Effective Jan. 1, North American motorcycle dealers can sign up for wholesale financing through GE Capital to stock Royal Enfield’s “hipster” motorcycles.
The brand has roots dating back to 1901, when British arms maker Enfield branched out into motorcycles that were sold with the slogan, “Made Like a Gun.” Today the manufacturer is based in Gurgaon, India. The company announced its partnership with GE Capital in late November.
Powersports Finance spoke with Rod Copes, president of Royal Enfield North America and a former senior vice president of global sales and customer service at Harley Davidson, about his outlook, in light of the GE Capital partnership.
Powersports Finance: Are you planning to offer finance incentives for the dealers that sign up?
Rod Copes: Our initial plans are to provide the dealers with our products and to spread the awareness about our brand among the customers. So, we’ll pay for the first couple of months of financing for the motorcycles for them [dealers] to carry the complete line. We’ll also take the pressure off the dealers seasonally, by picking up monthly interest rates in the months when the dealers have slow sales.
PF: How many dealers do you expect to sign in 2016?
RC: We are going to obviously ramp up throughout 2016. We are confident we will have around 100 dealers across mostly the U.S., and maybe 15 or so in Canada signed up by the end of the year. We think that’s a good start for our brand. Dealers that sign up to carry Royal Enfield won’t be forced to use GE Capital, but they will be required to satisfy GE Capital’s standards.
PF: Will Royal Enfield consider forming a captive?
RC: Having a captive finance firm makes it a lot easier to just operate, of course, but there still are risk requirements and negotiations in place. At this point, our volume and size are going to be significantly lower, than that of, say, Harley Davidson, so we are not planning to establish our own captive yet. The fact of the matter is, most motorcycle companies use GE Capital, and to be honest, there aren’t many alternatives.
PF: What is your outlook on the industry overall?
RC: Since the Great Recession, motorcycle retail sales have been growing, over the past six or seven years mainly, so there is kind of a slow, steady growth. Dealers, as well as consumers, are getting healthier financially, and are more open to looking at financing options. Dealers learned a lot since the economic downturn on how to operate tighter, so they are mostly investing in inventory levels. But the dealerships that are growing and are successful, are definitely leveraging low rates with financing.
PF: What’s the main change in your branding now that you are handling the distribution?
RC: The previous distributor didn’t have a lot of resources, what we are doing is providing a lot more resources. [Editor’s note: Previously, Kevin Mahoney, chief executive of Baltimore-based Classic Motors, was the sole distributor of Royal Enfield bikes.] We will be more proactive in targeting various demographics. We think our brand, as well as our product, lends itself well into millennials; the motorcycles have a cool, retro look, “hipster,” if you like. This year we will be targeting that audience.
This story was originally published in the January Auto Finance News issue.