2020 Release

[srvfan]

the made in japan vs here thing is interesting from the standpoint that you would think made here would be less expensive but it hasn't turned out that way with the Cat deal. For car companies everything I've read says made here is cheaper . Mercedes BMW VW etc. all have large plants here. I think the quality could be just as good made here as long as it is an all japan design without the cost cutting compromises we see on Cat Chassis like the lousy ECU, no drain plug, PIA bearing service having to take off brakes etc.as

 

[earthling]

the made in japan vs here thing is interesting from the standpoint that you would think made here would be less expensive but it hasn't turned out that way with the Cat deal. For car companies everything I've read says made here is cheaper . Mercedes BMW VW etc. all have large plants here. I think the quality could be just as good made here as long as it is an all japan design without the cost cutting compromises we see on Cat Chassis like the lousy ECU, no drain plug, PIA bearing service having to take off brakes etc.as

The made anywhere thing doesn't really apply any more. Apple designs its products locally but manufactures offshore. BMW designs in germany and the US and does some manufacturing in the both. Manufacturers choose locations not simply based on talent but based on business incentives (taxes, discounts on operations, subsidies). None of the things you are holding against Cat are decisions that can be attributed to where the product is designed or manufactured. That is more about the company, how it can leverage the technology across products, and its design targets. IF for example Cat wanted to deliver a high quality ECU there are many places they can get one and many sources of talent to design one but they just don't have it as a design target, don't like or cant leverage the costs, or both.

Ideally I would want the design to be done locally to take advantage of North American riders, terrain, weather, and experience, all of which is different than Japan (or Norway, or... ). I would think that they would want to shorten up the interaction cycle between prototype, innovation, evolution, and production. To me that means local as that is how you get the most synergy in product development. I think it is mandatory to run the process with strict discipline and detail to manufacturability, supply chain, and post sales service considerations and nobody does that better than the Japanese but it doesn't have to be done in Japan, it can happen here as BMW has shown.

 

[Sevey]

As costs go, Yamaha always was far more expensive than the competitors. I was always told that due to trade tarrifs etc being manufactured in japan was the reason. Now all these sleds (less the engine) are built here in North America and it seems like the prices are even more expensive.
I haven’t figured this one out yet.....
Ms

 

[earthling]

As costs go, Yamaha always was far more expensive than the competitors. I was always told that due to trade tarrifs etc being manufactured in japan was the reason. Now all these sleds (less the engine) are built here in North America and it seems like the prices are even more expensive.
I haven’t figured this one out yet.....
Ms

Speculation: The cost of OEM components on top of a need to maintain a minimum operating profile (EBITDA) drives higher costs and leaner manufacturing during the retooling process. IOW, they have to pass thru an entire layer of costs (chassis, third party) while maintaining the bottom line relative to whatever they have committed to during the next year or so. If they move to an in-house design/manufactured product costs *could*/*probably will* go down. It all comes down to what management bought off on.

 

[WillowAce]

If they move to an in-house design/manufactured product costs *could*/*probably will* go down.

This would be true in the long run, in the short term the cost of tooling etc., would be huge. EBITDA, IMO, is not a good measure of overall profitability. COGS and G&A profiles are a better measure. With-that-said, I would think that a third party manufacturer either in Asia or Mexico and assembly in the destination country would lead to the lowest product cost. I know an executive of a major grill manufacturer that outsourced casting of pot metal parts to China. They would cast the parts and then pack raw castings into a sea container and ship them here. As you could imagine, raw pot metal sitting on the ocean for a month was in pretty crappy shape by the time it was in assembly. They ran 40% shrinkage and still cut costs by almost 50%. Not sure I want my snowmobile made like that.

 

[earthling]

This would be true in the long run, in the short term the cost of tooling etc., would be huge. EBITDA, IMO, is not a good measure of overall profitability. COGS and G&A profiles are a better measure. With-that-said, I would think that a third party manufacturer either in Asia or Mexico and assembly in the destination country would lead to the lowest product cost. I know an executive of a major grill manufacturer that outsourced casting of pot metal parts to China. They would cast the parts and then pack raw castings into a sea container and ship them here. As you could imagine, raw pot metal sitting on the ocean for a month was in pretty crappy shape by the time it was in assembly. They ran 40% shrinkage and still cut costs by almost 50%. Not sure I want my snowmobile made like that.

Point taken (re:COGS/GA), I currently work for a PE firm so EBITDA is everything as nobody acquires you based on COGS/GA, those are synergy numbers but point taken, contribution margin, controllable costs, cost of customer acquisition, efficiency all matter as you say.. Companies that can and do invest in manufacturing locally are able to be profitable, it requires success at the top line of course and execution across the board. When you break it down however there are processes (castings being one) which are just cheaper offshore. Looking at it holistically, metals are commodity goods, so the costs must come from two vectors, labor, tax/tariffs and regulatory, the latter having a bigger impact than you would think. Whenever a process can be high volume, low regulatory exposure, and automated (low mix, high volume) you can achieve pretty good results locally, or when it is very complex as a HLA (high level assembly) and/or there is risk in the design it can probably be done better locally. Whenever you can make high volume, predictable orders and large commitments, you can benefit from offshore. I recently moved one of our lines back to Canada from Thailand simply because of yields as the HLA was very complex (60 layer PCB, many connections, high speed electronics, etc), in Canada my turns are much faster and I pay for deliverables, not volume. Our high volume parts come from Thailand or Mexico and there is enough repetition there for the yields to be good. Our Mexico factory is terrible on complex HLAs and/or any change to process, but with enough onsite management they can hit their numbers. For us it is as much about de-risking the operations to have our manufacturing offshore as it is about savings, maybe more. The fact that we can scale up and down in the offshore/outsource operation is more valuable to us than the yields/cost issue. To bring this back on topic. Yamaha couldn't justify a 100% onshore process other than design/prototype and high level assembly but that is true of most manufacturers. Its that high level assembly that most of us feel as 'quality' (bolts are tight, everything aligns, paint is clean). The piece parts will come from whatever source can hit the numbers in terms of cost containment/risk/yields. In my previous comment I was speaking more to design, prototype, assembly as being important for onshore. How they manufacture their plastics/castings/piece parts is another ball o wax and I wouldn't council anyone to try to do that here.

 

[20/80]

One would think all the snowmobile manufactures deal with these costs not just Yamaha, the other brands seem to move forward with new development despite these barriers you speak of.

 

[earthling]

One would think all the snowmobile manufactures deal with these costs not just Yamaha, the other brands seem to move forward with new development despite these barriers you speak of.

I was just adding detail to what was otherwise a conversation (mostly in other threads) that sounded like 'they should have bought x or they should do y or why don't they give me free ice cream'. There are real world hurdles that any business can/should overcome. They are normal business hurdles, not specific to any brand. I was simply adding detail where there was none in the conversation, speaking as a person who has to deal with these decisions daily. If business were simple we wouldn't see so much turnover in all of the small manufacturers of cool technology that come and go in this industry (which is a shame).

Personally, to me, it feels like Yamaha is dealing with these hurdles but not at a pace or inside of a timeframe that makes all of the customers happy.

 

[20/80]

I was just adding detail to what was otherwise a conversation (mostly in other threads) that sounded like 'they should have bought x or they should do y or why don't they give me free ice cream'. There are real world hurdles that any business can/should overcome. They are normal business hurdles, not specific to any brand. I was simply adding detail where there was none in the conversation, speaking as a person who has to deal with these decisions daily. If business were simple we wouldn't see so much turnover in all of the small manufacturers of cool technology that come and go in this industry (which is a shame).

Personally, to me, it feels like Yamaha is dealing with these hurdles but not at a pace or inside of a timeframe that makes all of the customers happy.

I think Yamaha is taking their time watching the market and being cautious before coming out with something new, maybe its Yamaha's way of staying in the game.

 

[journeyman]

I don't foresee Yamaha ever getting back to a number one status in the snomo world in my time. Not that I care too much at this point in my life about another 2 stroke option, but without 2 strokes in their lineup mixed with 4 strokes (aka Ski Doo/Cat) I just can't see them gaining a lot of market share. What does bug me is they say they are committed to 4 stroke snowmobiles they should be leading in that department but they keep letting Ski Doo take away some of their thunder. I am really hoping they can shore up some other HP slots like the 150HP and maybe even a low 100 HP machine all in a good riding chassis. They definitely have the top HP slot covered.....for now.

 

[whitedust1]

I don't foresee Yamaha ever getting back to a number one status in the snomo world in my time. Not that I care too much at this point in my life about another 2 stroke option, but without 2 strokes in their lineup mixed with 4 strokes (aka Ski Doo/Cat) I just can't see them gaining a lot of market share. What does bug me is they say they are committed to 4 stroke snowmobiles they should be leading in that department but they keep letting Ski Doo take away some of their thunder. I am really hoping they can shore up some other HP slots like the 150HP and maybe even a low 100 HP machine all in a good riding chassis. They definitely have the top HP slot covered.....for now.

I’ll be happy if Yamaha stays in the snow biz with a new Apex replacement in 2020. 2019 line up is awful nothing for me at all with eps or 150 to 165 hp sled. It is true Yamaha has nothing for entry level 100 hp riders either. I wonder with Yamaha inventory reduction program that the market just forgets about Yamaha in 2020 and buys from other OEMs. It is very difficult to restart sales and market momentum once you turn it off. Yamaha will have to offer a really wide market appeal sled in 2020 and be prepared to spend lots of marketing money to get the public to test ride at factory ride events.

 

[journeyman]

It'

I’ll be happy if Yamaha stays in the snow biz with a new Apex replacement in 2020. 2019 line up is awful nothing for me at all with eps or 150 to 165 hp sled. It is true Yamaha has nothing for entry level 100 hp riders either. I wonder with Yamaha inventory reduction program that the market just forgets about Yamaha in 2020 and buys from other OEMs. It is very difficult to restart sales and market momentum once you turn it off. Yamaha will have to offer a really wide market appeal sled in 2020 and be prepared to spend lots of marketing money to get the public to test ride at factory ride events.

It's going to take a WOW factor sled or a game changer to uproot what Ski Doo has going for them, basically what the Rev chassis did. No one has been able to unseat them since 2003. It does seem that ride and handling are the number one thing that riders look for. The performance is pretty good with all the players but those two things seem to be key. The best anyone has done at taking back a little market share is Polaris when they came with the AXYS chassis sleds.

Yamaha has been known for other positive things like fit/finish, reliability and performance but not too much when it comes to ride and handling. For them to achieve that and get buyers to notice might be one heck of a feat. I am talking pure Yamaha, not the partnership. The Cat alliance helped immensely but Yamaha isn't going to get any credit for that understandably so.

 

[03RX1-ER-LE]

As costs go, Yamaha always was far more expensive than the competitors. I was always told that due to trade tarrifs etc being manufactured in japan was the reason. Now all these sleds (less the engine) are built here in North America and it seems like the prices are even more expensive.
I haven’t figured this one out yet.....
Ms

One thing I will say about the price of sleds, if we had a great winter and sled sales were through the roof and there were no left overs.......you would be paying a lot more for theses sleds. After all it is supply and demand that greatly effects prices.
Look at the price of the new Ford GT, limited supply and had to qualify to purchase, it is 450k to buy.
I don't see anyone complaining about (well maybe) is the price of a Waverunner FX Limited SVHO costs almost 17k, a YXZ Side by Side 22k and a Mastercraft XT25 ski boat 122k. How about a king ranch 4 wheel drive dual wheel diesel super duty truck 100k. My Wifes 2013 Lincoln was 62k and my 2017 F150 was 52k.
You have to pay to play.......

 

[Rich Kay]

One thing I will say about the price of sleds, if we had a great winter and sled sales were through the roof and there were no left overs.......you would be paying a lot more for theses sleds. After all it is supply and demand that greatly effects prices.
Look at the price of the new Ford GT, limited supply and had to qualify to purchase, it is 450k to buy.
I don't see anyone complaining about (well maybe) is the price of a Waverunner FX Limited SVHO costs almost 17k, a YXZ Side by Side 22k and a Mastercraft XT25 ski boat 122k. How about a king ranch 4 wheel drive dual wheel diesel super duty truck 100k. My Wifes 2013 Lincoln was 62k and my 2017 F150 was 52k.
You have to pay to play.......

YEP....And soon nobody will be playing!

 

[earthling]

" After all it is supply and demand that greatly effects prices.

It would be rare for competitive companies to uniformly raise prices, the reality is with good snow you have more riders, more volume, lower prices as competition heats up. The distance between supply and demand changes at the end of the cycles. With one really good winter, demand might outstrip supply but the change is too fast for a company to react to so the dealers end up taking less discount but SRP (the company set price) probably will remain static. A prediction for multiple good winters would probably have more supply than demand, or at least closer alignment between them, which causes prices to moderate or even go down, one really bad winter will leave stock on the shelves. Dealers might play the game but it is much harder for a company to react to.

YEP....And soon nobody will be playing!

People will always play, they will just move towards compromise. Off brands, used, cheaper parts, etc.. The big brands built themselves off of the backs of the every day joe, unless they find that association again they will limit themselves ultimately in how much market that they can create (or save).