Bankruptcy by Major Aftermarket Motorcycle Industry Conglomerate

https://www.asphaltandrubber.com/news/motorcycle-aftermarket-group-mag-chapter-11-refinance/#more-146707

Motorcycle Aftermarket Group, a conglomerate of accessory manufacturers, has filed for reorganization. That means that the products won't necessarily go away but the debt associated with the companies that make them will be discounted and some assets may be sold according to secured creditor priorities and then according to unsecured creditor committee consensus, all subject to court supervision.

Performance Machine, Renthal, Roland Sands, Tucker Rocky and others are subsidiaries of MAG.

I wouldn't be too concerned. Since the 1980's corporate bankruptcies have been an exercise in debt repay avoidance and quick reorganization under a new name. Performance Machine is Roland Sands' father Perry's company. Sounds like the viable concerns are separating themselves from the not-so-viable. The whole motorcycle industry is in the midst of a downhill slide, so it's no surprise that aftermarket companies are struggling.

I think Tucker/Rocky made a mistake hooking up with Sands.

I thought Rocky screwed up when they sold out to Tucker. The trend is for stronger corporations to swallow smaller ones, sometimes acquiring little more than a brand name. Problems arise when people outside a particular industry take over a segment of a market they are not familiar with and may have little enthusiasm for.

Common result of conglomeration, a misallocation of capital enabled by Fed's low rates/easy money.

Fiat bought Chrysler for it's dealer network. The rest was a booby prize, business-wise. The head guy at Fiat stated the problems were caused by management and not the workforce, which goes against conventional wisdom, but the conglomerate is now humming along. Without that takeover (and bailout), Chrysler would have gone the way of the carrier pigeon and the dodo bird.

Motorcycles are a much different market. In the (formerly) largest motorcycle market, the USA, motorcycles are a luxury item and a hobbyist/enthusiast niche market. Everywhere else in the world, they are basic transportation, especially for the 3rd-world nations. And they are still basic transportation in Europe, ostensibly due to starting out that way years ago. It's good to see the Stuart Garners, the John Bloors and Polaris resurrecting these defunct brands and giving them new life with high-quality products. We all wish they had remained and survived intact, but if you don't take care of business, business will take care of you.

Demographics and a decline in the purchasing power of the dollar relative to the yen also are factors.

The MC industry made a killing in the '60s and 70's, capturing two generations of life long consumers but now those riders are going away and in the meantime the industry failed to capture a sufficient share of the following generations. Dealers have been closing for ten years.

My opinion is that the industry should have nurtured its future market with high gas mileage modest 125cc loss leaders sold at prices affordable to late teens and twenty some things. Remember the CB100?

Last I looked into it, that type of bike is sold all over the third world at around $2K or less. Typically, they are air cooled, two valve, mechanical disc brake. Perfect to get to high school or the junior college or a first job. At 5%, 24 month, OTD could be under $100/mo.

I’m not so sure John. Bikes like you suggest do exist. But in the West they don’t sell so well because the young ones don’t want them. They either want a car, or a bike that’s way cooler than what you suggest.

Their parents think they all want to go 200 mph and are not receptive to the idea of little junior riding one of those awful, loud motorcycles to school. Let's buy him a Hyundai instead. Think of the younger folks in your own extended family-do they ride? Of do they subscribe to the old horror stories about 'murdercycles' and 'donorcycles"?

My wife says there aren't any real men being raised nowadays. In my day the boys all had testosterone poisoning and wanted to go 200 mph. Now the young girls are the fast drivers. Everything's opposite for the sake of being opposite.

yep, young men -and women- are not riding so much these days... I wish things were different, but life is full of broken dreams! at 60, I still feel like I have another 10 or more to go, maybe I can inspire a young cat or kitty to buy my old thang.... the older buyers are fewer and farther

True comments.

Still, nothing ventured, nothing gained. The industry has been riding the rising purchasing power of the converts of the 60's and 70's for 50 years now and it has failed to invest in cultivation of the generations that followed.

Offer and market, sell, a high gas mileage low cost loss leader! Get those kids into the show rooms, up sell them now or later. Four and five thousand dollar Ninjas and CB300s are on the same dealer/manufacturer price/cost structure as the top of the line bikes. Bad idea.

In some ways you are right but here in Australia the young ones are still getting into bikes, motocross and dirt bikes are selling like hot cakes here and alway will be ever sinse I was young, most progress to road bikes as they get older and can get their licences, but they have made it here harder to get a bike licence they can get a learner permit at 16 for a car do 100 hours driving and get their car licences when you they turn 17 but they have to have their car licence for one year before they can get a bike licence, they can get their bike licence earlier if they were a member of a jouiour motorcycle club riding dirt bikes, but most just ride bikes in the bush.
The young ones that get into road bikes usualy buy second hand wiz bang Jap bikes because the price of buying new bikes with our high taxes on new cars and bikes is beyond their means, but there is more young ones getting killed in their hi powered cars than on motorcycles, plus they take their friends with them.
Motorcycle dealerships for new and used bikes is big business as well as the private bike sales is big here in Australia and I can't see that changing.

Ashley

If you survive the experience, riding a motorcycle is a good way to become a competent driver. Only one of my three kids rode a motorcycle - they are all competent drivers because my wife taught them. She used to pick up new cars at the wharves and deliver them to the dealers, so she knew how to drive fast and stay alive. I'm not a competent car driver because I get bored doing it.

Evel Knieval once said, "A motorcycle rider is potentially the safest driver on the road. He doesn't have one arm around his girlfriend and he's paying attention to what he's doing and not playing with the radio like car drivers."

And that was a long time before cell phones.

And at most his machine weighs 600 pounds, compared to a minimum of 2500 for a small car.

I did not have a car license until I was 21 because I always rode motorcycles. I have a real problem because I am conditioned to watch the road surface for slippery patches. My wife is a fast driver, quite often I sit in the passenger seat beside her and cringe as she comes braking up behind other cars at traffic lights very fast. She has total disregard for the shiny patches of bitumen on the road in front of her. I don't think she has ever had the experience of being forced to pull her foot off the brake after losing traction.