Kawasaki Motors Corp. U.S.A. is betting on a new, much smaller motorcycle to help spur sales of its larger models in a market that’s relatively flatlining.
The Irvine-based subsidiary of Kawasaki Heavy Industries Ltd. in Japan this month launched its Z125—a shorter, lighter and cheaper version of its bigger brother, the aggressively styled Z1000.
Some 2,000 of the 225-pound two-wheelers, 31 inches high at the seat, will hit U.S. dealerships for a first wave of sales in June.
“We are not looking at this as a volume leader for our company, but to introduce our product to a new customer, to provide a bike they can start on, and as they gain experience and want a bigger bike, they can step (up),” said Product Manager Croft Long. “This is a very new demographic opportunity for us. It fills a position in our Kawasaki lineup which we did not have before … We are testing the waters with Z125 to explore the possibility of growing the Z lineup in the U.S.”
The buyer will likely be an “entry-level rider that is just starting off and wants something that’s easy to handle,” or even a “veteran who wants a pit bike to run around the neighborhood.”
The Z125’s manufacturer-suggested retail price, like its looks, is “aggressive” at $2,999, Long said—well below the $12,000 average for a standard sport bike.
A competing entry by Honda, called the Grom, is priced at $3,200.
Post-Recession Blues
The move to stir sales comes as the U.S. motorcycle market remains “steady,” according to Bill Jenkins, senior vice president of sales at Kawasaki.
The industry, unlike the automotive sector, never quite recovered from the 2009 recession, he said. The period marked a low point, with sales down about 55% from a 25-year high of about 1.1 million units in 2007.
The Irvine-based Motorcycle Industry Council estimates sales have ticked up since then, reaching 575,000 new models last year.
“It’s still off about 40%, and very competitive,” Jenkins said. “Kawasaki has different parts of the industry where we perform very well. Sport bike is very (much a) stronghold for us, along with the off-road (category).”
Branching Out
Parent Kawasaki Heavy Industries—which manufactures transportation equipment and industrial goods, including ships, hydraulic equipment, jet and gasoline engines, and industrial robots—has a market value of about $4.8 billion. It posted $8.8 billion in revenue for the nine months that ended Dec. 31, according to its January earnings report. Its U.S. sales totaled $2.2 billion, up 12% from same nine-month period a year earlier.
Kawasaki Motors Corp. U.S.A. is part of a Kawasaki Heavy Industries subsidiary, the Motorcycle & Engine Co., which had global sales of about $1.8 billion over the same period. Jenkins declined to provide specific revenue figures for the OC-based operation but said the domestic market is “the biggest one for Kawasaki.”
The U.S. operation also markets and distributes all-terrain vehicles, jet skis and side-by-side utility vehicles that are manufactured at its plant in Lincoln, Neb.
Kawasaki’s strongest seller is the side-by-side line, which also features an expanded 2016 model lineup.
“We added a whole new segment we didn’t have before—fast side-by-side,” said Kevin Allen, manager of public relations and brand experience. “They top out at 30 miles per hour, and our new ones are 45-plus miles per hour.”
Other recent changes in Irvine include outsourcing logistics to United Parcel Service Inc.
“Instead of focusing so much of our efforts on maintaining logistics and distribution, we now depend on UPS for that, and we can focus on unit delivery from the factory to the dealers and marketing our products in the right way,” Allen said.
The company, which recently marked its 50th anniversary, is also moving its 250 workers to its new headquarters in Foothill Ranch come June. It signed a 15-year lease on 200,000 square feet at 26972 Burbank, former home to fast-fashion retailer Wet Seal LLC, which moved to Irvine Spectrum area.
H. Hendy Architects in Newport Beach handled the redesign of the building’s interior, including modifications to allow more natural light, second-floor offices, and an expansive ground floor.
