Hodaka: The Early 1970s

The Hodaka Motorcycles Story Part Four
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This excerpt is from Hodaka Motorcycles by VMX magazine editor Ken Smith. You can find reviews, videos, and more at the book’s page. Click to learn more!  

Hodaka: The Early 1970s
Returning to the early '70s at PABATCO, they were well aware their products, such as the Combat Wombat, were not truly competitive with other new-model motocrosser releases at the time. Honda's CR125 Elsinore in late '73 shocked Hodaka as well as everyone else, and even Hodaka's Super Combat was just not up to the standard required. So Hodaka’s homogeneity principle became a liability rather than an asset. Customers wanted brand-new models every year.

Faced with rapidly dropping sales of their motocross bikes, PABATCO decided to concentrate back on their trail bikes, which had always been their primary focus anyway. Attention turned to the new-model Wombat, the 03, and the forthcoming 175 and 250. All-new bikes, with many new features such as oil injection (although features such as these had been incorporated in trail bike models from other manufacturers for years) and nary a chrome tank in sight. PABATCO also introduced a smaller, 80cc bike to try and capture some of the exploding youth market.

They were all responses to the market that were valid, but on the whole they were simply too late. That hadn't been entirely the fault of PABATCO though. Hodaka had been slow to respond to requests to move forward with the 175, for example, which didn't appear in showrooms until 1977, when the writing was already on the wall. Hodaka's loyalty, or otherwise, to PABATCO can perhaps best be summed up by their actions in 1975, seeing as we're discussing the 175 model. When PABATCO's sales of Hodaka models began to taper off in the early-/mid-'70s, Hodaka started searching for more customers for their engines and bikes, in secret. Consequently, Hodaka started selling engines to Portugal in 1977 (although, there was only one shipment sold by all accounts) and PABATCO had no idea this was going on. Hodaka sold the 125 oil-injected engine (as used in the 03 Wombat) and the 175 engine which wasn't even available yet to PABATCO. Hodaka even sold the company one complete 125cc 03 Wombat and three complete 175cc SL Hodaka bikes.

Also at play in the early-/mid-'70s was the weakening of the dollar against the yen. In the late '60s and up until 1970 bought ¥360. In 1971 it stayed at a similar rate and $1bought ¥350. In 1972 it dropped to ¥303, then in 1973 it was ¥271. PABATCO was forced to raise all its prices during this period, while other manufacturers such as Honda, Yamaha and so on kept prices lower as the corporations had other arms to their business and could afford the lower margins.

The eventual release of the 175 and the 250 models was anticlimactic for a number of reasons. Hodaka were somewhat out of favor with the dirt riding public by the time both were released, and despite them mounting extensive promotional campaigns the off-road riders of the world just weren't all that interested. Plus, neither model, particularly the 250, were close to what was requested; they were far inferior to what was PABATCO specified. It was the worst example of how PABATCO had absolutely no control over what Hodaka gave them as a finished product.

Some idea of the prevailing mood and difficulties facing PABATCO were also provided by staff member Leon Wilbanks. "In looking back at what happened at Hodaka we need to remind ourselves this was before the computer age, before the fax machine, this was the age of the teletype and the IBM Selectric,” he said. “The parts department was run manually with a tub-dex and a 10-key adding machine, ditto the accounting office. All drawings were done in-house by Maurice Lee, the engineer/translator, and all communications had to go through him. The telephone was used sparingly due to expense. In addition we had a buying agent in Japan named Akio [Alex] Hata. In the beginning he was the interpreter and go-between in all of the various import deals that Miley had set up.

"As I recall he got a six percent commission on all goods we imported from Japan. After things were rolling and we had Maurice Lee I felt the commission was outrageous and should be renegotiated, the powers that be held him in high regard and did not concur. As it turned out I think he was the one who benefited most of all from the whole Hodaka run.

"The layers of protocol dealing with the factory were agonizing and caused a lot of the slowness in responding to market demands. The problems of doing business such as the ten percent tariff that Nixon stupidly put on imported goods, the wild yen to dollar fluctuations, longshoreman strikes, etc. made things difficult, but it was the inability to be flexible enough to respond to the market that eventually did us in."

Some of those thoughts were echoed by PABATCO employee Tim Heihn, and he also shared some insight into why PABATCO did better than expected in spite of their constraints. "I do think we were at the forefront of the dirt bike market for some time,” Heihn said, “but the factory could not tool-up fast enough to make changes without a large financial commitment from us. The closeness of the employees all trying to make the best product was without doubt remarkable. To me, being a PABATCO employee was the most wonderful thing that ever happened to me. I was working in a dream position in a time of fast growth in the industry. I had the passion, a position I loved, and just about died when it came to an end."

Shell's response to most of the downward-sloping sales graphs they'd received from PABATCO in the mid-'70s seemed to be ambivalent. They had far more important things to worry about than a motorcycle distributor in rural Oregon they never really set out to purchase in the first place. Their only real course of action was an attempt to sell the whole PABATCO operation in the first half of 1978. Considering every man and his dog was aware Hodaka was a spent force in the motorcycling world (and considering there was a significant inventory of unsold bikes belonging to PABATCO) it was a rather pointless exercise. Guess what, they didn't get a buyer.

Dirt bike riding certainly grew in leaps and bounds in the early '70s, with all brands seemingly able to sell as many bikes as they could get to market. As well as the Japanese brands there were the Spanish and German brands, loads of Italian brands, still quite a few brands from England, and the beginning of a few brands from Taiwan. You could buy any bike you wanted, for any price. In 1975, though, the market suffered a major downturn, with many brands disappearing. It was the beginning of the end for many Spanish brands, for example. Internal memos from PABATCO also made the point the Japanese had made the same mistake as PABATCO, in that they all moved more motorcycles than they probably should have because of the energy crisis. In turn, they were all overly optimistic in their requested 1975 production, based on 1974 energy crisis sales, an unrealistic figure. The unrealistic optimism, the market downturn and the lack of market-leading models from Hodaka meant 1975 was a shocker for PABATCO. Total sales for Hodaka, for example, were 15,069 in 1974, and just 4,905 in 1975. They lost $3 million and the result was similar but not quite as bad for the following year. The downturn not only saw their sales plummet, but they lost market share as well. In 1974 Hodaka had 0.7 percent of the market and in 1975 that dropped to 0.3 percent. It's interesting to note that even though Hodaka accounted for just 0.7 percent of the motorcycle market in '74, it was reputedly the number six brand in the USA for sales, behind the Japanese big four and Harley-Davidson.

This excerpt is from Hodaka Motorcycles by VMX magazine editor Ken Smith. You can find reviews, videos, and more at the book’s page. Click to learn more!
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