2 distribution networks when you can have one.

Their distribution network is very good and fulfillment is very efficient and having a centralised parts system makes it possible to actually manage production much more efficiently too (i.e. Just-In-Time manufacturing).

Given the financial history of KTM over the last few year, they had to develop some stuff and we're now seeing the results.

I've also got to say that it has really surprised me how long KTM have continued to use "contracted out" distributors, especially those who also sell retail, but I wonder whether their move into the road bike world in order to drive growth has motivated some of their moves too.

Doing the Husaberg separate thing, although a different brand of course has always seemed a bit like Yamaha having a different network for just the YZ250, or something....

All the best,
Simon

RE: so why did barret

We can only speculate on the reasons for their decision but if I where to hazard a guess it would be that the outlook for the off-road business in the short run indicates a downturn.In almost every part of canada and the US there has been govt pressure and ever increasing restictions on the off road riding segment.Honda have reported a reduction of sales in the first quater in the US,Artic Cat has posted loses. Barrett have not just left Husaberg they also have left Gas Gas as they were the US distributor as well.A recent announement in Dealer news states that Troy Lee designs has gone in House in Canada with their own distributor,thanking BMG for the years they had put in building the troy Lee market in canada.
Possibly barretts felt this was the wrong time for them to be heavily invested in the off-road...you know that phrase..".if it dont make dollars,it dont make cents "

this has been my concern with Barrett, will Husaberg make them money? While Roy and others at BMG have been working hard on getting the bikes out there, it is still a question of money. I think to make money with Husaberg it will take a big investment, look at the WEC, that is the kind of presence that needs to be made here in USA in order to sell Husabergs. Will KTM make that investment? Even if they did, how long would it take to make a profit? Long term I think it would, but then I am a Husabergite! The other question is how long will mother KTM keep Husaberg around? I'm not sure of the numbers, but just for example, if KTM builds 4000 Husabergs each year, that's 8000 wheels, forks, 4000 shocks, ignitions, carbs, etc. they can sell that they have in stock already, plus with an exotic brand, they are not loosing so many KTM loyalist as they are gaining some people who want something different, win, win. But that is just my opinion.

bergy said:

this has been my concern with Barrett, will Husaberg make them money? While Roy and others at BMG have been working hard on getting the bikes out there, it is still a question of money. I think to make money with Husaberg it will take a big investment, look at the WEC, that is the kind of presence that needs to be made here in USA in order to sell Husabergs. Will KTM make that investment? Even if they did, how long would it take to make a profit? Long term I think it would, but then I am a Husabergite! The other question is how long will mother KTM keep Husaberg around? I'm not sure of the numbers, but just for example, if KTM builds 4000 Husabergs each year, that's 8000 wheels, forks, 4000 shocks, ignitions, carbs, etc. they can sell that they have in stock already, plus with an exotic brand, they are not loosing so many KTM loyalist as they are gaining some people who want something different, win, win. But that is just my opinion.

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All good points guys,

Keep in mind though that BMG dropped all of their mc stuff, not just Berg.

Further, KTM sells all the bikes they produce each year, or is it they only make so many and the demand is high so that all bikes get sold. That is exactly how I ended up with my 01 501. I was on 3 waiting lists to get a 520 and nobody had them, and they were getting top dollar for those KTM's. Meanwhile, there was three models of HBG's sitting right there. And as I found out, the Berg was/is the superior machine.

As far as reliability issues go, if I've said this once I've said it a hundred times. All the off road bikes have issues, ALL OF THEM. The reason why you don't is b/c the big boys glad hand the crap out of the mc rags so they don't print the bad stuff. Just one example, the original 250X's and R's for that matter were eating heads after 25 hours. 25 HOURS!!!! and you had to buy a completed head, less the cam. But the valves were gone, the seats beaten to a pulp and were unservicable. And Honda did nothing!!!! One more, this last year, Yamaha had to recall the lot of 250F's b/c the valves were bad, kudos to them for fixing and known problem. And another, how about the KXF's overheating problems, and ignition problems? Kawasaki did nothing.

Now look at people like Cheeseberger, 3,000 miles or 5000 klicks and 300 hours and has only had to replace the cam chain. Cheeseberger doesn't exactly ride his bikes easy either. I've got 2500 miles and 155 hours on my bike and have just kept up on my maintenance that's it. While the majority of those hours are not racing miles, I am no slouch and usually move right along.

Here's another angle as was mentioned in another post on the original thread about KTM taking over distribution. Rod Bush is no longer the man at KTM, rest his soul. It was no secret that he did not want to have to deal with HBG. So, maybe it was KTM who pulled the plug and decided that they wanted to get control back. IE it wasn't Barrett's decision. Ever consider that?

So while there might be some issues here or there relliability is a non issue.

Let's not forget the pressures of meeting environmental and EPA and DOT requirements. These are quite costly. Not being DOT legal definitly hurt sales. Times are changing, states are cranking down on getting plates on jsut any old 4T, and definitely stopping plated 2Ts, this puts pressure on the small mfgs to get their paperwork correct so that folks can't "slip thru" non-compliant models.

Since we are making wild speculations I'll take a stab at it. I would guess that BMG has gotten tired of promises of major revisions and cutting edge technology, but only receiving "Bold New Graphics". While I do appreciate the evolution rather than revolution approach, the bike is now on year eight of the new design. Nine if you count the frame. With this approach and not much hype being spread around I would suspect that sales are flat to slightly declining since 05-06. If KTM is not going to invest in the Marque how can they expect anyone else to?

http://www.ktm-x-bow.com/Car-Facts.625.0.html

Perhaps KTM is putting its energy and resources into its new car instead of Husaberg motorcycles.

Taffy said:

the best way to sell to a yank is to use another yank

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Couldn't have said it better myself.

I think that KTM taking over is going to be great.

That being said, I dont think that BMG did a "bad" job. Yes, there was some things they could have improved on, but all and all they did an acceptable job.

I have heard from very reliable sources that HSBs lineup is going to increase after 09 and dont be surprised to see an Adventure style bike coming really soon as well.

KTM is focusing on the 2 stroke market and I expect to see any new 4 strokes to appear as Bergs.

Who knows, maybe by 09 the entire world will have melted due to global warming, I say carpe ridem.

Let's ride whatever we've got now and let's stop worrying/hoping about the future.

Taffy said:

i hear ya! so i would still expect dealers to be offerd bothe marques on the showroom floor.

BUT, and boy it's a big BUTT (do yanks say that or i'm i the first to think of it! LOL!!!) history has shown that running your own distributorship abroad doesn't work either! the best way to sell to a yank is to use another yank and they have often mocked european efforts - especially the british - for doing so.

so while i agree with you simon i also think that you should know that there is a risk for one man to think (in austria) he knows it all!

Click to expand...

I've done quite a lot of business with the americans. For years I also reported in to a CEO sitting in Chicago for a global product I managed for him. I got to learn their quircky nature :wink: and it is pefectly possible to do very good business with americans even if you are not one - I was also involved in the set up of a new business in New York (I know, not strictly "American") that was fronted by us Englsih and Europeans. It did very well with rapid growth.

Combining distribution channels does not mean you can't use different points of sales and therefore differentiate the brands. They still get the benefits.

That said however, the fact that KTM are bringing the US distribution into their own confines deosn't mean they aren't using yanks to do it.

It's called localisation and every successful large corporation does it when they move into new territories or wants to grow there - use local knowledge.

Given the ability for KTM to drag itself from the brink of collapse to a corporation the size it is in 15 years is a pretty amazing story. To do that they know a thing or two. I don't think they think they know it all, but to us it may seem like that sometimes.

Another important consideration is the other business and financial advantages that having their own distributor might bring such as structuring most efficiently for tax for example which can be worth millions to a company like KTM. These are things we will simply never know - other than that it clearly makes sense to someone sitting in an office at KTM and probably their bankers and accountants too!

All the best,
Simon

this is a fun read.

it was time to throw in the towel. not saying we dont like a challenge, but this one has been difficult to justify. especially when sitting accross the room from other divisions with significant growth year after year. it comes down to do you put resources here, or do you put them somewhere else.

ktm will manage it well, hopefully it doesnt become the red headed step child as that was their fear in the past. i do believe that they will support dealers and throw resources at bulding the brand. ktm is a disciplined company, and have done a tremendous job in the past 10 years.

and now for me, bikes become fun again

cheers
jedi

Hey Josh...good to hear from you.So waht bike are you keeping for yourself?
How about this idea...can you get Freeplay to develop a batteryless off-raod headlight???

i will look into that bruce
maybe if we have a helmet light with a propeller to catch the wind as you go?

380, 450 and superduke

Scott said:

KTM is focusing on the 2 stroke market and I expect to see any new 4 strokes to appear as Bergs.

Click to expand...

:lol: :lol: :lol: Now THAT'S funny!Guess we'll soon be seeing all the MX teams riding Bergs 8)

Jedi said:

this is a fun read.

it was time to throw in the towel. not saying we dont like a challenge, but this one has been difficult to justify. especially when sitting accross the room from other divisions with significant growth year after year. it comes down to do you put resources here, or do you put them somewhere else.

ktm will manage it well, hopefully it doesnt become the red headed step child as that was their fear in the past. i do believe that they will support dealers and throw resources at bulding the brand. ktm is a disciplined company, and have done a tremendous job in the past 10 years.

and now for me, bikes become fun again

cheers
jedi

Click to expand...

Thanks Jedi,

I am glad you posted with your input. We are all grateful for making parts availability a non issue. Also, we have appreciated your great support to the brand. Enjoy your bikes and the best of luck to you!!

Dale

Josh it will not be the same no that things have changed,But the time I have spent
with you & your staff has been a gas & something that I will never forget!!

Thank you for everything & if you can say some good words for your loyal
dealer's it won't heart

Hope we see one another again soon, later Boss

I feel the same way Boss,my time with BMG was quite enjoyable, i will miss the "wheelin and dealin"with Roy Thomas and on occasaion Josh.It was fun times for sure!!

Boss,

Thank you for making things entertaining!! I find it quite frustrating that I did not do a ride with you guys this year. Maybe I will have to come out for your annual ride. Glad that you had the chance to come to the east coast.

Cheers