The world of high-end anything caters to a very niche crowd. When you get into subjective products such as motorcycles, you slice the pie that much thinner. Now throw in passion and aesthetics and that piece you have is a thin sliver of a very skinny slice. At 15 years old, Big Dog Motorcycles finds itself all but alone in the market with that small sliver and it's poised and ready to gobble up the whole thing.
Compared to 10 years ago — heck even five years ago — the boutique American V-twin motorcycle market is in a very different place. The easy game has turned into sudden-death and competitors have dropped off the scene faster than you can spell BK.
Still treading through this heavy-duty industry shake-out, BDM is pushing into 2009 with its largest new product offering ever in an attempt to appeal to all tastes — and pocketbooks — across this section of the motorcycle buying public.
At a recent press launch of Big Dog's new lineup, company founder and CEO Sheldon Coleman says that while the industry as a whole is feeling the pinch, his company is still doing a low level of very steady business through a combination of consumer rebates and discounting. "The purchase flow has been very consistent and it really surprised us. We thought it might have dropped lower," Coleman says. He also notes that the company never got bogged down in the subprime mortgage mess that hit OEs such as Harley-Davidson.
With a broader spectrum of bikes, Big Dog is hoping to reach out to the subniches within its already small niched. The Wichita, Kan.-based company will now have seven models in its lineup — including the new X-Wedge-powered Wolf, the Coyote and the Bulldog — with MSRPs ranging from $23,900 to $37,900.
In explaining the the company's strategy, Coleman points out that within its customer base of buyers of boutique motorcycles, there are three tiers of consumers. The first is the risky credit crowd who had no business buying the bikes to begin with. The middle third are the undecided who can buy, but choose to wait. The final third are the hardcore, cult-like buyers who can afford anything they want to buy and aren't really affected by the larger economic woes.
It's these latter two that Big Dog is aiming for in the short term and further down the road when times are better.
"We're finding that while it's a smaller market at the higher end, it's a more consistent market because that person still has enough money. Whether they're going to spend $30,000 or $36,000 doesn't really shut the deal down," says Coleman, adding that many times these buyers are comparing the Big Dog bikes to $60,000 one-off customs. "There is rare air in our niche, but I think we're serving a consumer who can still buy and will be back strongly."
Coleman likened the approach to that of auto manufacturer Porsche, which focuses solely on making high-end, high-performance automobiles. Big Dog won't be getting into lower pricepoint
Coleman's optimism is tempered by the realities his company has faced over the last year or so, which have included layoffs and a reduction in production. At its peak in 2006, Big Dog employed more than 300 people and was building 5,000 motorcycles per year. While no official figures are available, it's estimated that those manufacturing numbers have dropped off dramatically. The company is estimated to currently have around 100 employees.
This drop in employment is seen as a weakness by Coleman. "Our company is smaller than it used to be," he says. "Any time you have sales falling off, you really end up with overhead quickly becoming a problem. Financially the company was much more fun in the the robust times. … We really are scrambling to get it back to equilibrium."
While there is some financing out there for those customers who need it — and, most customers finance, even if they have the cash, Coleman says — retail financing is going to be a big issue for the industry as a whole.
One antidote, he notes, is to source out forms of local financing by checking out credit unions and regional banks. "The dealer body has to make a very rapid shift from the national companies to really focus on the local and regional supply," he says.
While the economy and its attendant effect on the motorcycle industry are sure to get worse before things get better, Coleman says he's focusing on the future of the company by relying on its history of manufacturing reliable and fresh custom motorcycles.
The company will keep doing the same processes, offering good customer service, well-engineered motorcycles, while bringing fresh products to the marketplace, he says. "And now we're able to be at the reliability [we want] and get the more exotic design because we have more experience," he says. "We understand how to bring an exotiic look to a manufactured product."