“Where are the rest of the Yamaha snowmobiles?” and speculating about our future.

[Grimm]

Kanata apparently has a show with all 4 manufacturers March 20 & 21. Surprising, considering that Arctic cat hasn't showed up for a number of years.

 

[20/80]

Again, its not the plastic which actually cost less than pennies.

If I make a mold (and I have) to create a complex bezel, similar in complexity to some of the parts I have seen on snowmobiles, it costs me about $50-80k in setup charges alone for the design, machining, re-machining, test runs, etc. Assuming of course I am making quality injected parts and not some vacuum formed throwaway.

Once I have the first mold I also know that I have to make new ones every so often so I have to factor that in as well. Then I have to commit to quantities. So, minimum order being in the range of 5-10k parts. The process of reaching this stage is often going to cost upwards of $150k-$200k depending on whether I am using eternal design resources, or I have my own employees, etc.. Once I have the parts made I have to put them somewhere where they won't get damaged, have people to manage that part and all of its cousins, etc... It has little to do with the actual cost of the plastic itself, its all part of a process from conception through delivery. Lets say I spend $300k on 10k parts, that's $30.00 each I have to recover just to break even but I don't want to break even, I want to make money so now I mark it up 3x because I need for this part to pay for itself, I need for the dealer to make some money, and I have to create room for discounting. My $30.o0 breakeven cost just became $90.00 at retail, I sold it to the dealer for $60, he makes $20.00 because he is a nice guy and gave you a discount. My $30.00 in profit has to pay my current running costs and fund next generation investment. Yes, all for $0.57 in actual plastic costs.

Like I said we are all hypnotized.. my uncle owned a Napa store for 40 years before he retired, I remember talking to him about the outrages prices on parts, he showed me a price list of high end windshield wipers....35 cents a set and that distributer was making money, I laugh to myself now when I see them hanging in a parts store to this day selling for 25-28 bucks a set, we are all molded and slowly evolved into thinking the price for anything manufactured is so costly to produce, sleds included

 

[earthling]

Like I said we are all hypnotized.. my uncle owned a Napa store for 40 years before he retired, I remember talking to him about the outrages prices on parts, he showed me a price list of high end windshield wipers....35 cents a set and that distributer was making money, I laugh to myself now when I see them hanging in a parts store to this day selling for 25-28 bucks a set, we are all molded and slowly evolved into thinking the price for anything manufactured is so costly to produce, sleds included

To think it is otherwise is to simply ignore the economics, both micro and macro that drive manufacturing. The average margin on goods these days is very thin. Companies make up for it through volume, lacking volume they have to charge more to increase prices.

To go further in this discussion would require a whole new forum teaching macro economics and business management. I think we can do without that..

 

[20/80]

To think it is otherwise is to simply ignore the economics, both micro and macro that drive manufacturing. The average margin on goods these days is very thin. Companies make up for it through volume, lacking volume they have to charge more to increase prices.

To go further in this discussion would require a whole new forum teaching macro economics and business management. I think we can do without that..

I agree lol

 

[greggie]

Kanata apparently has a show with all 4 manufacturers March 20 & 21. Surprising, considering that Arctic cat hasn't showed up for a number of years.

No, it’s March 13-14...

 

[HUNT 24/7]

That's a pretty transparent letter for a company like Yamaha, good for them.

For the naysayers. If Yamaha wanted out, they would not be holding the line, they would be dumping price. It is far easier to justify the impact of a lower margin and gross profit per division (for the business unit) which would be the result of dumping prices than it is to do what they are doing which is manage the inventory, maintain price, and do right by the channel. That is a very difficult decision to make. Seriously. I cannot express how difficult it must have been to go to the boss and explain to them that you are intentionally limiting top line revenue in order to balance the business. People get fired over that kind of bravery (for the wrong reasons but it happens). For those of you that read their current activity as squeezing blood from stone (trying to make the last few dollars out of what they have).. I am telling you that the current activity would not be a smart tactic. If you were selling the company you would have to establish brand value, market share, internal efficiency, and most of all, bottom line. Flushing out the channel doesn't get you there. Limiting sales doesn't get you there. Pissing of customers doesn't get you there. Rebuilding channel is the activity of a company who has something to gain in the future, not something to lose.

That is not to say that there have also been mistakes. For a company to make these very tough decisions there has to be some internal admission of error. One could argue that the error was in forecasting which would have them manufacturing too many sleds and stuffing the dealers with inventory that they can't move. The obvious justification would be 'no snow' but that is not what I read in the letter. What I read (and I have written many letters like this) is an admission, albeit a soft one, that they are working on something new and they want to manage demand where they have brand loyalty. This means that someone had to draw a line in the sand and pick which side they want to be on, do they continue to turn out the same product, and treat the channel the same way or do you implement change. Public letters like this rarely get written in a vacuum and by one person, they are typically vetted by a cast and crew including legal and marketing. If they were just out to pump inventory to get out of the business, the letter would read very differently.

The focus on new in all of their public messaging tells me that they have a plan, have internal alignment, and they are in it to win. It may be late for some people on the site, its always going to be late for the skeptics, and it certainly doesn't feel good for those who want the best for the brand but the reality is that these are the tough things you have to do in business to be successful, not what you do if you want out.

Good for them for being transparent. I would rather deal with a company that is transparent in the face of tough times than to be misled. The reality is that the larger corporate culture (and I am not talking about Yamaha) is to drive growth, not sustainability, its about pumping and dumping product and about being cutthroat, not about building a healthy business. If Yamaha wanted to hurt their dealers they could easily have done far worse than what they are doing now. Lets hope that the division has been given the responsibility to do the right thing and to rebuild into a healthier business, that would be good for everybody.

You really seem to know your shite, im with this guy!

 

[Grimm]

No, it’s March 13-14...

You are correct. I originally thought so, then to be sure I did a search and came upon this page: http://www.snowsneakpeek.ca/fr/home-2/. It stated March 20 &21, 2017. Last year, huh? Weird, especially when the top of the page says SnowSneakPeak 2019.

The updated page is next week, March 13 &14,, 2018: http://www.snowsneakpeek.ca/en/home/

 

[furg69]

Not sure if I posted this response Here or another forum but this is what I got back from Yamaha Canada, After I sent an email to them about their slim 2019 lineup.
Hi Andrew
First and foremost, we want to thank you for being a loyal Yamaha enthusiast. We're delighted and impressed with how many snowmobiles you own that are all Yamaha.
As for the 2019 lineup, due to the maturing snowmobile market, limited snowfall the last few Winters, and previous lineups where some specific models have seen reduced demand, Yamaha has reduced the number of 2019 models to help correct levels of inventory for non-current models.
Predicting market sales and manufacturing volumes in the face of inconsistent weather patterns coupled with a need for constant evolution in the product has been a challenge in the maturing market, which shows signs of little growth. Customers don’t want to buy current year units if those units will lose much of their value the following year because of rebates. In taking this approach with 2019 lineup, it will help maintain greater value and demand for the health of the snowmobile industry.
We are monitoring feedback and will continue to monitor these trends so that Yamaha enthusiasts like yourself can continue to enjoy Yamaha's years from now.
Thanks for your feedback, Andrew!
Yamaha Motor Canada

 

[WillowAce]

this may surprise you, my best guess is somewhere around 1200- 1500 bucks a sled depending on the options and that may be high.

What? Are you just quoting raw materials? When you figure all direct and indirect costs you would be surprised.

 

[03RX1-ER-LE]

Not sure if I posted this response Here or another forum but this is what I got back from Yamaha Canada, After I sent an email to them about their slim 2019 lineup.
Hi Andrew
First and foremost, we want to thank you for being a loyal Yamaha enthusiast. We're delighted and impressed with how many snowmobiles you own that are all Yamaha.
As for the 2019 lineup, due to the maturing snowmobile market, limited snowfall the last few Winters, and previous lineups where some specific models have seen reduced demand, Yamaha has reduced the number of 2019 models to help correct levels of inventory for non-current models.
Predicting market sales and manufacturing volumes in the face of inconsistent weather patterns coupled with a need for constant evolution in the product has been a challenge in the maturing market, which shows signs of little growth. Customers don’t want to buy current year units if those units will lose much of their value the following year because of rebates. In taking this approach with 2019 lineup, it will help maintain greater value and demand for the health of the snowmobile industry.
We are monitoring feedback and will continue to monitor these trends so that Yamaha enthusiasts like yourself can continue to enjoy Yamaha's years from now.
Thanks for your feedback, Andrew!
Yamaha Motor Canada

This is exactly what we (the sane ones ) have been talking about. The riders are older and unfortunately getting out or dying off. The Younguns are not interested or have the coin to get into the sport. The low snow seasons are keeping miles down, the four stroke sled lasts forever. Look what is happening in the hotrod market. The generation that likes 20's to 40's cars are going away and the value, and desire to own, on those is going down. The kids coming up don't want to drive cars, so that will be a big impact. Things are changing, lets hope Yamaha makes sleds for a while yet, which is what I feel they will, sure cant say what is going to happen in 10/20 years, but they are here for now so lets keep sledding and less wining.

 

[Motorhead]

All sled manufacturers realize that spring orders are the way to go. You can only get the ultra models (LE] during spring orders only. That kept the LE used pricing higher then other models, and kept them off the showroom floor in many locations.
I said it in 2017 when I ordered my Winder LTX-LE, that this is a wave of the future for snowmobiles. It helps keep the pricing up with limited stock inventory, and it works.

HD had a thing going before the 2003 Anniversary builds.
They boosted their bike build for that year X2 or 3. What did that do?

Before hand if you wanted any model HD you put your name on a list with your dealer.
You told them what model and color you wanted, they would call when some bikes came in and your turn came around.
It may not be what color you wanted, so you had a choice, say no a let someone else have it or and wait for the next shipment, or take what they had if it was your color or close to your color!!! And you paid more then the online MSRP. That price was a joke and not available, because used model pricing was just as high.

Since 2003 they have flooded the market and all that fell apart.
Now there are more then enough to go around and their used pricing is and has fallen off considerably.

Get my drift. All I know is that my LE is still worth a bit because of it’s rarity?

 

[Apexpat]

I checked the yamaha website and it says they have 16’s as leftovers as well...

Yep. I just purchased a leftover 16 Apex. I payed less than i did for my 13 Apex.

 

[jjmoneysauce]

That's a pretty transparent letter for a company like Yamaha, good for them.

For the naysayers. If Yamaha wanted out, they would not be holding the line, they would be dumping price. It is far easier to justify the impact of a lower margin and gross profit per division (for the business unit) which would be the result of dumping prices than it is to do what they are doing which is manage the inventory, maintain price, and do right by the channel. That is a very difficult decision to make. Seriously. I cannot express how difficult it must have been to go to the boss and explain to them that you are intentionally limiting top line revenue in order to balance the business. People get fired over that kind of bravery (for the wrong reasons but it happens). For those of you that read their current activity as squeezing blood from stone (trying to make the last few dollars out of what they have).. I am telling you that the current activity would not be a smart tactic. If you were selling the company you would have to establish brand value, market share, internal efficiency, and most of all, bottom line. Flushing out the channel doesn't get you there. Limiting sales doesn't get you there. Pissing of customers doesn't get you there. Rebuilding channel is the activity of a company who has something to gain in the future, not something to lose.

That is not to say that there have also been mistakes. For a company to make these very tough decisions there has to be some internal admission of error. One could argue that the error was in forecasting which would have them manufacturing too many sleds and stuffing the dealers with inventory that they can't move. The obvious justification would be 'no snow' but that is not what I read in the letter. What I read (and I have written many letters like this) is an admission, albeit a soft one, that they are working on something new and they want to manage demand where they have brand loyalty. This means that someone had to draw a line in the sand and pick which side they want to be on, do they continue to turn out the same product, and treat the channel the same way or do you implement change. Public letters like this rarely get written in a vacuum and by one person, they are typically vetted by a cast and crew including legal and marketing. If they were just out to pump inventory to get out of the business, the letter would read very differently.

The focus on new in all of their public messaging tells me that they have a plan, have internal alignment, and they are in it to win. It may be late for some people on the site, its always going to be late for the skeptics, and it certainly doesn't feel good for those who want the best for the brand but the reality is that these are the tough things you have to do in business to be successful, not what you do if you want out.

Good for them for being transparent. I would rather deal with a company that is transparent in the face of tough times than to be misled. The reality is that the larger corporate culture (and I am not talking about Yamaha) is to drive growth, not sustainability, its about pumping and dumping product and about being cutthroat, not about building a healthy business. If Yamaha wanted to hurt their dealers they could easily have done far worse than what they are doing now. Lets hope that the division has been given the responsibility to do the right thing and to rebuild into a healthier business, that would be good for everybody.

I had missed this thoughtful well-articulated post. Well done. You said it better than anyone yet.

 

[mikextx]

This is exactly what we (the sane ones ) have been talking about. The riders are older and unfortunately getting out or dying off. The Younguns are not interested or have the coin to get into the sport. The low snow seasons are keeping miles down, the four stroke sled lasts forever. Look what is happening in the hotrod market. The generation that likes 20's to 40's cars are going away and the value, and desire to own, on those is going down. The kids coming up don't want to drive cars, so that will be a big impact. Things are changing, lets hope Yamaha makes sleds for a while yet, which is what I feel they will, sure cant say what is going to happen in 10/20 years, but they are here for now so lets keep sledding and less wining.

its true that yamaha riders are dying off. not true that the youngsters arent interested. i have a couple, and see alot kids that ride. women too. But yamaha has nothing for a 12-16 year old kid to ride in their lineup anymore. A good way to grow your market is to supply what they need from 8years old, to 80 years old. Yamaha not marketing a sled for kids 12-16 tells me that they dont give 2craps about their own future in the sled biz. My 15 yr old son says my apex is nice and fast as hell, but looks outdated, (its a 2017), and it doest jump very good. lol. He grew up on 2stroke yamahas and its gonna be a long time till he wants a 600plus lb. 4stroker

 

[jjmoneysauce]

its true that yamaha riders are dying off. not true that the youngsters arent interested. i have a couple, and see alot kids that ride. women too. But yamaha has nothing for a 12-16 year old kid to ride in their lineup anymore. A good way to grow your market is to supply what they need from 8years old, to 80 years old.

The Bravos and Enticers used to squarely fill that niche in a way that nothing really does today. Today's sled-buying adults in many cases grew up exposed to Bravos and Enticers!