KTM Dealers Meet in Salt Lake City

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KTM dealers assembled in Salt Lake City for two days this week to learn of the manufacturer's future and inspect and ride numerous new and improved off- and on-road motorcycles and ATVs.

Monday, dealers heard KTM North America's plans for the coming year, took part in multiple breakout sessions, and gathered at bag manufacturer Ogio for a bit of evening fun. Tuesday, dealers suited up and had a chance to climb aboard and test KTM motorcycles and ATVs at nearby Miller Motorsports Park.

Among the vehicle highlights: the 1190 RC8 superbike, of which about 50 will be delivered to the U.S. this year, with a new, much larger batch set to arrive in January; arrival of the 690 family, highlighted by the road-going SMC supermoto; numerous changes to the off-road motorcycle line; and the expansion into four models of ATV: the 450 and 525 XC models, and the 450 and 505 SX models.

KTM's worldwide revenue for its fiscal third quarter was up 10.4 percent compared to last year's third quarter. However, the company says a depreciating dollar, greater R&D and facility expenses, and higher supplier costs combined to bring third quarter earnings down 70.3 percent in the comparable periods.

To combat the downward trend in earnings, KTM has implemented a program to become a leaner operation, save costs and adapt pricing. In the U.S., a part of that plan meant the recent layoff of 30 employees.

"The dollar has depreciated 28 percent since 2004, but our prices haven't gone up 28 percent, so we have to adapt, or change, our business strategy," KTM North America president Jon-Erik Burleson told dealers assembled in Salt Lake City. "As a result, we've had to make some tough decisions in the past six months. But we're tightening our belt, becoming lean and preparing for the fight.

"While others are battening down the hatches, we feel this is the time to get aggressive. This is the time, I say, we have to take action."

Part of the fight Burleson references is the company's rapid expansion into the on-road segment. While the U.S. off-road market has experienced a downturn — 16.6 percent during the past 12 months for the industry and 6.5 percent for KTM — "by balancing the street business, we get to play the ups and the downs," he says.

KTM has invested an incredible amount of funds during the past few years into the development of an expanded on-road product line. The OEM's latest U.S. streetbike entry is the 1190 RC8 superbike, powered by an 1148cc 75-degree V-twin producing 155hp at 10,000 rpm and 88.5 lb./ft. of torque at 8,000rpm. The product of three years of development, the RC8 is the most costly bike ever developed by KTM. MSRP for the 2008.5 1190 RC8 is $19,498. Pricing for '09 models has not been announced.

"The 1190 is so useable," one retailer told Dealernews after climbing off the bike at Miller Motorsports Park. "I'm a Ducati dealer, too, and the 1190 has quite a few points over the 1098. I think it's going to be a very, very good model for us."

"I wish we could have wicked it up a little more on the track, but I was really impressed (with the bike)," said another dealer. "It's great but, at that premium market their gunning for, it's not going to move like our GSX-R1000s."

Dealer Stock
"We have to adjust our production plan to the new market realities," Burleson said. "We don't want too much product in the market and we're concerned about dealer stock."

KTM HQ Moving
In other KTM news, KTM North America announced plans to move its corporate headquarters from Amherst, Ohio to Southern California. "If we want to be a player in the industry, we have to be where the market is strongest," Burleson said. Spare parts and customer service ops will remain in Ohio.

Outlook
KTM says it expects to sell about 95,000 units worldwide for its fiscal year, ending August 31. The OEM sold 90,306 bikes last year, up 7 percent from 83,985 units sold in the 2006 fiscal year.

"Be brave, be confident; together, we will make it," Burleson told dealers.