Trade in a State

The opening article in the first issue was called Running Out Of Customers and rather upset the trade. Kevin Kelly, Director of Motorcycle Services Motor Agents Association presents his view.

When I complained to the editors of the USED MOTORCYCLE GUIDE that they were less than kind to the bike trade in their first issue, I was offered editorial space to express some views on the current state of the trade. As you can see TRADE IN A STATE is the title I have selected for this opportunity. Regrettably, this title is accurate as well as ironic.

Motorcycle dealers are enthusiasts. That's what makes them take up business in the first place and why they are so different from their car cousins. But they are vulnerable to the same commercial whims from their suppliers, particularly the pressure to accept stock and shift it at all costs. This is one of the reasons for the parlous condition which the trade finds itself in this year.

In fact it is interesting that the car trade is currently experiencing the self same problems that have recently beset the motorcycle trade and which it is only just recovering from. An over supply of products in the early 1980s resulted in suicidal discounting, reduced resale value of machines, dealers fighting tooth and nail for survival and unhappy customers.
 
In 1980 315000 new machines were registered, a near all-time record. However, by 1986 the total is unlikely to be more than 107000 registrations, a drop of almost 70 per cent.

The figures for 1980 were in fact achieved as a result of the UK market being flooded with products. In their anxiety to retain market share, and to shift stock, vicious price cutting took place and additional dealers were appointed, sometimes literally next door to existing ones.

For the customer this may seem superficially attractive. A wide selection of bikes at a relatively cheap price and a choice of dealers to purchase from. But put yourself in the place of the trade. A dealer cannot stop selling bikes for long. He has bills to pay, he has wages to pay. If he decides to stand back from the price war and retain his profit margin as far as he is able then he needs extra financing. There simply comes a point when he needs to create cash flow or go bust. Not the biker's problem you may suggest but remember, the fewer dealers that exist to supply the requirements of the enthusiast then the more inconvenient life is for the enthusiast. There has to be a healthy compromise.

The real experience of suicidal trading, without sufficient profit, meant that dealers went bankrupt on a large scale. Frequent model changes added to those problems and shell-shocked customers saw their recently acquired new machines devalued, literally overnight.

Only when customer demand for inexpensive machines boosted the sale of used machines did the situation begin to improve. Dealers adapted to the demand and manufacturers saw their new sales reducing and began to cut model ranges and reduce dealer appointments. Now they are even admitting in public that dealers must make a profit in order to stay in business, to re-invest in new equipment and to provide a good service to customers. Admittedly, some dealers deserve to go to the wall.

They took customers for a ride and the whole trade suffered in the process. A few may still think that they can treat customers as second rate citizens, but most have learned important lessons. Satisfying customers is what any retail business is about. Retailers and dealers in any industry that fail to adhere to the maxim that the Customer Is King must have a limited future. Providing the customer with a fair deal is not merely a marketing gimmick, but these days the very means of staying in business.

Certainly as far as trade standards are concerned we are seeing a consistently improving situation in terms of both sales and service satisfaction from the legitimate motorcycle trade.

Many dealers are members of the Motor Agents Association/ Retailers Association (MAA/ MRA) which is of special interest to the customer since dealers are obliged to adhere to the Motorcycle Code of Practice. This lays down strict standards in respect of sales, servicing and repairs.

Customers who have a genuine complaint should first of all take the matter up with the management of the company they are dealing with. However, if that fails and the company is in membership of the MAA/MRA, then the customer has the option of invoking the assistance of the MAA Conciliation Service.

This organisation can be contacted at the following address:— MAA Conciliation Service, 73 Park St., Bristol BS1 5PS (tel. 0272 293232).

Remember, disgruntled customers who do not bother to complain to the right people only have themselves to blame. Standards can only be improved if the trade is in full possession of all of the facts. But on the credit side the situation is surely much better than the USED MOTORCYCLE GUIDE previously suggested. The motorcycle trade really is run by enthusiasts for enthusiasts. Certainly the trade has to make a profit otherwise it would not exist but fair  dealing is the name of the game.

Finally, there are some things customers get up to which would make your hair curl. But that's another story...

Kevin Kelly