Worried about changes to Indian in Australia? Don't be.

OPINION by Phil Heath 31/01/20

INDEPENDENT INDIAN DEALERS WILL THRIVE AND SUPPORT THE BRAND’S GROWTH

From reading the relevant features on motorbikewriter.com and other publications, it seems that Indian Motorcycle owners in Australia are concerned about ongoing support and servicing after the company-owned dealerships are closed.

I believe that there is no need for concern, and a quick look at the structures surrounding premium motorcycle brands, and the announcement from Indian, will explain it.

Premium brands can be so exclusive that their market penetration is minimal, eg Norton and MV Agusta, and for those brands there are stories of long ex-factory delays, for both motorcycles and parts. Perhaps the dealers for those brands are also wary…and to some extent rightly so…of placing small orders which attract large freight and import costs which cannot be amortised across a variety of products. And believe me, if those incoming costs are charged in full to the dealer’s customers, the complaints will be epic.

Like Harley-Davidson, however, Indian is not in that category. It’s a Premium brand across a broad market, as is BMW. The important difference between H-D and BMW as the dominant established premium brands, and Indian as the newcomer, is that the Polaris-owned, Springfield-built Indian is trying to cut deeply into a well-established and mature market.

Either Indian has to steal sales from H-D and BMW, or it needs to grow the market through demand for its own motorcycles. The road to achieving either, or both, of those targets utterly precludes “stranding” Indian owners as the dealerships evolve from factory-owned to individually owned.

If Indian leaves its current owners and customers feeling abandoned…well! We all know the tightness of the riding community, and the derogatory power of social media, so any negative word-of-mouth will spread like a disease. Obviously, Indian knows this too, and they cannot let it happen. Polaris is a huge corporation, and there is absolutely no doubt that they have plans already formulated to retain existing Indian owners, and to maintain (and grow) their current market position. The basics of these plans are in the announcement.

So, this brings us to the privately owned dealerships, and the “Dealer Agreements” which Indian will insist they sign. As a pedigree brand, Indian will appoint premium dealers who already offer first-rate customer service.

In years past, for some brand(s) in some countries (no names), it seemed that anyone with a toolbox and a backyard shed could be appointed as an Authorised Dealer. I’ve seen shed-out-the-back service departments with dirt floors, at major mass brand dealerships. That won’t happen now.

At the other extreme, some brands used to insist that their dealers become single-brand stores. That works fine in the USA, and in major cities in Australia and New Zealand, but the manufacturers were trying to talk the dealers into single-branding their stores in smaller, maybe rural, towns. In some areas the volume of a dealer’s income and sales is made from quads, farm bikes, and motocrossers…yet “Head Office” wanted the dealer to abandon all that and go to a single road bike brand. Sensibly, that approach seems to have been abandoned in the last 5 years or so.

So, as I said, Indian will appoint existing premium dealers and add Indian to the brand(s) those dealers now sell. Initially they’ll be looking in the big cities to directly replace the factory stores, and hopefully will move quickly into population centres such as Geelong, or Gold Coast. As they’ve announced, the intent is to double the dealer network in two years.

Indian will insist on dealer compliance in several major areas, and these contractual clauses will give current Indian owners confidence for the future:

· A separate Indian showroom, or dedicated area of a larger showroom, housing motorcycles, parts and accessories, riding gear, and casual clothing.

· Service department to have all current computing equipment, and Indian proprietary special tools.

· Indian factory-trained Technicians, required to remain up to date as new online and off-site training is needed.

· A requirement to stock a certain level of genuine parts and accessories, for current and (within reason) older model motorcycles.

· A requirement to stock a certain level of genuine rider equipment and casual clothing.

The bottom lines are these:

1) Talk of a “Secret Plan” exposed and “Industry shockwaves” is a bit overdone. For some years, New Zealand and many parts of Australia have already been serviced by quality, classy, privately-owned Indian dealers, and no other Indian market in the world has factory-owned dealerships. Australia is simply moving to the 'normal' model of distribution.

2) No other motorcycle brand in Aussie has factory-owned dealerships, so there’s no surprise in Indian moving out of that arrangement.

3) Everything now offered by the factory owned dealerships will be available at the independently owned dealerships.

4) Indian’s announcement says that the factory stores will remain open until independent dealers are ready to take over. Simply, I don’t see too many difficulties for current Indian owners.

Lastly, my hope is that the staff at the current dealerships, already trained in the ways of Indian, will be employed by the new stores.