State Of Play: Part 6, The Local Dealer
Where did you buy your first new bike? Was it from your trusted local dealer? The one who opens the doors 365 days a year, employs 20 or so staff, puts up with thousands of grubby hands pawing his new stock, and is entrusted with servicing and repairing your ultimate pride and joy? We bloody-well hope so!
They are our church, the sacred place where every few years (if you’re lucky) homage will be paid and our beloved motorbikes will be upgraded to newer, faster and more technical machines. With big leases, big staff overheads and concerns about customer purchasing, this Covid-19 bug was another stick in the spokes of our two-wheeled shrines around the country, but how are they faring, you ask? We caught up with Shane Place from KTM Newcastle to get the lay of the land.
Missed our other parts in this Covid-19 “State of Play” series? Check them out here;
- Part 1 – The Administrator
- Part 2 – The Promoter
- Part 3 – The Manufacturer
- Part 4 – The Race Team Manager
- Part 5 – The Distributor
What have been some of the immediate impacts on your business?
I would say the most immediate negative impacts were new bike sales; we had some new bike finance applications withdrawn due to people being unsure of their job security. On the flipside, second-hand bike purchases were up and parts sales were also quite strong in the early part of April. Online parts purchases were up for the month, however in-store accessories sales from mid-April onwards started to suffer.
How quickly did they come about?
Almost as soon as it was announced that there could be a possible lockdown, the business started to see changes in buying patterns. Late March, there was a spike in people repairing and restoring their bikes, while accessories and apparel suffered through the middle of April during the tightest of restrictions.
What is your current situation with staff and business operations in general?
During the month of April we allowed some staff members to take holidays and had a couple of staff members take leave without pay. As of right now, all staff members are back at work and also performing extra hours to keep up with demand. During the month of April, we also relocated the shop and in hindsight it couldn’t have come at a better time for us, with all the interruptions associated with a move we were able to get the move done with minimal impact. And just as restrictions began to ease, we opened at the new premises with a great reason to come in-store and spend a little time out of the house.
What initiatives are you/your business working on to adapt?
During April, we offered free pick-up and drop off of motorcycles for servicing and repairs. We also supplied and fitted tyres on-site and delivered parts to people to save them from leaving home. Due to the success and high demand, we are now working on a system to offer these types of services more often. We have also worked to improve our online store with different payment and pick-up options and improve the process and delivery times.
How have you been impacted by international markets?
At this stage, there has been very little impact from a supply standpoint. But we expect that will change in the near future. Some companies, due to currency exchange rates, have had to implement price rises and we expect there will be more to follow.
What do you see as the biggest challenges over the next six months?
Motorcycle riding in general is for enjoyment, so if there are more job losses and tightening of spending in the community, we would expect that it will have some impact on sales across the board. Getting back to racing and large numbers of people at events is also going to be very challenging. It is also very likely that the supply of certain parts and accessories will be delayed due to lack of production. The release of new motorcycles may also be pushed back.
How will this change the way you do business in the future?
At this stage, it is difficult to say until we see which changes that have been made during the pandemic stick around. We expect most things to go back to a similar state to what they were pre Covid-19 at some point. As mentioned, we will continue to offer more online purchase options and try to offer more services to locals regarding pick-up and drop-offs, etcetera. It has forced us to be even more flexible and customer focused, which is a good thing.
How do you see this all playing out before we return to some kind of normality?
I think at this stage, there is likely to be more small and medium businesses struggle to recover from the impacts of Covid-19 across many sectors. I would expect some more economic impacts once the JobKeeper and stimulus payments cease. I think we should start to see normal buying patterns return in the new year.
Any other thoughts about the wider moto community industry in general?
In a lot of ways, it has been a great time for people to reconnect with their love of all things motorcycles and riding. I think there are signs of the wider motorcycle industry receiving a much-needed boost. Also, the value and enjoyment of face-to-face contact with your local motorcycle shop and the ability to share your experiences have been great to see. People love riding and for most it’s their passion, so it has been great to see and hear stories of how many people are getting back in and supporting their local shops.