|
Newsletter
 You must be a registered userto receive our newsletter Register Now!
Subscriber Login
Welcome Anonymous
Site Navigation
Other Cool Sites
|
Viper Wants Its Vroom Back
Big Lake's Viper Motorcycle Co. hopes to throttle up production of its high-price bikes after missing delivery for the spring season.
Minnesota - In what would have been its first spring season of sales, Viper Motorcycle Co. ran into a speed bump.
The Big Lake-based company is counting on sizzle and speed to sell its cycles. With a huge engine that provides top speeds of more than 150 miles per hour, Viper's cycles are aimed at high-end customers who can afford a price tag of $30,000 or more.
Viper was geared up to start production of its custom cruisers back in January. With orders for 200 motorcycles, the company appeared poised for a quick start. But when defects started to show up in the bikes' component parts, Viper put the brakes on production.
"When we didn't start shipments in March, a lot of dealers said they want shipments before spring," said John Lai, Viper's president. When Viper couldn't deliver the bikes to motorcycle showrooms for that peak selling period, orders fell to about 70.
This spring the company regrouped: It laid off a few employees, reduced the amount of space it leases at its Big Lake facility and contracted out its parts manufacturing to WSI Industries in Monticello.
Earlier this month, Viper raised $600,000 in a private placement of stock. The cash will allow the company to build up its parts inventory and ramp up production, Lai said.
"We'll ship a handful of bikes this month," he said. Once Viper shows it can maintain production, the orders should come back, Lai said.
Viper's experience is not out of the ordinary for a small start-up. When the Pioneer Press interviewed Lai in January for an earlier story, he stressed that the company was focused on starting small and not trying to grow too quickly, something that contributed to the demise of Excelsior-Henderson Motorcycle Manufacturing Co. But even Viper's modest beginnings have been expensive. The company has burned through almost $26 million since it started up in 2002.
In 2004, Viper sold 25 motorcycles using an engine from another company and generated about $600,000 in sales. Since then, Viper has developed its own engine technology to set it apart from the crowd. In turning to WSI for its parts, Viper sought a manufacturer with experience in the motorcycle market.
In the motorcycle industry, "We're the guys," said Mike Pudil, CEO of publicly traded WSI. The company makes parts for Victory, Medina-based Polaris's line of motorcycles, as well as Indian Motorcycle, a storied name in the industry.
A few months ago Viper signaled its confidence in WSI, selling its supplier the computer numeric control machinery that Viper had been using to carve its engine blocks out of billet aluminum, a shiny metal that also distinguishes Viper bikes from most competitors.
Viper's low-cut cruiser models are chasing a more affluent customer than buyers of the Victory motorcycles made by Polaris, most of which sell for under $20,000.
The market for high-end, high-performance motorcycles like Viper's is uncertain. Brands that would compete with Viper - including Big Dog and American Ironhorse - have seen declining sales recently, said Don Brown, a motorcycle industry analyst. "All of those companies are in trouble," he said. "Demand is just not there."
The troubles even extend to industry giants like Harley-Davidson. That company's stock was trading at $75 per share last fall and closed Friday at $62.48.
Harley's fortunes have slid on slack demand and worries that homeowners who are facing foreclosures on their mortgages might start defaulting on other consumer loans as well.
Source: Pioneer Press
This article contributed by editor on Saturday, July 14, 2007 (18:28:14)
Discuss this article (not started)
|
|
Related Links
Article Rating
Options
Today's Big Story
Advertisement
Motorcycle Rider Survey
In today's tough economic climate, how many events will you attend this year?
|
More about Minnesota
