Cycle World Roundup

CYCLE WORLD ROUNDUP

Living with the tariff boost

Ten months ago, President Reagan granted Harley-Davidson's request for a five-year trade penalty to discourage importation of large-displacement motor-

cycles from Japan. Reagan's order immediately boosted the tariff on imports of motorcycles with engines displacing more than 699cc, raising it from 4.4 percent to 49.4 percent-an increase of some 1100 percent.

The tariff is scheduled to decrease gradually over the course of the five-year period, dropping to 39.4 percent on April 15, to 29.4 percent in 1985, and to 19.4 percent in 1986. In 1987, the import tax will settle at 10 percent-still double the pre-penalty rate.

A yearly allotment of motorcycles is exempt from the increased tariff. Those bikes are assessed the old rate. In 1983, the Japanese

allotment was 6000 bikes. The allotment

will increase by 1000 bikes a year, reaching 9000in 1987. Thisy~: Harley had lobbied heavily for the penalty, arguing that a flood of large-displacement Japanese bikes-being sold at artificially deflated

prices-had depressed the American market, posing a grave threat to the company's future. A tariff increase, the company predicted, would force its Japanese compet itors to raise prices to fair levels, making Harleys more price-competitive. And the market stability that would result from a narrowed price gap would make it easier for Harley to find financing for the development and produc tion of new models, company officials said.

It was an emotional issue in the world of motorcycling, and critics were quick to fire off salvos of their own predictions-mostly dire-in the days following Reagan's announcement.

They said the trade pena1t~ would ruin the market. There would be fewer new models from Japan, they said, and those would be so expensive that only a small number of riders would be able to afford them. Purchasers of lightand middle-weight bikes would be unfairly taxed, they. argued, because the compa nies would absorb the in creased tariff by distributing the costs throughout their product lines. Sales would drop. At least one, maybe two, of the Japanese compa nies would be driven out of the motorcycle business, they

predicted. And, -finally, there

was the argument that Harley already was beyond saving, a dinosaur with numbered days.

Now that we know something about sales in ’83, now that we’ve seen the ’84 model

lineups, just what were the effects? Exactly what is life like, post-tariff?

Veryconfusing.it WMv/kL turns out. As in . . .

—Although the final figures aren’t tabulated yet, it does appear that overall sales of Japanese motorcycles were down slightly in 1983. Harley, meanwhile, held ground;

1983 sales were about the same as they were in 1982.

—None of the Japanese companies abandoned the motorcycle business, although all of them worked hard in 1983 to minimize overhead costs. They trimmed back workforces, sliced advertising budgets, cut or stopped assistance to racing programs, delayed new models, dropped some existing models, and scaled down production.

— Harley’s share of the 700cc-and-up market increased in the months following Reagan’s order. In May 1983, Harley held 9.7 percent of that market. In August, that had increased to 12.4 percent. That’s because Harley’s sales held steady, while the Big Four’s dropped.

There are fewer largedisplacement Japanese bikes in the 1984 model lineups—17, compared with 43 in 1983. Honda introduced three new models, kept two, and dropped six. Yamaha introduced two new models, kept one, and dropped eight. Kawasaki announced two new big bikes, kept four, and dropped seven. Suzuki unveiled one new bikes, kept one, and dropped 11.

—The displacements of some Japanese models were reduced so they could come in under the 700cc tariff wire.

Honda, Yamaha, Kawasaki and Suzuki all are shipping 699cc 700s for 1984, most of them debored or destroked versions of 1983’s 750s. —The two Japanese companies with production facilities in the U.S., Honda and Kawasaki, are beating the high tariffs on some models by building them here, wedding powertrains shipped from Japan with U.S.-made frames and bodies. Actually, Kawasaki is beating the increased tariff altogether, assembling all of its largedisplacement U.S. models—the Voyager, the GPzl 100, the LTD 1100, the GPz900, the the 750 Turbo, the GPz750, the and the company’s lOOOcc police bike—in Lincoln, Nebraska. Honda is assembling the three types of Gold Wings and the V65 Sabre and Magna models in Marysville, Ohio, leaving only the two Interceptors, the 750 and the new 1000, subject to the high tariff.

—On the average, the prices of carryover models not subject to the increased tax, including Harleys, increased about 3 percent. There were larger price hikes for models once built in Japan, but now assembled in the U.S.; Honda’s V65 Magna, for example, increased in price from $3898 to $4398, a 14 percent jump. The price tags of bikes subject to the tariff increased even more. The 1983 Honda 750 Interceptor sold for $3498, while the ’84 model goes for $4398, almost 26 percent more.

—Ironically, most of the large-displacement Japanese models with Harley-like styling—Honda’s Shadow and two of the Magnas, and one of Yamaha’s Viragos—have escaped the extra tariff. Last year’s 750 Shadow, Magna and Virago are this year’s 700s; the 1 lOOcc V65 Magna is being assembled in the U.S. Of the big-engined Japanese choppers, only the Virago 1000 will be assessed the tariff.

—There is no indication that the companies made any effort to lessen the effect of the tariffs on certain models by absorbing the costs throughout the product line. Thus, the purchaser of a smaller-displacement bike is not subsidizing the purchaser of a tariff-assessed bike.

—Some imported largedisplacement models will not be available until after April 15, to take advantage of the 10 percent drop in the tariff. And there’s still a chance, say some factories, that several large-displacement models that officially were not carried over into the 1984 lineups may reappear later in the year.

—In mid-1983, HarleyDavidson introduced the V-2 Evolution engine, a newgeneration version of its traditional 45° V-Twin. The company, however, hasn’t had any luck yet getting financing for the development of its long-awaited V-Four family.

— Harley was able to replace more than 400 of the 1600 jobs that were cut in the summer of 1982. Most of those jobs were replaced in the months after the new tariff rate took effect. And after a couple of years of operating at a loss, the company was in the black at the end of the

year.

As we said, very confusing. To summarize: Sales of Japanese bikes were down.

No one went out of business. Harley made money. There are fewer models in 1984. Some of them are considerably more expensive, but not all. Harley introduced a technically superior treatment of its old engine, but didn’t get the financing to develop and produce its new V-Four. A lot of bikes, including a number of Japanese models styled as Harley competitors, escaped the tariff hike. Suddenly, there are fewer 750s, and a lot of 700s.

Both sides, it turned out, were right. Both sides, it also turned out, were wrong.

Some things each predicted came true. Other things didn’t. The tariff wasn’t the miracle that Harley had hoped it would be. But neither was it the apocalypse the*critics had warned against.

When it comes down to cause and effect, it’s almost impossible to tell what was a direct result of the increased tariff. The shrinking 750, certainly. Some of the raised prices, yes. The delay in getting new models into stock, probably.

But the sales figures, the decrease in the number of new bikes, the slimming of model lineups, and even, to some degree, pricing strategy—those also reflect the influence of other factors, such as the state of the economy and the size of the bike surplus here. Those other factors make any reading of the tariff’s effects nothing more than educated guesswork.

Which is a way of saying that the impact may be something we’ll live with. But never understand.

A sudsy toast to the past

Old motorcycles are most often seen in museums, motorcycle dealerships or at old bike shows held in some scenic spot like a shopping center. Imagine, if you will,

where an old motorcycle show could be held if there weren’t many motorcycles and there weren’t many people to look at them. One bike and half a dozen admirers could fit in a van. A couple of more bikes and people could fit in the average garage, but that’s still too limited. No, about the smallest practical bike show would need a couple of dozen bikes and maybe a hundred hard-core admirers. Yeah, that would work.

And that’s just what Fritz Maytag had in mind. Maytag owns a brewery, the Anchor Brewery in San Francisco and he likes bikes. He owns several, including one old enough to be considered a classic. His brewery is occasionally used for art shows and chamber music concerts, but more recently it was home to another kind of art. Maytag opened up the brewery to an antique motorcycle show.

This was not to be just any old bike show. This was to be the ne plus ultra of old motorcycle displays. Instead of sticking up notices in bike shows to recruit bikes,

Maytag went to Frank Conley, president of the Classic and Antique Motorcycle Association and asked Conley to corral a group of the finest old motorcycles. Conley obliged. The 31 bikes on display were all show winners. And they were all runners.

Oldest motorcycle shown was a 1915 Harley-Davidson that had been restored with all original parts. The magnificent grey V-Twin even had original options of the era, including carbide lamps and speedometer. At the other extreme, a pair of Greeves, one roadracer and the other a motocrosser, were the newest bikes present.

Most of the machines were not racing bikes, however, but normal street bikes, with a heavy concentration of Fifties English bikes.

It’s a shame, in a way, that more people couldn’t attend the Anchor bike show.

There’s a lot to be learned from looking at the ingenuity of our ancestors. People who thought Yamaha invented the single shock could look at Vincent V-Twins, and people who thought Vincent invented the swing arm could look at the 1919 Indian. A four-cylinder Henderson was included in the pack of bikes, though it was a long way from the first Four or even the first Henderson.

This was not an event to show firsts in design, or to show significant bikes. It was a collection of craftsmanship, of beautifully restored projects that glistened beside the gleaming copper vats.

If you ever have the chance to see a vintage motorcycle show at the Anchor brewery, don’t miss it.

Street, off-road rentals offered

Chances are that you’ve thought at least once how nice it’d be to fly somewhere on vacation and have a rental bike awaiting you there. For a long time, that was an impossible dream.

In the last couple of years, though, it’s become possible. At least, sort of. There are a few—not many, but a few—places around that will rent bikes. The good news is that the list is getting longer.

The latest to join the list are Off-Road Rentals Inc. ih Southern California, and Hurst Yamaha in Ontario, Canada.

The rental stock at OffRoad’s two locations includes: Honda dirt bikes, from the Mini-Trail 50 to the XR250; various Honda, Kawasaki, Yamaha and Suzuki street bikes, up to 650cc; Kawasaki Jet Skis; and several models of threeand four-wheelers. Off-Road also offers trailer rentals, quantity discounts, tours, instruction, parts and service.

Daily rental rates begin at $15 for off-road bikes; $65 for street bikes; $70 for Jet Skis; and $25 for threeand four-wheelers. The daily rates are discounted for week-long and twoor three-day rentals.

For reservations or further information, contact OffRoad Rentals, 3752 Cerritos Ave., Los Alamitos, Calif., 90720. Phone(213) 5948901. Or 4418 E. Chapman Ave., Orange, Calif., 92669. Phone(714) 771-7390.

The stock of rental Yamahas at Hurst’s four locations includes 185-1000cc street bikes; 80cc and 180cc scooters; 175cc, 200cc and 225cc three-wheelers; and 250cc and 340cc snowmobiles. Hurst also offers rental riding gear, riding luggage, trailers, and limited transportation and lodging.

Daily rental rates begin at $24.30 for street bikes,

$20.25 for scooters, $36.45 for three-wheelers and $48.60 for snowmobiles. Rates are discounted for week-long, or twoand three-day rentals.

For reservations or further information, contact Hurst Yamaha, 1220 Old Innes Road, Ottawa, Ontario.

Phone (613) 741-2221. Or 395 Richmond Road, Ottawa, Ontario. Phone (613) 725-1 111. Or 30 Stafford Road, Ottawa, Ontario. Phone (613) 820-9500. Or 1581 The Queensway, Toronto, Ontario. Phone (416) 255-3441.

Mid-displacement bike sales jump

5 ales of mid-displacement motorcycles increased almost 60 percent during the first three quarters of 1983, according to statistics furnished by the Motorcycle Industry Council.

The success in the middisplacement class helped to boost overall sales by about 11 percent, the MIC reported. The figures include both twoand four-strokes.

Sales of motorcycles displacing 450-749 cc, whichS includes the popular 500, 550 and 650 categories, and some bikes sold as 750s, were up 58 percent, compared to sales reports for the same period in 1982.

However, sales decreased of large-displacement bikes, 750cc and up, and of bikes in the 350-449 cc and under-125 cc classes. The large-displacement sales dropped by almost

6 percent, the 350-449cc sales by 12 percent, and under-125 cc sales by almost 4 percent.

Besides the mid-displacement class, only the 125349cc category posted an increase, jumping by 20 percent.

An MIC spokesman attributed the boom in middisplacement sales to widespread price-discounting, as manufacturers worked to clear a massive surplus of some models in that class, s