Tag Archives: imports

How will direct importing affect riders?

Ducati is the latest manufacturer to announce it will take over the direct import of its bikes into Australia from local company NF Importers next year.

It follows a similar announcement by KTM/Husqvarna earlier this year and Harley-Davidson about 15 years ago.

From next year there will be 11 direct importing manufacturers in our market and there could be more to follow.

So what does manufacturer direct importing mean for customers and dealers?

Retired industry veteran Stuart Strickland says there are both good and bad affects from direct manufacturer imports.

The 70-year-old has more than 40 years’ industry experience and was awarded an Order of Australia Medal in 2012 for his service to motorcycling. (See more career highlights at the end of this article.)

Affect on dealersDucati test ride demo motorcycle sales showroom selling motorcycles pace sales slide

“My introduction to the motorcycle industry was at Milledge Brothers. Alex Milledge had a great relationship with his dealers. He was a consistent entity as were his dealers,” Stuart says.

“Policy was straightforward and consistent. His door was open to his dealers and together they did well selling bikes he imported.”

Stuart says that when manufacturers move into direct importing, their policy is “not straightforward and corporate manoeuvres occur regularly”.

“Senior appointments often come from head office without local industry knowledge.

“Their emphasis is mainly on ‘moving iron’,” he says.

“Factories may force their subsidiaries to take numbers local management don’t want.”

Stuart also says there can be a lack of talent among the Australian staff.

“Locals who work for the manufacturers can be an issue as they don’t have any skin in the game and it’s rare to find one who has actually run a successful business,” he says.

“Dealers get frustrated with the constant changes and the regretfully incompetent representatives appointed by incompetent management. It creates havoc for dealers who work under a dictatorial franchise system.”

Stuart says manufacturers do not seem concerned about the business viability of dealers.

“Rarely does return on investment get discussed,” he says.

“Dealers are issued with constant franchise breaches which are used to intimidate and wear down resistance to policy that is often unfair.” 

Cheaper bikes?sell buy test ride demo motorcycle sales showroom selling motorcycles regrets

Pricing motorcycles can be a complex issue for the direct importer, Stuart says.

One of the most vexing points for importers are the tax implications.

He says the tax office in the manufacturer’s home country as well as the export country each want their fair share of the manufacturer’s revenue.

“It’s easy for manufacturers to set pricing so they make more profit in their home country than in the subsidiaries countries,” he says.

“But the tax offices are on to this. They compare revenue and tax with like businesses and if they believe there is anything irregular there can be heavy fines.”

Stuart says exchange rates also have a huge impact on retail pricing.

“A weak Australia dollar is great for exporters but bad news for importers,” he says.

“No manufacturer wants to be sitting on piles of obsolete or uncompetitive models, impeding financial competence.”

He says there are many factors influencing retail price and buyers should be wary of manufacturers who get the local release price wrong.

This can result in massive discounting when the model fails to sell at a too-high price.

“This can have a huge impact on resale and trade values,” Stuart says.

Model choicemotorcycle sales showroom selling motorcycles blunt

Australia’s market size also has issues for direct importers on which models to import.

“A great degree of skill is required to pick models that the buyers want and more skill to price it right at introduction,” he says.

“Australia has very little if no influence on model development and currently sits in 32nd place in terms of volume in the world.”

However, he says companies such as Honda which he worked for have been able to use Australia to test new models.

“If they can get it wrong here, there isn’t too much global impact on the company.

“Although it’s not big, Australia is a sophisticated market, so it’s an excellent place to trial things.”

More direct imports?

Will more manufacturers decide to take over their own imports?

“There has to be a tipping point where they show interest,” Stuart says.

Ducati sold less than 2000 last year and the only brand with more sales that is not directly imported is Triumph (2122).

“Triumph would have to be having a look at it,” Stuart says.

“It all comes back to what the parent company is doing and whether they are interested in investing money and staff in Australia.”

Stuart Strickland, OAM, career highlights

Stuart Strickland blunt criticism
Stuart in the ’80s

  • Motor Trades Association of Australia executive chairman Australian Motorcycle Dealers Association from 2014 to his retirement last month;
  • Chairman of the Motorcycle Division of the Federal Chamber of Automotive Industries and life member since 2007;
  • Victorian Motorcycle Advisory Council board member;
  • Australian Scooter Federation co-founder;
  • Ulysses Club member from 1990;
  • Honda Australia MPE managing director 2005-2010, executive 1990-2010 and employee 1981-1990;
  • Honda Australia Rider Training program co-developer 1989;
  • Victorian Automobile Chamber of Commerce motorcycle chair;
  • Director and Board Member, Motorcycling Australia from 2011;
  • Milledge Brothers parts and general manager 1971-81.

Source: MotorbikeWriter.com

Will Ducati direct imports mean cheaper bikes?

Ducati fans want to know if the company taking over its own Australian and New Zealand imports and distribution from NF Importers in April 2020 will lead to cheaper bikes.

This follows a similar move by the KTM factory in June to import and distribute KTM and Husqvarna motorcycles.

That has not led to cheaper bikes from KTM.

However, in June Husqvarna offered massive discounts on the 401 and 701 Svartpilen and Vitpilen motorcycles of up to $7000!

Husqvarna Vitpilen 701 imports
Husqvarna Vitpilen 701 doen $7000 to $9995

Our industry sources say Ducati price cuts are not likely, especially given the current falling dollar.

Instead, they say the advantage for riders is that brands going the subsidiary route will offer better service, better parts supply and a “cleaner corporate message”.

So who’s next? Triumph? MV Agusta? Royal Enfield?

Our industry sources say all these manufacturers must be watching closely to see how the Ducati model works.

After all, the biggest margins are made at the distribution level so there is a lot for them to gain.

And what they want most is control.

Factory imports

Of the major brands, all Japanese are distributed here by the manufacturers, as well as BMW, Harley-Davidson and Indian.

The biggest takeover of Australian distribution was when Harley-Davidson grabbed the reins in the early 2000s.

Harley was selling well before the factory took the market over so the only advantage has been market coordination and corporate profile.

They certainly didn’t offer massive discounts. In fact, they held the profit margins high for dealers and have only recently offered discounts on slow sellers in this current sales slump.

NF Importers

NF Importers has distributed Ducati for 55 years and done a pretty good job.

Managing director Warren Fraser says they have put 55,000 Ducatis into Aussie and Kiwi garages since 1964.

In fact, Australia has the biggest per-capita ownership of Ducatis outside Italy.

The company, and particularly CEO Warren Lees, developed a great working relationship with the factory.

Warren was even able to twist Ducati’s arm to produce a 659 Monster just for Australia and New Zealand to suit our learner-approved motorcycle scheme.

Ducati Monster 659 motorcycle sales imports
Ducati’s learner-approved Monster 659

The writing was perhaps on the wall for NF Importers when Warren retired a year ago.

The new Australian Ducati subsidiary will be led by Sergi Canovas, who has been the company’s managing director in India for the past three years.

He introduced the brand to the sub-continent and sales rocketed more than 20% in the first year.

Ducati also developed several new dealerships in India, including the world’s largest Ducati store in New Delhi.

Main brands and distributors in Australia

Brand Distributor
Aprilia PS Importers
Benelli Urban Moto Imports
BRP/Can-Am BRP/Can-Am
CFMoto Mojo Motorcycles
Ducati Ducati (2020)
Harley-Davidson Harley-Davidson
Honda Honda
Husqvarna KTM
Hyosung PS Importers
Indian Indian
Kawasaki Kawasaki
Kymco Mojo Motorcycles
Moto Guzzi PS Importers
MV Agusta Urban Moto Imports
Norton Brisbane Motorcycles
Piaggio PS Importers
Royal Enfield Urban Moto Imports
Sherco Mojo Motorcycles
Suzuki Suzuki
SWM Mojo Motorcycles
Triumph PS Importers
Ural Ural Australia
Vespa PS Importers
Yamaha Yamaha

Source: MotorbikeWriter.com

Braaap Wholesale faces import penalty

Small-capacity motorcycle wholesale business Braaap Wholesale has gone into liquidation and faces penalties over breaching import regulations.

Braaap Wholesale is the wholesale arm of Braaap Motorcycles which is still operating.

Braaap founder and Braaap Wholesale director Brad Smith and general manager Toby Wilkins pleaded guilty in Launceston Magistrate Court this week to six counts of approval for the placement of identification plates and three counts of importation of vehicles requiring modification

It stems from the import of 82 motorcycles from China in 2016 which were fitted with plates.

Braaap Wholesale took a deposit from a NSW company for the bikes and shipped them to him pending a Department of Infrastructure, Regional Development and Cities audit.

An audit of Braaap Wholesale’s Victorian and Tasmanian warehouses also found bikes fitted with parts not specified on the Identification Plate Approval, including having different head lamps, direction indicators, and back and rear break pads. 

Braaap Wholesale’s defence lawyer told court that although the equipment didn’t comply with the Identification Plate Approval (IPA), it complied with Australian Design Rules. 

Magistrate Ken Stanton will hand down his sentence on March 19. 

Toby says he would “prefer not to add personal comment while it’s still before the courts”.

“I can say though – Braaap has the upmost respect for DIRD and the Motor Vehicles Act and have worked tirelessly with the department over the past few years to ensure compliance is met and exceeded,” he says.

“It’s also important for people to be aware that there was no risk to public safety with any of the issues identified.

“The issues before the court were issues that were identified prior to vehicles being released to market and once all relevant checks had been performed the vehicles and parts in question were found to be in accordance with the ADRs and passed.”

Braaap Wholesale

Braap Moto 3
Braaap Moto 3

Toby points out that the entity tied to this issue is not Braaap Motorcycles, but Braaap Wholesale which has been a non-trading entity for some time and went into liquidation in August 2018.

“I’m still with Braaap and we are forging forward,” he says.

“Braaap Wholesale was the wholesale arm of the company that dealt with IPAs and dealers etc.

“Due to the past few years it’s paid its toll on this entity. We are working with the administrators though and plan to pull it back out of liquidation.

“Braaap is still trading and Braaap Frankston is still open, Braaap Vietnam has also been launched and they will have bikes shortly (just finishing off emissions testing). 

Braaap history

Braaap fraud
Braaap ST-250 recalled

In 2005, at the age of 17, Brad sourced factories in China to make bikes to his specifications.

He was named 2008 Australian Young Entrepreneur of the Year and Tasmania’s Young Australian of the Year in 2010 while the company won the Australian Ret­ailers Association’s Small Business of the Year four times.

In 2017, Braaap released a range of new models and in 2018 introduced the electric MotoE electric motorcycle.

Braaap MotoE electric motorcycle
Braaap MotoE electric motorcycle

Source: MotorbikeWriter.com