Cycle News - Archive Issues - 1970's

n ~ ~ ~ I e o ~ a ~ z" , n C " ~ ~ b 't- 'r." "r q as I or a mandate to a dealer organization a nd th e custo me rs that th e deal ers serve and , on th eother side of the coin, to KTM o f Aus t ria to provide a ma rket ing outlet wit hin this cou n try tha t both represe nts t he pro d u ct throu gh promotions, ad vert ising and a deal er network . O u r p rim e objective is to represent KTM in the same m a n ner Penton Im ports had. The one thing that will help is that K'FM's invest ment in the market from a capitalization sta ndpoint will allow us to have a little more strength which had been difficult to achieve with all the factors th a t Penton Im ports had been fa cing. For example t h ings like ins urance whic h KTM has world wide, but which Penton Imports has ha d to foster th e expe nse; pr oduct lia bility is a p rim e exa m ple. These th ings will translat e into promotional items for dealer su p' port in a variety of areas. Nothing is , going to change that Penton started. What we will do is to try a nd maintain and strengthen thos e areas when and where we can within ou r means. CN: How will the recent changes effeet the future of Penton/Hi-Point? John Periton: The change will strengthen us fr om a finan cial point and bring us back into a profit picture. For th e la st two or th ree yea rs, th e Hi -P oin t produ ct .has been footing the bill for the operations here. I believe th e motorcycle operation was just about break ing even. We were working our butts off and breaking even and keeping the company going with the Hi -Point product. You will see within about six weeks a move forward b y Hi-Po int , We are go ing int o some other product lines-. There is no private or independently owned motorcycle distribution · unless you consider Ted Lapadakis (KTM Imports which serves nine western states) of any size left. As I said before it is not economically feasible or profitable to distribute motorcycles in the U.S . today. For the last two yea rs everyone. with the possible exception of HarleyDavidson , has not seen a glorious profit picture. Books and statistics are good. but I'm in the business and I know what I'm talking about. You can't bring motorcycles into the V .S . and start discounting them, warehousing them , paying all the taxes on them and then go home with a profit. That's the sum total of it. It 's a very sad picture for us right now . but I think it will corre ct itself some. Today about 90 % of all motorcycles in the V .S. are imported. With the dollar being devaluated to the point where they (U.S. Government) are going to put big tariffs on products coming into the States. Hell , that's eas y. All you do is devaluate th e do llar to whe re the for eign cou n tries ca n't make th e product to sell ove r here with ou t raising th e price . That's as simple as ABC. Then you're nob od y's enemy. but the people over th er e. That is exactly wha t has happened to the motorcycle im port bu siness. That is why right now it is very. very rough for any motorcycl e com pa ny with the possible exception of Honda. who have their automobile sales. However. the market is there for after market accessorres . Hi -Po int is going into usa ble items much stronger now . We're going int o the tire business stronger, we're going into the chain business stronger. we're going into the oil business stronger. These are usable items. There used J O be a lot of specialty items in the business, but. if your motorcycles are built right, the after market demand for those items is less. What you have to do is get into the replaceable items. • Hey , we build a wheel for that motorcycle (Pen ton) today that is virtually indestructible. So. now chances are that for the average life of that motorcycle the rider never needs a rim replacement. So that bu siness d ries up. A lot of accessori es become history or are a one-tim e replacem ent. W e were hea vy in th a t area. All this means is t hat we now have to look to the replaceable items. Jack .Leh to: I'd like to add a word here on the strength of Hi -Point. A lot of the com pon en ts tha t you see on various brands of motorcycles today were first seen on the Penton motorcycle. Items like Ce ria ni forks , Motoplat ignition a nd ot hers have given ideas to other manufactu rers. Jo hn was the one to perceive that th is was the step th a t some body had to ta ke to mot ivate new de velop me nt. ' John Penton: Did you kn ow that the fi rst com peti ti on motorcycle to be bu ilt using th e foam air filte r was th e ' Penton ? If you go back you' ll find that th e basic (off- road) motorcycle today was built around ideas first seen on Penton. CN: How can the new enterprise be called KTM America , Incorporated when you have another distributor (Ted Lapadakis) in the western states? , Jack Lehto: The western distributor is called KTM Imports. They will continue to service nine western states. Right now th is transition is only for what was the territory served by Penton Imports. The Penton Central office in Amarillo. Texas will remain be able to give full time concentration to it . Logistically we'll spend 100% of our efforts and programs d evoted to t he deale r a nd hi s cust omer. CN : Will we now see more of an em p hasis toward motocross rather than off-road r aci ng; J ack Lehto: We will use the fact tha t KTM swept the top three places in th e 250cc Worl d Championsh ips. but that isn 't really the impo rta n t part of marketing KTM her e in the U. S. 1 don't thin k that plays a n important pa rt of th e custom er buying the bike . W hat we want to do is strengt hen ou rselves, if we ca n , in th e m otocross a rea at a regional level at this po int in time. I don't have any plans a t th e moment to get into motocross on a big scale be cause we have th e e nd u ro program whi ch we want to continue. W e have to look at our st re ngt hs and, concentrate t here so that we don't lose anything in that area . W e want to develop programs so that we can expand into other areas as we go along. One will be motocross , but the enduro, cross-country type events will continue to receive our support. There has been an investment by Penton Irnports into those areas and we don't want to just push it to the wa yside and st art a totally new thing. A motocross program is in our fu ture thinking, but that will com e as time and demand dictates. W e hope to 118y God, I'll tell it to IOU exactly like ,t is." handling the motorcycles and we will continue to keep a stock of parts th ere to service their market needs . The -bu lk of everything will be here in Lorain (Ohio). We will set up a system whereby Penton Central or Hi-Point Central as it probably will be called, will be in direct contact with us so that we ca n assist in ord ers that they cannot fill. The item will go directly to the de aler. CN: Who will form the new management at KTM? Jack Lehto: There are titles as such, but actually we are all working together as a team. I will function as general manager for the operation with Don Rosene as sales manager and Rod Bush as service manager . Doug Beam will be the parts manage r. He is very fami lia r with the product , ha ving worked for both Husqvarna and Sachs/Hercules in a similiar capacit y. Myself, Rosene and Bush all work ed for Penton Imports. A number of persons from Penton are working for us in the same areas th at they worked in for John. That move enabled us to start with people familiar with the product and make th e transition very smooth and orderly . , CN : How will the change from Penton Imports to KTM America effect dea lers ? J ack Lehto: I ' don't see where there will be any real effect at all . We're maintaining the same accounts and nothing in our program or policy is going to change from the way it was with Penton Imports. Our biggest strength will com e from the fact that we will be able to concentrate entirely on handling the motorcycle. .We will grow into that area . What we are talking about is helping the deal er at the dealer level. ' CN: H ow will the r ecent changes effect the management at P en ton/ H iPoint and who will be the key personnel involved? J oh n P en ton: The change won 't effect us at all . There will be no ch anges at all. What we're going to do is start making money. What you must understand is that Penton and H i-Point were always consolidated so that although some personnel are now working for KTM the show goes on the sa m e as usual. What you will probably see is us get bigge r and stronger at H i-Point because we now ha ve som e ca pi ta l fr ee to operate with. CN: What will be the changes at the Penton Central and West offices? John Penton: There will be no cha nge in op erations other than they won't handle t he motorcycl es and parts a nymore. However, Penton Central, as Jack has alr~ady mentioned , ~iIl at this point connnue to keep an mventory of KTM parts for distribution. What we probably will dois open a couple more outlets for H i,Poin!. 1 can't commit myself to where nght now , but you will see more regional type offices. CN: Will t he change affect the dealer network from H i-Point's point of view? John Penton: I don't think there will be any changes. Thereis no reverence or loyalty in America anymore. The only loyalty there is, is to the almighty dollar.. If the dealer can stay al ive with our product, if they can make money wit h KTM then that will determine wha t happens. CN: Will the dealers have a stronger representation from Hi-Point now that you are going to put your full time efforts in this direction? Jack Penton: Definitely. The dealers will get better service and represen· tation all th e wa y because we will now cha nnel all our efforts into th is on e direct ion . CN: W hat will be the competition program, if any, for Hi-Point? John Penton: Tha t's a very good question. We are goi ng to be around. T he program will fa ll under KTM and depe nd, I gu ess, on how well the two of us get along. Actually, right now it appears that J ack Penton will be in Florida for the motocrosses represen· ting H i-Point this yea r. From there I don't have an y real idea what will happen. What it really depends upon is how badly th ey (Jack , Tom and the others on Team Penton ) want to ride. It's up to them . Jack Lehto: You'll see Jack and many of the other guys who hav e been riding Penton continue doing their efforts. We will continue to com pe te on both the regional and national level with programs where the rid er puts' forth a sincere effort to win. I don't think any company will su p port a racing effort unless they have that kind of thinking from the representative they have out on the track. Even in the past it has really been up to the rider what can he do to represent Penton for Penton and for the dealers. The same thinking exists for KTM . You can't have riders unless they want to win . This is indicative of KTM's efforts in Europe and we'll keep the same philosophy. We realize that we have to be out there visible to th e dealer and the consumer. CN: What will the change mean to the key people who were at P en ton Imports? John P en ton : Am I losing any key people? Hell , Jack Lehto was a key, Don Rosene was a key. We're losing two of our key people. But what it really boils down to is that we have a bunch of motorcyclists up here that believe in motorcycling and are doing the best damn job they can to keep motorcycling where it should be. That's what the whole thing is about. We don't have the millions to lose, we don't have a damn penny to lose . At the same time we don't . want any dissatisfaction among the dealers and the people who ride a Penton.t'That is very hard to understand unless you're involved in this thing. You ca n' t go out and ride with these people and have them say 'H ey, you son of a gun, you sold me down th e rive r.' It 's frustrating because it's the bankers and the govern· ment tha t is doing the dictating. We are only th e little pawns th a t th ey are pushing around so what you do is try to make them push you the way you want to be pushed. CN: Would you both sa y that the move that has transpired has been the best for the business, the dealer, the rider and all others who are involved? J ohn P en ton : I would very definitely say 100% yes. Jack Lehto: I would agree. We are down to the grass roots level with our philosophy. KTM is that way right from the top man on down . One key thing that will su pport us is that everyone involved here and in Austria is involved in motorcycles. All we want to do is to continue on and to follow the grass roots philosophy that John has had for many-years. J ohn Pen to n : I can very truthfully say that I am bowing out of, the motorcycle end without any regret . I've been through too m uch of this dollar devaluation . I love the accessory business. The motorcycle end got me into the accessory business and I'm very tha nkful for that. This isn't the end of motorcycling (for John Penton). • > 21

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