[firecaptp7]

 

[Richard230]

Talk about coincidence, today I was at a motorcycle factory luncheon and happened to be sitting next to a lady from out of state who mentioned that she owned a multi-line motorcycle shop back east and had been considering becoming a Royal Enfield dealer.  She thought the bikes looked nice and might be able to develop a following in the U.S.  However, she said that RENA wanted her shop to take out a "very large line of credit with Wells Fargo Bank" as part of their franchise agreement and she said that was probably a deal-killer for her as she wasn't too enthusiastic about tying up a good portion of her available credit to become a dealer for a brand that didn't have much exposure in the U.S.  It was just too much of a gamble.  So she was considering becoming an electric motorcycle dealer instead as their financial requirements were much more reasonable and it looked like the future to her.

[Arizoni]

I don't know why she would have a problem with getting a credit line with Wells Fargo.

They just got caught creating millions of unauthorized bank and credit card accounts.

Well, maybe after they fired 5300 employs for creating these accounts, finding someone to do the paperwork could be a challenge?   

[2014BulletC5]

I talked to my local (former) RE dealer last week. He said he is working with RENA to keep his status as an authorized factory service center. He's also hoping to work something out for sales.

He's a small time business surviving on consignment sales and servicing of older bikes. But he's also been dealing with Royal Enfield since 1995 and is very familiar with the bikes. Why would RENA not continue to have him as part of their sales network?

[Arizoni]

IMO, they would try to keep him, if only as an authorized service center.

One of the concerns with people who ride long distances is the availability of a service center that knows what it's doing and is willing to work on their motorcycle.

Although most RE riders keep their journeys to short trips, there are more than a few who do long distance rides on their Bullets and they are rightfully concerned about the availability of service and parts.

IMO, having certified/authorized service centers in many locations is a good selling point for a brand even if they are not willing to sign up for being a true dealer.

[mc35803]

IMO, they would try to keep him, if only as an authorized service center.

One of the concerns with people who ride long distances is the availability of a service center that knows what it's doing and is willing to work on their motorcycle.

Although most RE riders keep their journeys to short trips, there are more than a few who do long distance rides on their Bullets and they are rightfully concerned about the availability of service and parts.

IMO, having certified/authorized service centers in many locations is a good selling point for a brand even if they are not willing to sign up for being a true dealer.

Dang it Arizoni.......There you go again....making sense!!!


I an kicking myself for not taking advantage of our hosts recent sale to buy the mounting hardware for saddlebags etc for my C5.   I am very interested in trying the C5 out on a 1000 mile trip and need room for some minimal camping gear and RE spares.....

[Kevin Mahoney]

Any dealer of any size has credit with Wells Fargo (formerly GE capital finance and the dominant player in the industry) or the manufacturer to finance the motorcycles in their showroom. There are almost no dealers of any size (certainly not major multi-line dealers) who do not finance their inventory. Manufacturers normally require a dealer to have a line of credit with a specific amount for their specific brand. In many cases it is part of their dealer agreement with the manufacturer. For example a dealer might have a $500,000 LOC with $100,000 set aside of each of 5 brands. (These are not actual numbers, it varies from manufacturer to manufacturer. This assures that the dealer has the capacity to take the amount of bikes they have committed to take. The dealers pays interest on the bikes that are financed. Some manufacturers give "free flooring" for various periods of time. For example the dealer might not have to pay any interest for 30,60, 90,120. 180 days or whatever the manufacturer is giving at any particular time. This should motivate the dealer to move the unit while they are not paying interest.

It is a no-lose business for Wells. The dealer guarantees the debt as does the manufacturer. GE checks the inventory every month to make sure that no bikes which are financed have been sold and not paid off. If the dealer can't make his payments Wells Fargo will repossess the inventory and make the manufacturers pay off the dealers debt. Over the years it happened to us many times. Just a cost of doing business. You can then resell the bikes but they are normally distressed and you will most likely take a loss.