Features
Zen and the art of motorcycle business
New leader, overseas market jump-start SuperTrapp
By Deborah Garofalo
Smart Business Cleveland | September 2001
If you're not familiar with SuperTrapp, odds are you're not a motorcycle enthusiast.
The Cleveland-based manufacturer is well known in racing circles for its line of high-performance exhaust systems for motorcycles. According to former general manager Larry Trevathan, SuperTrapp's products appeal to the emotional horsepower of the recreational and hobbyist industry.
But like any company with a product dependent on discretionary income, SuperTrapp felt the brunt of the economic downturn that hit in mid-2000 and sent the recreational market skidding down the same tight and winding road.
Spending on discretionary products almost always trails economic fluctuations -- remember what the early '90s luxury tax did to sales of high-end automobiles and the marine industry -- and even though the company backs its products with power, SuperTrapp was not immune, says Trevathan, who in June and was replaced by Jon Hedges.
Hedges, recruited from Summit Racing, a well-known distributor in the performance after-market in Akron, has his work cut out for him with domestic sales running on empty. The slump that cost SuperTrapp 35 percent of its work force could have put an end to the after-market supplier just as easily. But it didn't. Working within a global rather than national market saved the day. To that end, Hedges says he is confident of the future and plans to build upon one of the company's core strengths -- its quality.
The large and fragmented market of more than 200 suppliers worldwide typically enjoys annual sales of between $300 million and $500 million. And, although it would be the easier road to follow, SuperTrapp has not put all of its sales efforts into the affluent American market that ties prestige and status to fast and furious motorcycles.
Instead, the privately held business survived and is on the rebound because it established sales in foreign markets. It is those markets that are providing SuperTrapp with much-needed growth during these soft economic times.
And, because business agreements are diversified on a country-by-country basis, the foreign sales that constitute 30 percent of the business are profitable and continue to fuel the company's engines, especially in the European markets.
The bulk of SuperTrapp's products -- 80 percent -- are sold through dealerships. Sales to original equipment manufacturers account for the remaining 20 percent.
For nearly 20 years, the company has worked with international distributors throughout Europe, including Germany, Italy and the United Kingdom, as well as in Japan.
Many countries have more stringent noise and emissions standards than the United States and the bikes can also vary dramatically from American-made counterparts, depending on where they are made. So to keep product development costs down, SuperTrapp established partnerships with organizations that provide research and development work on the targeted motorcycle brands on a country-by-country basis.
Under the agreements, partner companies develop products, submit testing to regulatory agencies and register with governmental authorities. After meeting compliance regulations in accordance with local laws, SuperTrapp manufactures and exports the product under its own name.
In 1988, after creating a strong reputation in the motorcycle after market, SuperTrapp was purchased by Dreison International Inc. and moved from its original location in California to Cleveland. In 1991, Dreison purchased exhaust system specialist Kerker Inc., which produces complementary systems, and merged it into SuperTrapp. Dreison's management housed the company in 75,000 square feet of manufacturing space under the leadership of SuperTrapp's management team.
While one Cleveland plant handles production and exporting, the "development activity has been decentralized in order to handle the issue of logistics," says Trevathan.
In Germany, dirt bikes are popular because of the country's narrow, condensed streets and the need for maneuverable, basic transportation. SuperTrapp's partnerships work there because the motorcycles are similar to American-made dirt bikes. The German dual sport bike is ridden as a dirt bike and is street legal. Hedges says German noise regulations are very strict, and the rest of Europe will eventually follow suit.
Japan also has very stringent laws regarding noise, a result of the souped-up exhaust pipes sold by SuperTrapp. Working inside Japan requires a different strategy and a slightly different structure -- the touch of the Japanese bike is very different than that of the American. So in 1998, SuperTrapp forged a relationship with a major Japanese manufacturer that handles all developmental work and manufactures the products under a private labeling agreement.
"It just makes sense for us to set up somewhat of a satellite manufacturing arrangement," Trevathan says. "It's our brand name and some of our technology."
So far, the strategy has worked, Hedges says, and SuperTrapp enjoys a significant share of Japan's market.
As the company pulls itself up by its bootstraps to overcome the downturn in the U.S. economy, other manufacturers are copying technology that made SuperTrapp products unique 20 years ago. But they've got a difficult gap to overcome. While those features helped establish the product over the years, its global presence leveraged the brand.
That leaves SuperTrapp in much better shape than its last 18 months would indicate, and though Hedges admits he faces a challenging future, the company's diversified customer base at least gives him an edge to work with.
How to reach: SuperTrapp, (216) 265-8400
Deborah Garofalo (dgarofalo@sbnnet.com) is associate editor of SBN Magazine.
SuperTrapp website
