As economy rebounds, used bikes take off

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Used motorcycle sales have heated up, due, in part, to the flash of warm weather earlier this spring.

Some dealerships are clamoring for used bikes, especially as motorcycle manufacturers have produced fewer new ones this year.

"There is a little bit of a scramble now for inventory," said Chaz Hastings, owner of Milwaukee Harley-Davidson.

In December, Hastings said, a Harley dealership in Europe offered to buy 24 used bikes from him. But he rejected the offer because it would have cut too deeply into his own inventory of used motorcycles.

"I would be in a lot of trouble now if I had done it," Hastings said.

Locally, Bruce Rossmeyer's Destination Daytona Harley-Davidson almost ran through its stock of used motorcycles during March's Bike Week.

"At the beginning of Bike Week, about 70 percent of our sales were used bikes when we are normally one to one, used to new," said Shelly Rossmeyer-Pepe, who oversees the dealerships for the family enterprise.

Milwaukee Harley-Davidson recently had a used Fat Boy on its showroom floor with a customer deposit on the bike and two backup offers. There's been increased interest in used bikes that, when new, sold for more than $20,000.

"Now, if you can get a used 2006 Fat Boy for $12,000, it opens up the market to a lot more people," Hastings said. "As the economy comes out of the funk we have been in, people are being more careful about how they spend their money."

The less-expensive bikes are selling at Richard Bell Power Sports in DeLand.

"Anything under $4,000 is flying off the floor," said general manager Charles Bell. "It's something people can pay cash for because they are not getting the financing."

Last fall, used bikes were "real tough to sell," said Jeff Marshall at Wisconsin Harley-Davidson in Oconomowoc. "I think it was because there were so many bikes out there."

Rossmeyer had so many used motorcycles, it started an online auction program to increase sales on a worldwide basis.

And the economy was forcing people to choose between keeping a roof over their heads or buying a motorcycle, said Chris Gray of Daytona Fun Machines.

"Six, eight months ago, used and new were both slow. Let's face it, there is not a whole lot of industry in Volusia County and people were moving out. We sold bikes, but it was half of what we used to sell," Gray said.

But, as the economy has improved, more people have decided to go ahead and buy a motorcycle. And if they can't afford a new bike, it could be a used one. Rossmeyer even mailed letters to customers enticing them to trade in used bikes for new ones to increase the inventory of used motorcycles.

Gray has seen used motorcycles sales increase in recent weeks, but they usually come with a trade, which helps maintain a healthy inventory level.

"I think people are starting to come out from being cooped up financially," said Dan Burdett, general manager at Action Power Sports, a Waukesha, Wis., motorcycle dealership.

However, wholesale prices of used motorcycles, at dealership auctions, have risen about 30 percent in the last two months.

"At least 30 percent if not more. They are not in our favor right now," Rossmeyer-Pepe said.

Harley-Davidson has throttled back motorcycle production -- resulting in shortages of some models, according to dealers, and making used bikes more appealing.

The world's largest maker of heavyweight motorcycles has reorganized its business through layoffs, factory closures and shutting down Buell Motorcycles, a sport-bike division based in East Troy, Wis.

Some Harley dealers worried about getting flooded with used Sportsters, the company's least- expensive bike, following a national sales promotion that protected the trade-in value.

But Harley kept a tight rein on production, so the glut of used Sportsters did not materialize, Hastings said.

Harley-Davidson also is starting to make 2011 motorcycles earlier than usual, in June, giving dealers a longer sales period, which Rossmeyer is excited about.

Suzuki, one of the largest Japanese motorcycle manufacturers, also has not built as many bikes for 2010.

"They're selling off 2008 and 2009 inventory at hugely discounted rates," Burdett said, which has hurt used motorcycle sales.

The motorcycle market naturally picks up with warmer spring weather and a better economy.

Justin "The Bald Guy" Asher said used motorcycle sales at his place, Red Ember Cycles on Beach Street in Daytona Beach, have been "phenomenal." Sales, along with a new body shop and his custom work, will enabled him to move into a bigger shop on Ballough Road in June.

"This is still the motorcycle capital of the world so we are busier than most places," Asher said.

-- Business Writer Bob Koslow contributed to this Milwaukee Journal Sentinel report.

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