Ural Motorcycles begins buildout of vehicles, markets, dealer network

Publish Date: 
Oct 4, 2012
By Dennis Johnson

Ural Motorcycles sidecar redmondREDMOND, Wash. - Ural Motorcycles is one of the more improbable stories in the powersports world.

Here you have a Soviet-era sidecar motorcycle company manufacturing bikes in a sprawling factory at the base of the Ural Mountains in Irbit, Siberia. It's a motorcycle born in the vacuum of Communism and designed for the rugged roads of Russia — places where draft animals fear to tread.

To build a Ural, components must be procured and shipped to the remote factory in Irbit from suppliers on the other side of the globe. Most other parts are manufactured in-house, everything from spokes to fenders to engines, even the wheel weights for balancing the spoked wheels. The manufacturing process hasn't been updated in decades, nor has the machinery used, and the factory itself takes up a small sliver of a massive, once self-sufficient facility that occupies about 450 acres.

The bikes are then shipped to Germany, where they are sent by boat to New Jersey and then hauled via truck or rail to the company's U.S. headquarters in Redmond, Wash. The whole grassroots operation is run by a married pair of Russian expats and their skeleton crew of employees who oversee everything from engineering upgrades and homologation to spare parts supply and distribution.

Listenting to owner Ilya Khait tell his company's story, a person gets the sense that the once-state-run-company-turned-niche-bike-brand exists in spite of itself. And it's looking to grow.

Khait and wife Madina Merzhoeva have launched an effort to expand the company's U.S. network of 65 dealers and increase its audience beyond the diehard gear geeks who've always been drawn to the rugged bikes. They are touting Ural's uniqueness as a big dealer draw, a new way to pull in new customers. There's also the company's unique cash-only, no flooring model.

"We believe that in our particular case, traditional flooring model creates more risks than advantages," Khait explained. "In paying for the bikes with their own money, dealers behave more responsibly as far as inventory planning, less inclined to discounting." The company has also upgraded its spare parts supply and management.

Then they are reinventing the Ural brand by shedding history for a coat of Cordura. In other words, they're dropping the long-held World War II and Soviet imagery in favor of a flavor that more closely jibes with the brand's hardcore and newbie enthusiasts striking out for adventure on a machine reportedly built to beat holy hell out of the road and keep on going.

Off-road is not Ural's only home, the company said, adding that the sidecar bike has a growing fan base of urban riders who view the extra space as a practical alternative to an auto. And then there are those who just want something different.

"The goal for next year will be no more than 25 dealers … and it's going pretty well," Madina said. "We get a lot of multiline stores, and I think that after the recession a lot of dealers started to realize it's good to have a variety and it's worthwhile to have a specialty product. It doesn't compete with any other lines. We hope to bring new customers into Urals. I think for dealers it would be advantageous to have a different slice of customers and a different slice of audience to be brought into the store."

To meet the challenge, Ural has hired a full-time dealer development director and a dedicated marketing person — work previously done in-house. The team has revamped its website and started the branding transformation. Ural has even secured retail financing through Freedom Road Financial, a first in the company's history. Ural has signed up almost 40 new dealers in the last two years and began the push to reach newer audiences with unique marketing initiatives, a strong social media push and a new website.

PIVOTAL POINT. The company finds itself at a pivotal point in its storied history. To grow, there are obstacles to overcome. But how do you rebrand a company without losing the core? What's the best way to change old opinions or subvert a product's stereotype? How do you update (story continues)