Cycle News - Archive Issues - 1990's

~. ~ o ~ INDUSTRY IFMA Cologne Show Tooling.toward the free market . Atough ride for some manufacturers "W ' By Bruce Scholten e are optimists about ou r ch an ces in the fu ture," said Pavel Kol ar , an en ginee r from Motokov, the Czechoslovaki an tra ding organization wh ich markets Jawa and CZ mo torcycles abroad. The se tti ng wa s the recent IFMA, th e worl d's biggest motorcycle and bicycle show, held every two years in Cologne, Germany. One look around , at some of the 1634 exhi bitions from 42 differen t countries, gave evidence th at op timism a lone would not be eno ug h to turn th e 200,000 pl us sho w-goers into future buyers. But exhi bito rs are cheered by an upswin g in th e motorcycle mark et. In " West" German y sales are up 10.1% this year; regi stra tions , at 1.4 m illi on are doubl e 1980. So, though mountain bicycles were a top sho w item, the emp hasis rema in ed on motorcycles For years the Big 4 Japanese ma kers (H onda, Yamah a, Suzuki, Kawasaki), vyin g for pres tige as well as sales, have jazzed the Cologn e show with giga ntic displ ays. T hey fea ture new mod el bikes, colorfu l brochures, tan ned sales peopl e, rock mu sic - all the smoke and mirrors j ha t inhabit an ad-man's brain. Of course the European and U.S. brands appear, too. But Honda won agai n , as usual, one pundit saying Honda's new super-high-tech 600cc street bik e, the CBR 6ooF, out-point ed Kawasa ki's impressive bank of about 50 T V screens (displaying - what else? - exci ting new Kawasa kis in actio n). the ent husias m and friend lin ess of the vendors was a reminder tha t you meet the ni cest peop le on two wheels. The Czech booth seemed an appropriate p lace to sta rt , since it was not so long ago that CZ beat the J apan ese makers in a world motocross champi on ship. T he op tim istic Mr. Kolar proudly pointed ou t the wa ter-coo led mo tor and di sc brakes on the ne.w l25cc race bik e. It looked up-to-date, if not q u ite a world-beater. CZ has a proud heritage, but today produces only about 2000 racing dirt bik es a year. State pla nni ng caused its , recen t, well .. . czechered pas t, by forcing it into unhealt hy cooperation wi th Jawa , it s er stwhile riva l. A cu rren tly po pular econom ic th eory (called "diamo nd the ory" ) holds that countries are more Iikely to achieve export success in a given indu stry if they have seve ral domestic firm s competing for the sam e export market. In other words: J apan dominates the world motorcycle ma rket because it has four fiercely compe ting rivals, while the U.S has just one, Harley-Davidso n. Thus, accord ing to the theory , combini ng the energies of CZ and Jawa was a " no-no" - a nd that is why both have steadily lost world mar ket sha re. Ret oo ling a nd reorga n iza tio n are needed. Even if CZ does not find a joint venture partner from amo ng Ho nda , Yama ha , Suzu ki and Kawasaki, it will prob ab ly survive as a company. Motor- cycl e ac u vrues, including making engines for J aw a, account for less than a quart er of its earn ings . CZ's 7000 emp loyees ma ke pl ent y of expo rtable items, from tu rbochargers to compu terized machin e too ls. j awa 's future is more problematic. Its own proud hi story, of more than three million motorcycles sold in over 61 years, curren tly pal es beside its overstaffed work force and out da ted facilities. It does make fairl y modern (wo rd used advisedl y) tw o- stroke motorcycles and scooters. Most have been sold in barter to the Sovie t Un ion. But if Perestroika goes mu ch further, the Russians might renounce their agreements to import abou t 100,000 un its yearly. T hi s would be a death blow to Jawa. One ray of light remains - j awa 's 500cc four-stroke machines for ice racing an d indoor track racin g remain the world 's best. And Jawa may find an attractive su itor in Cagiva, the Ital ian man ufac ture r with deep fina ncial poc kets. ' Motorcycles from Zsch op au in Eas t Germany seem a little better eq uipped to weather the free market journey. MZ mo torcycles have a large product lin e (Abo ve) The new CZ 125 fr om Czechoslovak ia loo ks good, bu t is it a world-beater? (Lef t) " Dnep r" - p ride of the Soviet Union. T he Dn epr sidecar features an 800cc BMW motor. (Below) MZ of German y disp layed this bike that is powered by a 500cc Ro tax eng in e. That's a Simso n enduro bik e on the right, an other p roduct of " East " Germany. 12 Harley Davidson ;s exh ibit was mu ch small er, bu t well set up and wellattended by its legi on s of European devotees, Agains t all this largess, som e exhibitors look ed a little old ha t. Sin ce the recen t political changes in many soc ia lis t co untri es , severa l motor cycle makers have begun too ling ' down the roa d toward the free, competitive marketplace. For some it will be a gri m tr ip. Eco nom ist s wo u ld certain ly warn of co ld showers alo ng the way. Mak ers fro m these countries, in cluding Czech oslova ki a, " Ea st" G ermany, th e Peoples Repu blic of China, a nd for th e first time th e Soviet Union, came to Cologn e to ply their wares - an d seek out joint vent ures wi th more com pet itive Western firms . Some of their motorcycles ", looked like reli cs from the 1960s. But from mopeds to dirt bik es to street bikes wit h sidecars , a slick pro mo tio na l campaign with its ow n " MZ Magazin ." Another adva ntage is tha t 30% of East Germ ans - compared to 7% of Czech s - hav e a working knowledge of English . "Look over here," gestured Herr Christian Stein er, a veteran of 25 years with MZ, " here is our new 500cc model with the four-stroke motor from Rotax in Austria." Next Steiner revealed a prototype two-stroke model with a catalytic con verter. Ironically , MZ might find the free mark et road ro ugher than some of its compe titors will , precisely becau se it is fart her to the goa l! That is because after October 3 of thi s year, East and West German y will be reunited into one single nat ion. T o MZ, thi s means that after 1992, MZ's form erly dom estic mark et will legally be wide open to impo rts from ot her cou n tries in the European Com mu nity (EC). Nor are the J apanese giving MZ much breath ing space. Suzuki has p lan s to open abo ut 20 motorcycle sho ps th ere (in wha t was Eas t Germany and is now, follo wing un ificat ion , the eastern , part of German y) by the end of 19901 No t on ly that , bu t once MZ is competing in th e Europe' s single internal market, after 1992, MZ bikes wi ll be subject to in creasingly stringen t - and expertsive - environ men tal regu lations . How wi ll MZ survive? H err Steiner smiled, and exp lained, " MZ ma kes sim ple, dependabl e motorcycles which are po p ular in Europe. And we have a lot of expo rt potent ial in T hi rd Worl d countries like India. Our compa ny already does a lot of busin ess in th e Middle East, where th ey need simple bikes tha t can be repaired by the side of the road. In fact, I myself spent four year s for MZ in Baghdad, Iraq. " Steiner added that he had met many fine people in Iraq , " Bu t I do n 't care for this Saddam Hussein - he really is like a Hitler. " Recen tly there has been specula tion that MZ might em bark on a joint venture with BMW. Wou ld hitching a ride wi th BMW help keep 83-yearold MZ - once called DKW '- going 10 more years? Steiner rep lied, ': We are very happy to have good relat ions'with BMW , bu t a t present there is no agr eement. As for the , future, who knows?" At the BMW sta nd, where the more "champagne and ch ic" folks hang O Ul , BMW rep resent a tives gave coy, evasive answers to the question s of a joint venture wi th MZ. " It's hard to predict the fut ure," was the stock reply,

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