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Discussion Starter #1 (Edited)
All:

I inquired about an MV today and the sales person said to me (sales manager) that no MV can be registered in CA presently? Since the Harley takeover the state is treating MV is if it were a new vendor, and that it could be three days or two weeks or a month until new vehicles could be registered and Harley legal was working on it. It sounded by the conversation that the bureaucratic process was in full swing.

This truely sounds like a post integration miscalculation on the part of Harley. Let's size this market shall we? You figure there are 300M people in the US and there are three persons to a household leaving 100M households in the US. Let's assume uniform distribution of households arcross 50 states and 1/8 of those households are in CA giving 12.2M households in CA or (times 3 persons to a household) gives 37.5M people in CA (pretty close to wikipedia pop for CA=36.5). Lets assume 2/3 of those 37.5M people actually are of the legal age to drive a car so that's 25M people in CA who are legally licensed and of those 25M licensed drivers, 2/3 of those actually own cars, so that's 16.6M car owners (legally licensed drivers who actually don't own cars, will most likely not own motorcycles). Of the 16.6M car drivers (assuming they all have licenses ie excluding illegal drivers) 1/10 of those own motorcycles, so thats 1.6M motorcycles, and finally of those 1.6M motorcylces in CA., 1/1000 are MV Agusta owners, that's 1600 MV owners in CA. Say for the average MV owner the upgrade cycle is 4 years as well as new entrants coming into the MV line (1600/4), means there is demand for 400 MV's every year for the state of CA. (lets assume demand is 100% of vehicles actually sold) that equates to 400 bikes a year across the state of CA (400/12 months) = 33 bikes per month -and let's assume the average price for an MV = Brutale + F4/17K + 24k/2 = 20.5K means revenue lost per month is 33 bikes times 20.5k = 683k per month. So Harley is loosing 683k a month in sales for the state of CA., not counting apparel. 33 bikes statewide per month / 7 MV dealers in CA is roughly 4.7 bikes per dealer per month or 96.6k in rev per dealer. Wew!

Current market conditions would cut the the 4.7 bikes per month number in half say to 2.3 bikes per dealer per month (48k). Harley should drag their feet-no wonder. legal fees at $300 per hour make this process take 6 months not to loose money in processing. I bet you this is really close! I accepted a job a few days ago moving to SFO from Chicago, and now I can stop playing these little quant games.

:conveyer:

-Best Perikles
 

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I wouldn't say no MV can be registered in California. I believe an out of state SPR just finished getting registered here..

The new MVs for california are going through the long process though but hopefully soon (as James would like to think...) :)
 

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Did you talk to a CA MV Agusta dealer? That doesn't sound right or up to date. I think the 312RR are now in CA showrooms so that issue may have already been resolved.
 

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Perikles, A dealer that does not have the bike you want will tell you anything to shift your attention to what he does have in stock. Not to worry HD has the resources to overcome California regulations, If they deam it profitable to do so. The sale of 50 bikes a year hardly seems worth the trouble. Maybe if low production manufactures stay away from Cal the folks in that state will demand reforms.
 

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Did you talk to a CA MV Agusta dealer? That doesn't sound right or up to date. I think the 312RR are now in CA showrooms so that issue may have already been resolved.

I stopped by Pro Italia today and they had a red/silver and black/white F4 312RR which were stunningly beautiful. Rick said they didn't have a deposit on one of them but couldn't sell them because of the DMV issues which was still being resolved.

Yikes! I'd be dying if my bike was in the shop room but could take it home due to some legal issue. Or, I'd be camping out in the dealership.
 

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Discussion Starter #6 (Edited)
Perikles, A dealer that does not have the bike you want will tell you anything to shift your attention to what he does have in stock. Not to worry HD has the resources to overcome California regulations, If they deam it profitable to do so. The sale of 50 bikes a year hardly seems worth the trouble. Maybe if low production manufactures stay away from Cal the folks in that state will demand reforms.
Tin Man 2: (I originally spoke with Monroe Motors)

Here are the numbers and URL from the article in the LA times: http://latimesblogs.latimes.com/uptospeed/2008/07/harley-davidson.html
MV Agusta, which makes about 6,000 motorcycles each year and sells almost 1,000 of those in North America, has also been in financial trouble, due to problems with the Italian banking system and a weak dollar that was eroding the company's profitability in its second most lucrative market -- the U.S. MV Agusta had planned to introduce as many as five new platforms in the next three years, several of them in entirely new market segments. MV's acquisition by Harley-Davidson means those platforms and models are more likely to proceed as planned.

My numbers in the previous market sizing exercise are correct. If we assume 2/3 of the 1000 bikes sold in North America (none sold in Canada and Mexico) are sold in CA (likely assumption for year-round seasonality) then 666 bikes/12 months = 55 bikes are sold per month divided by 7 MV dealers is 7.9 bikes per dealer and I said 4.7 bikes per dealer originally-paired back even further to 2.3 bikes due to the current recession. Not bad for back of the napkin.

HD knew these numbers at the acquisition table- that MV sold 1000 bikes in the North America and 6000 world wide and still paid $109M. And HD new that 2/3 of those 1000 bikes sold in North America were likely sold in CA for the reasons expressed above. So 55 bikes a month (an HD legal team of 3 at 300.00 per hour specifically assigned to this project). Even if the salaries don't add up, HD better get this mess settled. Mr. Gibbs (following post) went into Pro Italia to verify and saw a piece of new motorcycle art that no Californian can currently register-you can buy it- but you just can't register it, and thereby ride it! This is major mishap! HD should have taken care of the this during the acquisition phase (poor planning-not everyone acquires like Cisco Systems), so revenue streams from a new acquisition are seamless to the customer ie us. Someone from the post-integration or acquisition team should be fired. MV is vulnerable in loosing customers on the showroom floor. Switching costs are low to purchase other brands and dealers who carry multiple brands want bikes out the door, and will show no loyalty to pushing a specific exotic like MV. As you say, dealers will sell what they can get out the door in this market, leaving the MV brand out in the cold. Again, someone should be fired at HD! -Best Perikles
 

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Mr. Gibbs (following post) went into Pro Italia to verify and saw a piece of new motorcycle art that no Californian can currently register-you can buy it- but you just can't register it, and thereby ride it!
Actually, I saw two pieces. :) One already had a deposit on it so that would have been an easy sale that's still pending.

And I agree. Big mistake for not ironing the registration issue months ago. First, you have the months of delay in bringing the 1078s to the U.S when they were available in other countries a year ago. Now, you have the CA registration issue. I would have expected this from MV Agusta (since they're relatively small and assumbly low on the resources to know better) but I would have thought somene in Harley's Legal/Compliance departments or outside counsel would have caught this ("this" meaning you got through the entire process from acquistion to vehicles sales to accounting for profits).

And Tin Man is also right. A dealer would be more than happy to sell another bike to someone who's waiting for an MV Agusta. Case in point, I was about to order a left over 312R (which would take a week) but the dealer offerred me a better deal on a 1198 in the showroom which is one reason I went with the 1198.
 

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For what its worth: When I picked up my new Brutale at the dealer, the GM told me that only 80 MVs total will be imported into the US this year. He also stated that less than half were Brutales and even less were white ones like mine. I couldn't guess at how many of the 80 went to California. I saw only 3 at my dealership including mine and 2 beautiful F4s.
 

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H-D totally under estimated how long it would take to jump though the DMV hoops of CA (been on it for several months)...it's been like twenty plus years since they last went though the process and apparently, it's gotten much more difficult in those twenty years AND the guys at H-D who last jumped though said hoops (prob with Buell) are dead or gone. They will import a min of 80-100 bikes, but can and will do more if the demand is there.
 

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Before 2003, I remember Californians registering their MV's in nearby states to get around it not being CA legal. In Arizona, you could get a refund for your registrations. So, if someone really wanted to get their bike now, that may be an option if you have a friend in a nearby state. Then you can register it in CA as personal property and cancel your out-of-state registration.
 

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Why not just move out of California?......
 

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I think the problem (as it was explained to me) is that after HD took over CA's legislature considers MV Agusta a new manufacturer and must therefore jump through several hoops to be certified and allowed to sell motorcycles in CA. That's why there's a holdup on selling any new bikes that were built and delivered after the HD takeover.
 

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going to save my money and wait out the rsv4 standard due out next year. but in the meantime i'm going to buy some magnesium wheels for my 900ss sp!

best success
 

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All:

I inquired about an MV today and the sales person said to me (sales manager) that no MV can be registered in CA presently? Since the Harley takeover the state is treating MV is if it were a new vendor, and that it could be three days or two weeks or a month until new vehicles could be registered and Harley legal was working on it. It sounded by the conversation that the bureaucratic process was in full swing.

This truely sounds like a post integration miscalculation on the part of Harley. Let's size this market shall we? You figure there are 300M people in the US and there are three persons to a household leaving 100M households in the US. Let's assume uniform distribution of households arcross 50 states and 1/8 of those households are in CA giving 12.2M households in CA or (times 3 persons to a household) gives 37.5M people in CA (pretty close to wikipedia pop for CA=36.5). Lets assume 2/3 of those 37.5M people actually are of the legal age to drive a car so that's 25M people in CA who are legally licensed and of those 25M licensed drivers, 2/3 of those actually own cars, so that's 16.6M car owners (legally licensed drivers who actually don't own cars, will most likely not own motorcycles). Of the 16.6M car drivers (assuming they all have licenses ie excluding illegal drivers) 1/10 of those own motorcycles, so thats 1.6M motorcycles, and finally of those 1.6M motorcylces in CA., 1/1000 are MV Agusta owners, that's 1600 MV owners in CA. Say for the average MV owner the upgrade cycle is 4 years as well as new entrants coming into the MV line (1600/4), means there is demand for 400 MV's every year for the state of CA. (lets assume demand is 100% of vehicles actually sold) that equates to 400 bikes a year across the state of CA (400/12 months) = 33 bikes per month -and let's assume the average price for an MV = Brutale + F4/17K + 24k/2 = 20.5K means revenue lost per month is 33 bikes times 20.5k = 683k per month. So Harley is loosing 683k a month in sales for the state of CA., not counting apparel. 33 bikes statewide per month / 7 MV dealers in CA is roughly 4.7 bikes per dealer per month or 96.6k in rev per dealer. Wew!

Current market conditions would cut the the 4.7 bikes per month number in half say to 2.3 bikes per dealer per month (48k). Harley should drag their feet-no wonder. legal fees at $300 per hour make this process take 6 months not to loose money in processing. I bet you this is really close! I accepted a job a few days ago moving to SFO from Chicago, and now I can stop playing these little quant games.

:conveyer:

-Best Perikles
That's a lot of assumptions.

But, I didn't go to business school.

If you called HD or MV Agusta, would they release the break down of sales by state? Or is that some sort of confidential information?
 
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