JT's Strategy Recommendation for Suzuki

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5/11/2020 10:55 AM

I listened to most of JT’s latest Industry Seating podcast on the way to work this morning and he addressed a question he got about how Suzuki should move forward. His thought matched something I’ve thought about for a long time which was for them to forego development and focus on reducing production costs to create a $5-$6K four stroke MX bike. He noted they could reduce marketing, product development, etc. and match an unserved market for those that want new bikes but do not want to spend $8-$10K on a new bike.
Suzuki could drive BNG's and reduced production costs (which they kind of do already) but then focus on volume. While he believes it will never happen because Suzuki would have to swallow their pride about being second tier, I think it’s a great plan. I for one would switch to Suzuki if this were to happen just because I value having a fresh machine regularly. You would also get a lot of traffic into Suzuki dealers and make up a lot on volume. While the price target seems low, many of the year-end promotions get close to this value, so it doesn’t seem impossible.

Do you agree this would be a good route for Suzuki to go?

Also, as an FYI JT mentioned he ignored the two stroke topic because “everyone agrees it would be awesome”. Finally, Industry Seating is a really good podcast if you aren’t listening weekly.

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5/11/2020 11:12 AM

didnt listen to the podcast but will now.

i think JT is largely correct and i believe he has unique insight into the sport as hes part of Fly Racing and can see the sales #'s for gear and whose buying it.

this is a sport for working/middle class people and the core demographic of people who ride are being priced out, big time.

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5/11/2020 11:20 AM

I've said it before and I'll say it again. If it wasn't for the fact that i got my yz250f for 6200 otd. Plus a hell of a deal on some other stuff there and some freebies I was fully commit to buying a rm250 and maybe 450 with plans of making the 250 a practice bike the next year and new race bike and just rotate the practice bikes.

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5/11/2020 11:28 AM

Quite a few Zook riders here already told us they bought a brand new RMZ for 6 grand.

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5/11/2020 11:41 AM

GODZILLA wrote:

Quite a few Zook riders here already told us they bought a brand new RMZ for 6 grand.

Yes, just bought my 2020 RMZ450 3 weeks ago for $6183 otd. I'll kickstart the bike for that price

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5/11/2020 11:44 AM
Edited Date/Time: 5/11/2020 11:51 AM

They already do produce 5k to 6k motocross bikes. That's basically where an RMZ250 is after factory rebate. I do think they should drop the "rebate" and just make it included in the sticker.

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5/11/2020 11:50 AM

I like the idea, but then again, Suzuki has the DRZ 400 dual sport that hasn't changed in a decade or two, and they want way too much for those for what they are technologically. I think Suzuki's view of appropriate pricing for basic technology would not mesh with the customer's view.

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5/11/2020 11:54 AM

It's reasonable hypothesis but fact is there is already an abundance of discount RMZs available.

This type of buyer is also reasonably well-served with the used bike market.

Clearly they need to do something. Can't see them investing in electric at this stage. I think they were onto something with their modular frame concept for 250Fs and 125s awhile back.

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5/11/2020 11:59 AM

An RM125 for 5500 would be pretty cool!

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5/11/2020 12:04 PM

100% it is a great idea to corner that market and be a stepping stone brand. Sometimes when you start on brand "XYZ" you become a lifelong fan. To me (In the USA), Suzuki is an entry vehicle brand, so it's not that far off...

Suzuki Vitara MSRP $22,500
Photo

LandRover Discovery Sport MSRP $37,800
Photo

KTM 250 SX-F MSRP $9,100
Photo

Suzuki RMZ250 Could MSRP be $4,500-$5,000????
Photo

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5/11/2020 12:08 PM

This quote was from 2016/2017
"Suzuki Motor is a Japanese manufacturing company that offers automobiles, motorcycles, ATVs, and other products. Much of the company's revenue was generated from the automobile segment in 2016, with USD 25.38 billion, which is about 90.5% of its total revenue. The motorcycle segment generated 7.4% of the revenue in 2016, and the remaining was accounted for by marine and power products."

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5/11/2020 12:08 PM

It seems like they are already doing that. You can get a new 2020 RMZ250 for $2k less than a 2020 YZ250 two-stroke in my area. Seems like the RMZs are second-tier bikes already (I'm a Suzuki guy).

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5/11/2020 12:23 PM

Yamaha needs to do that with their two stroke line.

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Alright Lunger, Let's Do It

5/11/2020 12:32 PM

Johnny Ringo wrote:

Yamaha needs to do that with their two stroke line.

Agreed and have suggested that in the past too.

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5/11/2020 12:43 PM

A world wide company with 375 Billion - yes Billion- yen in revenue
...and Jason thinks he's got a recommendation -----LOL!

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5/11/2020 12:45 PM

I think making cheap bikes sounds good in theory, but admitting your bike isn't great is not the best advertisement to sell more bikes. Remember when everyone pushed Apple to make a cheap iPhone? Yeah, it barely made any money, and then they started making even more expensive phones and racking in the profit.

Right now, Suzuki sort of has it both ways, claiming to make a great MX bike, but selling it cheaper after rebates. If they drop the price and stop the R&D, I doubt they make up lost profits on volume. People on budgets usually finance bikes anyways, and the finance rates are so low, they can probably get a RMZ250 for 150 a month, or a YZ250F for 170 a month.

I think Suzuki is in a weird place of having too much pride to do this anyways, but not enough pride to dump a bunch of money into the line. Admitting your product isn't great usually isn't a great move!

If I were Suzuki, I would invest a some in R&D so the bike doesn't age too much, but still keeping costs / weight down by doing things like not doing electric start. They come out with new bikes that handle well, which they can claim are new / great, but they aren't spending a ton to develop and produce them, so they can sell for less.

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5/11/2020 12:46 PM

Sharc wrote:

A world wide company with 375 Billion - yes Billion- yen in revenue
...and Jason thinks he's got a recommendation -----LOL!

Given their size and product line, he's honestly probably thought about it more than the people at Suzuki.

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5/11/2020 12:58 PM

Sharc wrote:

A world wide company with 375 Billion - yes Billion- yen in revenue
...and Jason thinks he's got a recommendation -----LOL!

sandtrack315 wrote:

Given their size and product line, he's honestly probably thought about it more than the people at Suzuki.

Funny stuff -!!!!

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5/11/2020 1:02 PM

I listened to JTs pod as well on the drive to work and agree its a good podcast. I was actually super pumped this morning to have a fresh podcast to start the week with since I burned up all my saved ones this weekend in the garage.

However I don't think this plan would work for an MX bike. Even if they don't need it, it seems like most MX guys dream of having the newest, latest, greatest bike, with all the features, power, and whatever trinkets they sell it with. Obviously not everyone can afford these overpriced spectacles, but thats where the used market kicks in. Just wait a couple years and that bike can be yours, and thats what Suzuki in essence would be competing with. Yeah that factory edition bike isn't brand new anymore, but if you find one well maintained at the same price as a second tier bike brand new which would you buy? Also at least around me RMZ450s are already smokin good deals at the dealership, yet last weekend when I rode at the track out of probably 80 bikes 1 was a Suzuki.

Ping had a good idea a few years back on just pull cost out where it doesn't matter to get the MSRP reasonable. His point was specifically on entry level 125 and 250 smokers I think but the point carries over to any bike. Build a good engine, and chassis, those things are expensive and harder to mod so just make sure they are legit from the factory. Then go cheap where it doesn't matter. Cheap bars, grips, tires, whatever. These are all things that are common mods anyways so it gets the price down at the dealer, and then lets you customize it the way you want it.

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5/11/2020 1:47 PM

One has to wonder, of all MX bikes sold, how many go to buyers who will never race MX or only rarely do so - about 9 out of 10 used MX bikes for sale say, never raced, right?

MX is mostly a young mans sport. I'd venture to guess that many get to the point where they can give up the racing, but not riding the bikes (I'm one of them).

So for many of us it's like, sure I want all the latest bells & whistles, but how much will that really matter for the riding that I do? And I can save how much, by going with one of the lesser developed models?

There is a market for bikes that the manufacturer has basically said - good enough - YZ125s & YZ250 still sell well, right?

Suzuki could just be playing the risk/reward game and figure they don't want to invest a bunch to sell not that many more bikes.

Admitting 2nd tier status I'm sure isn't the positive part of the picture. But you can't forgo development for years & then deny you've fallen behind.

I'd hate to see Suzuki MX/SX teams go away, though.

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2016 YZ250X

5/11/2020 1:54 PM

Start selling 350s also. If I could get a new 350 about every 3 years I'd probably go for it.

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5/11/2020 3:40 PM

To all the people saying "Suzuki's are already 6K" I think the intention was that the msrp would be around 5-6K and then the rebates for 'last years stock' would bring it to the $3500-4500 range. I think that the level of Suzuki's bikes right now are still competitive in the hands of many local racer/riders, and I would jump at the chance to purchase a new dirtbike for $5500 rather than a 2yr old ktm 450 second hand that some guy is asking $8500 for.

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5/11/2020 4:18 PM

My neighbor bought a rmz450 due to the color and price. My other neighbor has a 15 crf450 and never checked the air pressure in the forks. This is suzuki's segment.

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5/11/2020 5:20 PM
Edited Date/Time: 5/11/2020 5:22 PM

You gotta ask yourself how much less does it cost Suzuki to make an RMZ450 than Yamaha or Kaw or Hon to make theirs? Not much less. An example of a $5500 dirt bike is Kawasakis new 20 KLX300! Nowhere near the tech of an RMZ.

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5/11/2020 9:42 PM

Had a ‘16 RMZ250, loved it. Air forks sucked a big one, but got it for $5200 otd. Wish I would’ve kept it. Wish their OEM parts didn’t cost an arm and a leg, however it’s been awhile since I’ve had a Zuk. Wouldn’t hesitate getting a brand new one if I could free up some budget and had a M-F job.

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5/11/2020 9:53 PM

It is a good idea but I think the fact that the bikes are meant to be competition focused exposes a flaw in that idea... Cars are competing on value and performance sure, but not like a race interpretation of performance...

Yamaha could do the same with their 2 stroke lineup – it's not had any R&D since 2008? What do they cost new compared to then, or a KTM/Husky?

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Cheers, Crush
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5/11/2020 9:57 PM

motoarmageddon wrote:

You gotta ask yourself how much less does it cost Suzuki to make an RMZ450 than Yamaha or Kaw or Hon to make theirs? Not much less. An example of a $5500 dirt bike is Kawasakis new 20 KLX300! Nowhere near the tech of an RMZ.

Costs aren't necessarily based on production costs though – price justifications are also set via market, tooling and R&D ... and in terms of R&D and tooling they sunk a large portion of those dollars in 2009... a little more each year after. If they aren't making a high per-unit profit now they never would.

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Cheers, Crush
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5/11/2020 11:36 PM
Edited Date/Time: 5/11/2020 11:39 PM

Crush wrote:

It is a good idea but I think the fact that the bikes are meant to be competition focused exposes a flaw in that idea... Cars are competing on value and performance sure, but not like a race interpretation of performance...

Yamaha could do the same with their 2 stroke lineup – it's not had any R&D since 2008? What do they cost new compared to then, or a KTM/Husky?

The YZ 125 & 250 are only a couple of hundreds less than the SX counterpart, which is insane. The margins that Yamaha has on those bikes are probably astronomical compared to the KTMs and Husqvarnas.

2020 YZ 125 in Finland: 7790€
2020 SX 125 in Finland: 8395€

But they still sell enough of them globally, so no need to dump the MSRP.

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5/11/2020 11:39 PM

Crush wrote:

It is a good idea but I think the fact that the bikes are meant to be competition focused exposes a flaw in that idea... Cars are competing on value and performance sure, but not like a race interpretation of performance...

Yamaha could do the same with their 2 stroke lineup – it's not had any R&D since 2008? What do they cost new compared to then, or a KTM/Husky?

Motofinne wrote:

The YZ 125 & 250 are only a couple of hundreds less than the SX counterpart, which is insane. The margins that Yamaha has on those bikes are probably astronomical compared to the KTMs and Husqvarnas.

2020 YZ 125 in Finland: 7790€
2020 SX 125 in Finland: 8395€

But they still sell enough of them globally, so no need to dump the MSRP.

Wonder how that cost has risen too...

All the manufacturers seem to be missing the point of pricing in this regard.

Anything that's a barrier to entry dwindles their market-base.

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Cheers, Crush
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5/12/2020 1:03 AM

Sharc wrote:

A world wide company with 375 Billion - yes Billion- yen in revenue
...and Jason thinks he's got a recommendation -----LOL!

Well, the brains behind that revenue clearly don't know how to sell big numbers of their RMZ line hence all the people on this thread also having an opinion.

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