Suzuki finances reason for unexpected MotoGp termination

tzmike
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5/5/2022 7:00am Edited Date/Time 5/15/2022 1:00pm
On Monday's MotoGp test day, the team was gathered and given the news that they will no longer be participating in the world championship after this season. This will be the 2nd time they pulled out of MotoGp. Shame.

I bet they could easily make serious coin if they brought the 125 and 250 smokers back in a aluminum chassis .

The official statement from Suzuki has not yet been released as the rights holder, Dorna has a say in this and holds the contract stating Suzuki participating in the series for 5yrs. Don't have the date Suzuki signed it.
More info available on crash.net and Gpone.com
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ga_pike
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5/5/2022 7:07am
Building modern 2 strokes isn't a magic bullet for Suzuki or any other manufacturer.
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5/5/2022 7:10am
I suspect what you think is serious coin vs Suzuki are worlds apart. I would guess the profits from selling all those fantastical 2 strokes a minority of buyers long for wouldn’t fund a single day of motogp practice and qualifying.
nskerb
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5/5/2022 8:12am
Yeah 125 and 250 2r sales will prop up and support their motoGP efforts
ridge
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5/5/2022 8:27am
You can't just dump a 2 stroke engine into a 4 stroke chassis and expect it to work. It would take tons of testing and engineering, not to mention all the upgrades their 2 stroke engines would need to be competitive in today's market (electric start, efi, oil injection, etc).
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The Shop

JK BRO
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5/5/2022 8:39am
ga_pike wrote:
Building modern 2 strokes isn't a magic bullet for Suzuki or any other manufacturer.
But it's a good start.

It's not like Suzuki didn't produce the baddest 05' RM250 in history.
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Falcon
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5/5/2022 8:43am
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses:

A few years ago, I worked for Suzuki. Not a Suzuki dealership, mind you, Suzuki America. The distributor for Suzuki Motor Corporation in the USA.
At the time, we sold something like 1,500 RM-Z450s and 1,000 RM-Z250s. My guess is that they sell even fewer right now. More importantly, Suzuki would likely sell even fewer 125/250 platform models, but let's stretch and say the number is equal to the 4-strokes; 1,500 250s and 1,000 125s.
Now, I don't know the profit margin that Suzuki Motor Corporation enjoys when they sell their bikes to the US distributor, but I would guess that it's around $1,000 - $2,000 on a motocross bike. (Maybe less.) But let's assume it's $2 grand. We're assuming a much higher profit and many more units than what I suspect is the case. The overall gross profit from one year of 125/250 sales would therefore be $5 Million. (2,500 units @ $2,000 each.) If they were to sell tons of 2-strokes and somehow managed to TRIPLE the sales of the 4-strokes, the profit would still be $15M.

Keep in mind that this is for a company which does something like $70B in annual sales - gross revenue 5,000 times more than the highest crazy estimate we just calculated.

While $5 million in profit is nothing to sneeze at, the gain or loss of such an amount would definitely not be the reason to start or discontinue a MotoGP team. Saving money may be the reason behind the discontinuation of the team, but it is more likely that Suzuki feels the return on their MotoGP investment isn't worthwhile.
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tzmike
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5/5/2022 8:45am
2 strokes to fund the MotoGp team. Ahhhh, NO.
They won the championship in 2020 which you would think put them as regular podium contenders.

As for a aluminum frame 2 stroke line. No doubt they would help prop up the bottom line. And being it done by some already, they surely would have geometry numbers to work with.
Being the RMZs are still kickstart I myself would not blink about the starting issue.
Regardless, it's a bad situation for them.
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tzmike
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5/5/2022 8:49am
Falcon, 15 million is probably the race teams budget
But you have the inside scoop and your #s are probably right in ballpark if not spot on.
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AH387
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5/5/2022 8:59am
Falcon wrote:
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses: A few years ago, I...
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses:

A few years ago, I worked for Suzuki. Not a Suzuki dealership, mind you, Suzuki America. The distributor for Suzuki Motor Corporation in the USA.
At the time, we sold something like 1,500 RM-Z450s and 1,000 RM-Z250s. My guess is that they sell even fewer right now. More importantly, Suzuki would likely sell even fewer 125/250 platform models, but let's stretch and say the number is equal to the 4-strokes; 1,500 250s and 1,000 125s.
Now, I don't know the profit margin that Suzuki Motor Corporation enjoys when they sell their bikes to the US distributor, but I would guess that it's around $1,000 - $2,000 on a motocross bike. (Maybe less.) But let's assume it's $2 grand. We're assuming a much higher profit and many more units than what I suspect is the case. The overall gross profit from one year of 125/250 sales would therefore be $5 Million. (2,500 units @ $2,000 each.) If they were to sell tons of 2-strokes and somehow managed to TRIPLE the sales of the 4-strokes, the profit would still be $15M.

Keep in mind that this is for a company which does something like $70B in annual sales - gross revenue 5,000 times more than the highest crazy estimate we just calculated.

While $5 million in profit is nothing to sneeze at, the gain or loss of such an amount would definitely not be the reason to start or discontinue a MotoGP team. Saving money may be the reason behind the discontinuation of the team, but it is more likely that Suzuki feels the return on their MotoGP investment isn't worthwhile.
I think your last sentence is exactly it. The return is not worth the investment. Sportbike sales are not exactly at their peak right now. 600s have been on life-support for a while and 1000s have a certain group that they make sense for, but that is a pretty focused group. It seems like more streetable motorcycle options are more popular, in general. So hardcore racing is great but if the interest on the product on the showroom floor isn't there, then you start to wonder if it makes sense. Just my opinion.
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5/5/2022 9:08am
ridge wrote:
You can't just dump a 2 stroke engine into a 4 stroke chassis and expect it to work. It would take tons of testing and engineering...
You can't just dump a 2 stroke engine into a 4 stroke chassis and expect it to work. It would take tons of testing and engineering, not to mention all the upgrades their 2 stroke engines would need to be competitive in today's market (electric start, efi, oil injection, etc).
I guess your not familiar with yz250’s or 250sx...
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GrapeApe
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5/5/2022 9:11am
tzmike wrote:
Falcon, 15 million is probably the race teams budget But you have the inside scoop and your #s are probably right in ballpark if not spot...
Falcon, 15 million is probably the race teams budget
But you have the inside scoop and your #s are probably right in ballpark if not spot on.
Falcon's numbers for RMZ sales are very high, I'm guessing they sell about half of that number at best. 2 strokes would be far less than the 4 stroke numbers, particularly if they are built and marketed as MX models instead of XC/enduro.

There's a guy on here with the actual numbers, and he said RMZ sales fell something like 50% from 2020 to 2021. Hopefully he'll chime in here and correct me if I'm wrong.
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#434
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5/5/2022 9:20am
Falcon wrote:
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses: A few years ago, I...
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses:

A few years ago, I worked for Suzuki. Not a Suzuki dealership, mind you, Suzuki America. The distributor for Suzuki Motor Corporation in the USA.
At the time, we sold something like 1,500 RM-Z450s and 1,000 RM-Z250s. My guess is that they sell even fewer right now. More importantly, Suzuki would likely sell even fewer 125/250 platform models, but let's stretch and say the number is equal to the 4-strokes; 1,500 250s and 1,000 125s.
Now, I don't know the profit margin that Suzuki Motor Corporation enjoys when they sell their bikes to the US distributor, but I would guess that it's around $1,000 - $2,000 on a motocross bike. (Maybe less.) But let's assume it's $2 grand. We're assuming a much higher profit and many more units than what I suspect is the case. The overall gross profit from one year of 125/250 sales would therefore be $5 Million. (2,500 units @ $2,000 each.) If they were to sell tons of 2-strokes and somehow managed to TRIPLE the sales of the 4-strokes, the profit would still be $15M.

Keep in mind that this is for a company which does something like $70B in annual sales - gross revenue 5,000 times more than the highest crazy estimate we just calculated.

While $5 million in profit is nothing to sneeze at, the gain or loss of such an amount would definitely not be the reason to start or discontinue a MotoGP team. Saving money may be the reason behind the discontinuation of the team, but it is more likely that Suzuki feels the return on their MotoGP investment isn't worthwhile.
Thank you for providing some reasonable estimates and numbers!

Some people overestimate the dirt bike market so much, it's funny. Motocross is mostly a marketing tool for the Japanese brands. Honda makes way more money selling Super Cub 110s than CRFs.
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5/5/2022 9:23am
JK BRO wrote:
But it's a good start.

It's not like Suzuki didn't produce the baddest 05' RM250 in history.
Suzuki is the only one that made a 2005 RM250.
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line-up
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5/5/2022 9:33am
tzmike wrote:
On Monday's MotoGp test day, the team was gathered and given the news that they will no longer be participating in the world championship after this...
On Monday's MotoGp test day, the team was gathered and given the news that they will no longer be participating in the world championship after this season. This will be the 2nd time they pulled out of MotoGp. Shame.

I bet they could easily make serious coin if they brought the 125 and 250 smokers back in a aluminum chassis .

The official statement from Suzuki has not yet been released as the rights holder, Dorna has a say in this and holds the contract stating Suzuki participating in the series for 5yrs. Don't have the date Suzuki signed it.
More info available on crash.net and Gpone.com
This is the third time.
Suzuki unexpectedly pulled out from MOTOGP (500cc at the time) at the end of 1983, after winning the title the year before.
They also quit motocross racing at the same time.
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Bearuno
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5/5/2022 10:07am
Falcon wrote:
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses: A few years ago, I...
I'm going to piggyback on the comments above and correct the OP about "serious coin." Let's take some random, educated guesses:

A few years ago, I worked for Suzuki. Not a Suzuki dealership, mind you, Suzuki America. The distributor for Suzuki Motor Corporation in the USA.
At the time, we sold something like 1,500 RM-Z450s and 1,000 RM-Z250s. My guess is that they sell even fewer right now. More importantly, Suzuki would likely sell even fewer 125/250 platform models, but let's stretch and say the number is equal to the 4-strokes; 1,500 250s and 1,000 125s.
Now, I don't know the profit margin that Suzuki Motor Corporation enjoys when they sell their bikes to the US distributor, but I would guess that it's around $1,000 - $2,000 on a motocross bike. (Maybe less.) But let's assume it's $2 grand. We're assuming a much higher profit and many more units than what I suspect is the case. The overall gross profit from one year of 125/250 sales would therefore be $5 Million. (2,500 units @ $2,000 each.) If they were to sell tons of 2-strokes and somehow managed to TRIPLE the sales of the 4-strokes, the profit would still be $15M.

Keep in mind that this is for a company which does something like $70B in annual sales - gross revenue 5,000 times more than the highest crazy estimate we just calculated.

While $5 million in profit is nothing to sneeze at, the gain or loss of such an amount would definitely not be the reason to start or discontinue a MotoGP team. Saving money may be the reason behind the discontinuation of the team, but it is more likely that Suzuki feels the return on their MotoGP investment isn't worthwhile.
#434 wrote:
Thank you for providing some reasonable estimates and numbers! Some people overestimate the dirt bike market so much, it's funny. Motocross is mostly a marketing tool...
Thank you for providing some reasonable estimates and numbers!

Some people overestimate the dirt bike market so much, it's funny. Motocross is mostly a marketing tool for the Japanese brands. Honda makes way more money selling Super Cub 110s than CRFs.
Yep, over (well) 100 Million Super Cubs in their variations have been sold. Then there's the Millions upon Millions of other models they've sold over the decades , that have paid for production of our various 'Toys' that we buy and ride.
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davis224
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5/5/2022 10:12am
JK BRO wrote:
But it's a good start.

It's not like Suzuki didn't produce the baddest 05' RM250 in history.
Suzuki is the only one that made a 2005 RM250.
It's still factually accurate. Out of all the 05 RM250s, Suzuki without a doubt made the best one.
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5/5/2022 10:13am
JK BRO wrote:
But it's a good start.

It's not like Suzuki didn't produce the baddest 05' RM250 in history.
Suzuki is the only one that made a 2005 RM250.
Beat me to this comment Lol
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JK BRO
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5/5/2022 11:07am
JK BRO wrote:
But it's a good start.

It's not like Suzuki didn't produce the baddest 05' RM250 in history.
Suzuki is the only one that made a 2005 RM250.
Exactly, it was the last 2 stroke to win an AMA or Supercross title. If that's not the epitome of badass for a 2T then what?

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dcg141
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5/5/2022 11:25am
The RMZ numbers total are right at 1000 units in the US. 250 and 450.
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#434
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5/5/2022 12:08pm
dcg141 wrote:
The RMZ numbers total are right at 1000 units in the US. 250 and 450.
Like I said, I‘m surprised they can justify keeping the production line in place.
Maybe they produced 5000 units in 2018 without installed graphics and sell them with BNG each year until they’re gone.
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Roczoff
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5/5/2022 12:17pm
Aren't there already enough/too many brands of MX bikes?

I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders (former/almost pros) that they're the best. Is there something you need that isn't provided by Honda, Yamaha, Kawasaki, KTM, GasGas, Husqvarna, and the upcoming Triumph, Sherco, TM? (Am I missing any?!)

Rather than have 8+ brands diluting the resources, how about only 4 brands that have more money to develop BETTER MX bikes? Suzuki obviously didn't have the money to get their RMZs right. The only appeal is their discount price.

The only thing keeping so many brands going is tribalism. There, I said it.

If Suzuki drops their MX line, it's probably good for riders.
15
5/5/2022 12:31pm
Roczoff wrote:
Aren't there already enough/too many brands of MX bikes? I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders...
Aren't there already enough/too many brands of MX bikes?

I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders (former/almost pros) that they're the best. Is there something you need that isn't provided by Honda, Yamaha, Kawasaki, KTM, GasGas, Husqvarna, and the upcoming Triumph, Sherco, TM? (Am I missing any?!)

Rather than have 8+ brands diluting the resources, how about only 4 brands that have more money to develop BETTER MX bikes? Suzuki obviously didn't have the money to get their RMZs right. The only appeal is their discount price.

The only thing keeping so many brands going is tribalism. There, I said it.

If Suzuki drops their MX line, it's probably good for riders.
So Suzuki having a race team, paying riders mechanics etc. isn't good for riders? More OEM's competing means more rides for riders and jobs for other people....
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jaun
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5/5/2022 12:46pm
ga_pike wrote:
Building modern 2 strokes isn't a magic bullet for Suzuki or any other manufacturer.
JK BRO wrote:
But it's a good start.

It's not like Suzuki didn't produce the baddest 05' RM250 in history.
The produced the on RM250 in 2005
5/5/2022 1:05pm
Roczoff wrote:
Aren't there already enough/too many brands of MX bikes? I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders...
Aren't there already enough/too many brands of MX bikes?

I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders (former/almost pros) that they're the best. Is there something you need that isn't provided by Honda, Yamaha, Kawasaki, KTM, GasGas, Husqvarna, and the upcoming Triumph, Sherco, TM? (Am I missing any?!)

Rather than have 8+ brands diluting the resources, how about only 4 brands that have more money to develop BETTER MX bikes? Suzuki obviously didn't have the money to get their RMZs right. The only appeal is their discount price.

The only thing keeping so many brands going is tribalism. There, I said it.

If Suzuki drops their MX line, it's probably good for riders.
Didn’t have the money to get their rmz line right? Say what? Rmz’s have literally won sx and Mx titles, plus many off-road victories.

Everyone seems to forget that motorcycles are not Suzuki’s main commodity and that we often see them scale back on them when their auto lines need cash flow for continued growth.

skeef
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5/5/2022 1:11pm
It's interesting their marine divison is a subsidiary of Suzuki Motors yet the motorcycle divison is still with the parent company. I wonder if they'd split like kawasaki and yamaha did.
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Roczoff
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5/5/2022 1:14pm
Roczoff wrote:
Aren't there already enough/too many brands of MX bikes? I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders...
Aren't there already enough/too many brands of MX bikes?

I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders (former/almost pros) that they're the best. Is there something you need that isn't provided by Honda, Yamaha, Kawasaki, KTM, GasGas, Husqvarna, and the upcoming Triumph, Sherco, TM? (Am I missing any?!)

Rather than have 8+ brands diluting the resources, how about only 4 brands that have more money to develop BETTER MX bikes? Suzuki obviously didn't have the money to get their RMZs right. The only appeal is their discount price.

The only thing keeping so many brands going is tribalism. There, I said it.

If Suzuki drops their MX line, it's probably good for riders.
Didn’t have the money to get their rmz line right? Say what? Rmz’s have literally won sx and Mx titles, plus many off-road victories. Everyone seems...
Didn’t have the money to get their rmz line right? Say what? Rmz’s have literally won sx and Mx titles, plus many off-road victories.

Everyone seems to forget that motorcycles are not Suzuki’s main commodity and that we often see them scale back on them when their auto lines need cash flow for continued growth.

Few people believe that the PRODUCTION RMZs are very good.

(They're probably good enough for 85% of riders, bone stock, but magazine test riders, ya know)
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jaun
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5/5/2022 1:15pm
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GuyB
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5/5/2022 1:19pm
Suzuki is the only one that made a 2005 RM250.
Sometimes unintentional comedy is the funniest.
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5/5/2022 1:34pm
Roczoff wrote:
Aren't there already enough/too many brands of MX bikes? I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders...
Aren't there already enough/too many brands of MX bikes?

I mean, they're all competing to be the same basic bike, good at convincing website/mag test riders (former/almost pros) that they're the best. Is there something you need that isn't provided by Honda, Yamaha, Kawasaki, KTM, GasGas, Husqvarna, and the upcoming Triumph, Sherco, TM? (Am I missing any?!)

Rather than have 8+ brands diluting the resources, how about only 4 brands that have more money to develop BETTER MX bikes? Suzuki obviously didn't have the money to get their RMZs right. The only appeal is their discount price.

The only thing keeping so many brands going is tribalism. There, I said it.

If Suzuki drops their MX line, it's probably good for riders.
Didn’t have the money to get their rmz line right? Say what? Rmz’s have literally won sx and Mx titles, plus many off-road victories. Everyone seems...
Didn’t have the money to get their rmz line right? Say what? Rmz’s have literally won sx and Mx titles, plus many off-road victories.

Everyone seems to forget that motorcycles are not Suzuki’s main commodity and that we often see them scale back on them when their auto lines need cash flow for continued growth.

Roczoff wrote:
Few people believe that the PRODUCTION RMZs are very good.

(They're probably good enough for 85% of riders, bone stock, but magazine test riders, ya know)
Unfortunately that is true.

I own a 20’ rmz so I know it’s a great bike, better fit and finish then my ktm’s. Bought my 20’ 250sx new, it leaked coolant and oil day 1, forks also had no assembly lube in the aer air chamber and would bind(also from day one)

It amazes me that people rush out to buy new ktm’s when they need more $ to work for the average rider then say a rmz would. That’s coming from a guy who has 3 ktm’s currently.

It’s ok tho Schwartz will again beat star 250’s on his rmz this summer and I’m sure Mumford will probably have his best results ever on one. Oh yea another ironic thing that antsie guys results have been worse since getting off one.
1
Falcon
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5/5/2022 1:50pm
tzmike wrote:
Falcon, 15 million is probably the race teams budget But you have the inside scoop and your #s are probably right in ballpark if not spot...
Falcon, 15 million is probably the race teams budget
But you have the inside scoop and your #s are probably right in ballpark if not spot on.
GrapeApe wrote:
Falcon's numbers for RMZ sales are very high, I'm guessing they sell about half of that number at best. 2 strokes would be far less than...
Falcon's numbers for RMZ sales are very high, I'm guessing they sell about half of that number at best. 2 strokes would be far less than the 4 stroke numbers, particularly if they are built and marketed as MX models instead of XC/enduro.

There's a guy on here with the actual numbers, and he said RMZ sales fell something like 50% from 2020 to 2021. Hopefully he'll chime in here and correct me if I'm wrong.
I figured the sales numbers would have changed by now. It was before the pandemic that I left the company.

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