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Why has only one company successfully entered the MX market since 1985?

June 3rd, 2008 · 2 Comments · Politics of Riding, Technology

cobrajumpTo my knowledge only one (1) company has successfully entered the motocross market since 1985 – the small Hillsdale, MI firm of Cobra Motorcycle Mfg. What did Cobra do? They brought innovation to a market the Big Four were ignoring. They met a need. They built good products – right here in the USA.

Once – in almost 30 years – has new blood successfully entered the motocross market. And they only did it in minibikes – 50cc-85cc. Ask yourself – is this really the best it can be? It’s difficult to make a credible claim than an industry (any industry) is healthy and competitive when it’s consisted entirely of the same five (really four) suppliers for more than 25 years. Are we really that naive? Or, like the Soma pills in Orwell’s 1984, have we swallowed the company marketing sedative so long we no longer care to see reality?

A little background

Back in December I wrote an article about how production-based racing has affected the motocross world. The article got quite a few readers (it was first featured over at McCookRacing.com) and drew fire on some of the discussion groups. People came away from reading it with a lot of different opinions, but it was clear that almost no one got my main points, which are these – the single-minded, all-encompassing “production bike” mentality that has consumed two-wheel racing has had a lot of negative consequences. And we have all been so totally brainwashed with it that most of these consequences are completely invisible to us.

Production-based racing is a great thing when it is provided as an alternative to hand-crafted racing machines. But take away the incentive and motivation to build handcrafted racing machines and you have an anti-competitive, controlled marketplace that ultimately provides less choice, less innovation, and higher costs. Think about it – motocross racing is now so thoroughly dominated by four global corporations (KTM is a bit player that exists solely at the behest of the Big Four to “prove” they are not anti-competitive. Ducati remains in road racing for the same reason.) that sanctioning bodies and promoters will do almost anything to keep them happy. Does that sound like a healthy environment to you?

But it’s not just that. Production-based racing stacks the deck for the factories – in an obvious, definable way. Here’s a quote from Cycle News journalist Henny Ray Abrams talking about the proposed 2009 AMA road racing rules in Cycle News issue 23, June 11, 2008:

The closer racing is to production, the greater the advantage to the factories. Power isn’t the issue – it’s torque. The factories can produce parts that aren’t available to privateers. They can also produce parts that appear similar in every way to the production unit, but are about as related as Ben Spies is to Ben & Jerry’s

Road racing isn’t motocross, but the parallels are clear. Setup your racing rules for the factories and pretty soon you have a self-reinforcing loop that guarantees no one new ever disrupts the big corporations’ neat little world. Factories love production racing because it controls competition, not because it benefits the racers.

We are now on our fourth full generation of motocross racers who have no idea that a competitive bike can be fielded by anything less than a global mega-corporation. And they are right. It would probably cost $50-$100 million dollars to enter the market with a competitive dirt bike that could sell enough copies to meet homologation requirements and pay for its development and manufacturing costs. Even the venerable Harley-Davidson (via its Buell subsidiary) gave up after a brief flirtation with the idea.

What is reality?

Reality is that very few successful forms of motorsport are restricted solely and completely to production-based racing. Here’s a quiz for you. Name a successful, well-known motorsports franchise with the following characteristics:

  • Requires every racer, every championship, and every discipline to race vehicles based solely on what a major manufacturer produces
  • Restricts their entire racing field, in every class, to the homologated machines of a handful of multi-national corporations.
  • Has achieved success and popularity without a single new manufacturer or constructor entering its ranks in the past 30 years.

Championship Off Road Racing (CORR)? Nope. IndyCar? Nope. F1? Nope. American LeMans? Nope. Rolex Sports Car Series? Nope. How about dirt track racing? Sprint cars? Midget cars? Nope, nope, and nope. Not even NASCAR, arguably the most successful motorsports franchise in the world – one that even has Stock Car in its name – doesn’t require production racing in any of its championship classes.

But motocross (and nearly all motorcycle racing) is quite literally defined by these characteristics. Every so often an economics genius with a degree from Obvious State pipes up in a newsgroup with a comment like “Motorcycle companies are in business to make money. There’s nothing new about that.” I’m always amused by the attitude of such people. Defense contractors, cell phone companies, mortgage bankers, and stock brokers are also in business to make money. I wonder if they have the same laissez-faire attitude toward them? Do they blithely accept that whatever such companies do is acceptable and provides the best options for customers? Or do they think these companies do whatever they can to stave off competition and manipulate markets in their favor? So why are motorcycle companies exempt from this same healthy skepticism?

What does this mean?

I’m not arguing that big motorcycle companies are bad. They aren’t. I am arguing that blindly accepting the Big 4 view of the world, and quietly rolling over for whatever they do has taken a toll. The bountiful cottage industry that existed in motorcycle racing from the 1920s through the 1970s is dead. The talented framemakers of the past have been relegated to building replicas of (production) vintage bikes (because even in vintage we can only race production bikes). Even in flat track – which is the last remaining outpost of the custom frame – the AMA tried to kill custom frames as one of its last official acts. There is no room for innovation or the small startup company that wants to do things its own way. There is only one way, the way of the Big Four. All the business, all the sales, all the development must be an offshoot of what the Big Four want to sell.

None of this is suggesting that we don’t have good bikes available to us. We do. We also have lots of beer available to us on the store shelves. But did you know they are nearly all produced by the same five companies? And that soon it may be the same three companies? Yes, your local grocery’s refrigerator case is filled with dozens and dozens of different, brightly-colored cans and boxes, but there are not dozens and dozens of different beers. There are a handful, with minor variations supported by different packaging and advertising campaigns. Thankfully, the beer industry doesn’t have a big governing body that makes it illegal for small brewers to come up with new ideas and (eventually) get them to market. And the micro-brewery industry is pretty healthy. So why is it so hard to imagine a smaller, more creative subset of the motorcycle industry?

What can be done?

Perhaps it’s time to rethink the production rule in motorcycle racing, time to let a different drummer set the beat. Not in professional racing, certainly. That horse is long gone and nothing is going to wrest professional motorcycle racing out of the hands of the Big Four anytime soon – too many people have built their empires sucking the Big Four teat while we, the motorcycle racers pay the price of extremely limited choice.

But maybe there is opportunity at a different level. Maybe there is a place – somewhere between vintage and the 450f – that a different type of motocross bike can exist. Maybe there is a market for a sport that is competitive on bikes that are lighter and less optimized for Supercross-style racing, racing that is fast and fun but a little less demanding in the death-defying category.

I have no idea, but I do know that you can have a lot of fun, and really good racing, on different technology platforms than what the multinational corporations provide. Car racers of all kinds prove it every weekend. I have some thoughts on what such a platform should strive to achieve. More on that in Part II.

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2 Comments so far ↓

  • Giles Nelson

    Hi Terry,

    I think there’s a couple more players besides the big 5, in Husaberg and some Italian models that I’ve seen locally, but I don’t pay too much attention to the modern bikes.

    I think the massive amount of investment in tooling, engineering and machining talent, racers, racing, sales, support infrastructure, etc, makes it very hard for a new competitor to come on the stage. I view it as a pretty mature market with little opportunity for new companies to get in.

    If I had investment dollars to spend on a new venture like that I would look elsewhere for more opportunity.

    Giles

  • Terry Frazier

    Hi Giles,

    I hope you don’t mind I changed the title of your reply from “RE: Why has only one…” Good comments. You’re right, there are several other companies that market motocross models – Husaberg, TM Racing, ATK, Husqvarna/Cagiva, and probably others. but if you think about what motocross is, none of them can be said to have successfully entered the motocross market. Motocross is racing, and if you don’t have a successful race bike you’re just selling a dirt bike marketed with a motocross label. Combined, these other companies have zero presence in pro racing – no privateer in his right mind would ride one – and I’ll wager if you randomly picked 100 local races across the country you wouldn’t find more than 1 bike from any of these manufacturers on the entire day’s gates – maybe in an over-40 C or Novice class with some guy who just wanted to be different. None of these bikes will likely ever be in a magazine shootout for 250cc or 450cc MX bikes. This is a comment on the state of moto-journalism as much as the bikes, but it says something important about the state of the market.

    Whether it be due to reliability, availability, distribution, technology, or whatever, these bikes just aren’t competitive in any meaningful way. And for all practical purposes motocross today is defined by the Big 5. For many companies the motocross designation just means the bikes have a close ratio transmission and no lights. It doesn’t mean they are serious race bikes. Only little Cobra has done that. They go head-to head with KTM and win amateur class championships in the 50cc and 65cc classes. That’s what I mean.

    I agree with your other points – massive investment, market maturity, little opportunity. And that’s why I ask the question – if these things are true, how can we say the sport is healthy, poised for growth, etc? Does growth now mean nothing but TV revenues? I also understand why you don’t pay much attention to the modern bikes. These same problems make for a boring market. That and the fact that all the bikes look the same.

    What I’m suggesting is that maybe it’s time to think differently about this – something we seem to have lost the ability to do over the last 30 years. I can’t imagine anyone in their right mind would take on the Japanese juggernaut in their own game. Why would they? To paraphrase Richard Branson, the best way to become a millionaire in the modern motocross market is to start out as a billionaire. But when there is such a wide diversity of machines in most other forms of racing I continue to question why we settle for this sad state of affairs in a sport we all love. I’m writing another post to explore on one possible way we might create some of that diversity.

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