SHIFTING GEARS, by Buzz Kanter, Publisher
I have no fear about motorcycling going away
This is our last issue of the year, so it’s a good time to look back and reflect on the motorcycle activity of the past year and to consider what we might experience in the new year.
As the editor in chief of this magazine (an honor I have held since 1991), I work hard to stay current on American motorcycles and the industry in general. While there are plenty of exciting new products regularly hitting the market, most business leaders are worried about the future of motorcycling. Nothing overwhelming, but we all face real issues and threats going forward.
Let’s not forget that Harley-Davidson and Indian are now producing some of the best motorcycles ever. Or that we have an ever-expanding choice in accessories and gear that we review in these pages. But the concern for the future of motorcycling is real. As the current riders gray out and leave the market, where is the next generation of riders coming from? I hear variations of this concern almost every day from dealers, manufacturers, and distributors across the motosport industry.
One very real factor threatening most industries today is financial over-leverage. A few years ago we saw a growing trend of hedge funds and other various money managers enter the motorcycle industry. They were paying top dollar to buy successful motorcycle product companies: manufacturers, distributors, and even some retailers. These outsiders would invest very little of their own cash, but load up on debt to pay for the acquisitions. The idea was to roll up these smaller independent companies, bringing MBA-style accounting and management run by professional managers (often from other industries) into larger operations. Usually the goal was to sell the more profitable companies a few years later for a great profit. These operators then typically move on to other industries to repeat their successes.
On paper this sounds clever. Streamline the businesses, remove inefficiencies, and increase profits before selling at great profit. But plans don’t always work. I want to see growth and success, I really do. But from what I am hearing, one of the industry’s largest, most highly leveraged roll-ups looks like it might soon crash and burn. I hope I am wrong. But we might see some highly respected brands change ownership, merge into other brands, or simply disappear.
So right sizing might be the operative words for 2018. I have no fear about motorcycling going away. But I am convinced that we have had too much supply and not enough demand for too long. That’s not good. Darwin got it right with his theory of natural selection. This might be the year the industry sees Darwinism in action.
I hate the idea that some good businesses (probably including more than one motorcycle magazine) and the great people associated with them might just … go away. So, how does that affect us at American Iron Magazine? We will continue to work hard and work smart to offer the best editorial and value as we always have. Thanks to our strong and supportive readers and advertisers, we are well positioned to move forward into the new year and beyond.
Our 2018 plans include 13 issues of American Iron Magazine, six issues of our all-tech/DIY American Iron Garage, and a few newsstand special issues, including the very popular American Iron Salute. Our readers can stay up to date on the latest motorcycles, products, skills, and info by subscribing to our magazines at www.AIMag.com or by calling 877/693-3572. A gift subscription (we are running a special BOGO—Buy One, Give One—promotion during December) to either or both magazines makes a great last-minute holiday gift.
Ride safe, ride smart, have fun.
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