in power

I had a virtual sit-down with Barry Dlugasz; he’s newly heading Honda’s restructured power equipment group. Officially, he is the Director – Division Lead Power Equipment Sales, Service, Marketing at American Honda Motor Company, Inc. He has a long history with Honda powersports. After I analyzed and shared the news release about Honda’s recent restructure, I said I would talk with Barry and get more of the story. Aside from some editing for clarity and some bold for emphasis, here is the interview.

In Power:

What does this restructuring mean for you and for your work in power equipment day to day?

Barry Dlugasz:

Before I go to that specific part of the question, Glenn, I think we need to go back to why we even combined [power equipment and powersports] in the first place. If we go back to probably 2021, power equipment in general was facing some significant regulatory headwinds. One was as California’s timeline of outlawing all small engines. As of today, you can’t even buy a small gas-engine lawnmower in California. They also said by 2028, no more gas engines at all. We’re still not sure if that’s going to happen, but right now that is kind of what’s on the books. At the same time, we had the pandemic, and because of lack of internal-combustion engine products, people are gravitating toward battery-powered products at a significantly high rate. In the lawnmower market, I think it’s 45% battery powered for push mowers to 55% gas powered. So you have economic headwinds. And we have regulatory headwinds. History would show that EPA [Environmental Protection Agency] would follow CARB [California Air Resources Board] in California and follow Europe after a certain timeline. Europe makes some really strict regulations on the lawn and garden side. [In France, for example, noise ordinances limit the time of day people can mow their lawn with a gas-powered mower, with Sundays seeing the most restrictions.]

At the same time, we had a very significant proposed legislation looking like it was going to go through at the time impacting generators. What that meant for Honda was our entire generator lineup, for all intents and purposes, would have been obsolete.

The CPSC [Consumer Product Safety Commission] proposed that generators had to meet a strict carbon monoxide, not carbon dioxide, a carbon monoxide output. We go to great lengths to put safety technology in our generators. So if you leave your generator running in the garage, for example, it’s going to shut off. The CPSC proposed changes for customers who would leave their generators outside but too close, for example, to a basement window. And if the wind is blowing just right, it would blow the carbon monoxide in and bad things could happen. The CPSC looked at that and said, we’re going to regulate this, and we’re going to mandate a certain level of carbon monoxide that would come from a generator. And every single generator would have to be fuel injected. We actually developed two new generators that are now more of a California model. They’re significantly more expensive to produce because of the catalyst and everything that goes into it.

So we looked at all this and we said, oh, you know, we’re going to have a massive shrinkage of market. At the same time, all our lawnmowers and the engines were produced in North Carolina. And so we had to make a decision. We needed more space for ATVs. We needed more space for side by sides. The other side of it is to do gas walk-behind lawnmowers, you have to produce volume and you have to be with mass merchants. The dealers just don’t have the volume to support that kind of business and the price points that you need to be at. It’s a risky business. It was a business decision to discontinue our gas lawnmower lineup. We gave dealers a two-year notice that we were going to build two years of supply, and then we’re getting out. You need to make other plans.

Power equipment was contracting so much. We decided to combine power equipment into powersports and marine into one operation. Powersports wanted to move out of California because we have our factories in North Carolina, South Carolina, and development in Ohio. It just made business sense for that purpose. Plus, Auto and Honda Finance wanted the space we were occupying in California for their expansion. A lot of people think, for multiple reasons, we left California for all the stuff you’ve seen in the news, and that couldn’t be further from the truth. It was about logistics for our production and becoming a leaner operation.

Let’s face it, anybody who studies the power equipment industry knows the competition is getting better. It’s getting faster. We need to be more agile so we can break down all the barriers, be quicker to market. So that’s why we contracted it in the first place.

So here we are today. I came over from powersports because Honda wanted somebody in this position who didn’t have a close tie to power equipment, someone who could look at all of it very objectively. We weren’t doing business on Amazon; we weren’t doing business with a lot of these channels. By being able to grow into these channels, we’re able to show a very viable power equipment future. Then, of course, regulatory changes and political changes; there’s a lot of deregulation right now. And the shift between focusing on battery and focusing on emissions.

The bright side of all of this, where we thought the market was going at one point, we have a lot of confidence that there’s a lot of run life left of gas products, and there’s also a tremendous opportunity with electrification of products.

There was a point with power equipment where, I wouldn’t say “terminate,” but we were monitoring. And we were monitoring without expansion. However, right now, and I think this is probably why you’re here, is we see the market opportunity to carry this thing into 2035, 2040 with a lot of strength in the commercial business.

We’re rededicating to it. As we rebirth Honda power equipment into the future, it’s getting all the resources it needs. So, for your original question, what does that really mean for me? It means instead of a marketing team that covers motorcycle, power equipment and marine, my marketing team just focuses on power equipment. It’s a lot more of a scalpel approach than a butter knife.

In Power:

You use the word “rebirth.” And that sounds like “new products.” Or is it more channel focused or maybe both? This is a chicken-and-egg kind of question.

Dlugasz:

I think they’re both happening in real time. We could give you multiple examples of that. It definitely has a channel focus, looking at what the future dealer network looks like. Then, of course, what are the products of the future and what are the customers’ needs?

In Power:

I visited a store called Acme Tools recently and saw a Honda battery-powered mower on the sales floor. I also talked with several power equipment dealers near me about battery-powered mowers. A few said the new Honda mowers are harder to sell because the battery works only in the mower, not in other Honda equipment. Will we see a battery in Honda’s hedge trimmer soon? Is that a priority?

Dlugasz:

Many of the companies making battery-powered mowers today started off with a drill battery. Then that 2.5-amp hour battery went to a small blower or a weed whacker. And if you have a 2.5-amp hour battery, you really need 4 of them to run a battery lawnmower. So, people buy it and then they’re frustrated because it’s not that the product’s bad. It’s just they have a mismatched battery for the application. It’s kind of like running your gas mower with an 8th of a tank of fuel instead of a full tank.

With a lawnmower, you need an 8-amp hour or a 12-amp hour battery to do it correctly. You will not put one of those in a traditional hedge trimmer or chainsaw, just due to the pure weight. Sure, a backpack blower or snowblower. When we discontinued the gas mowers, there really wasn’t a plan to build a battery product. But based on consumer and dealer requests, “please turn this thing into a battery-powered mower,” that’s what we did first.

Will we expand into other products? Absolutely. Can I tell you what those products are today? No, but in the next 6 months you’ll see an expansion.

The Sales Channel

In Power:

The channel is interesting. You’re in a lot of places already – traditional dealers and some of the mass market stores plus online sales. How is that working? How might the Honda sales channel change?

Dlugasz:

If we look at data points, we know roughly that 70% of battery lawnmower customers buy from a mass merchant. That’s been pretty consistent for 5 or 6 years. What’s growing significantly is online. Amazon has gone from like 10% a couple years ago to almost 20% this year of total battery lawnmower sales. Unfortunately, the traditional dealer network is only about 4% of the battery push mower market. Those dealers are primarily commercial or primarily gas.

Battery customers are comfortable buying stuff online. They’re comfortable walking in a Home Depot and putting a product together themselves. So between Walmart.com, Amazon and mass merchants, you’re controlling 90% of the market right there. Some dealers are selling battery-powered mowers, but it’s, “Yeah, I sold a couple of them, but I don’t carry a lot of those.” Because that customer is not going to their stores. I worked in a dealership. I was a district sales manager in my younger career. I have a heart for traditional dealers. But I also look at the data. And data doesn’t lie.

We have built up our Amazon presence, launching our Amazon store back in April. We put a lot of emphasis into that, but we’re not doing it directly. We could and we’d probably be more profitable by doing so. But because we have such an established dealer network, everybody you see selling Honda on Amazon are our dealers. We provide them an online platform to go after that customer. There’s margin structure and they can be profitable doing it. We chose that route because of our connection with our dealers over all these years. Some of our competitors have cut out the dealer and gone direct.

In Power:

I attended the Greenworks event a couple months ago when the company launched its new deal with Walmart. And they even talk about being in Best Buy stores. Are there things that have surprised you about the channel or things you’re doing that are a bit different that way?

Dlugasz:

I think Greenworks and Best Buy was a surprise for everybody. Seeing Greenworks in Costco, not a surprise at all. If that’s where the customers are going, that’s where you want to be. The data all shows those buying patterns from those customers. You have to buy a motorcycle at a dealer because of franchise laws. But I’ll say straight up, 50% of our battery lawnmower sales are online.

In Power:

Talk about the commercial market, the pro users market. Are you marketing to that group right now? Or do you leave that to your dealers? What’s your look at the pro market?

Dlugasz:

We put a tremendous amount of emphasis into California for a marketing standpoint, because they have no choice. They can’t buy gas mowers. So that’s a huge focus of it. There’s also, I think, about 130 to 140 cities or counties now that, for all intents and purposes, passed noise ordinances. Like Portland, Oregon, just banned all gas leaf blowers. From a commercial standpoint, we’re targeting that. [Note: From January 1, 2026, to December 31, 2027, the ban for use only applies to the time period between January 1st to September 30th. Effective January 1, 2028, no owner may allow the operation of a gasoline leaf blower on the owner’s property at any time of year.]

As our battery lineup expands, we’ll be marketing, not an electric versus gas, but it will be a more that this is an enjoyable, quiet experience versus a noisy gas product running. That’s kind of how we’ll market to that landscaper and to homeowners associations. We know people like quiet. By marketing to that clientele we can begin to change that commercial adoption rate. Obviously, regulation is a big part of what is happening. And then for a lot of landscapers, there is a huge ROI to use a lot of electric products versus gas.

In Power:

How are the zero-turn radius models performing on the retail side?

Dlugasz:

We really just hit the market in April. Most of the adopters of a battery zero turn are municipalities, hospitals, government entities. It’s around 80% and then 20% are landscapers, which are primarily focused in California right now. I wish I could tell you all the high-profile demos we’ve done the lot of tech companies that are interested in the products. I really can’t answer the question of whether it’s a success or not until April of next year. For a lot of users, the buying cycle is October through December.

That market is very small. And we know that going into it. But we see the zero-turn market being a huge presence for us by 2035, because homeowners are doing less and less landscaping themselves, and are hiring more and more professionals. Just think about how many people used to go to the grocery store themselves that are using Instacart now. It’s becoming more of a convenience society, and so we see the demand for commercial landscaping continuing to grow. There’s no indicator that will slow down through the next 15 years. We’re investing heavily in our factory in North Carolina. And battery was one phase. We’ve got a lot of technology down the road that we believe will put us in a very competitive situation in 2030, 2035. So we wanted to start establishing the market now. But understanding that, like I said, 80% of the business is municipalities that are buying the product. At this point, 3 months in, it’s kind of hard to say we’ve we knocked it out of the park. We’ve put a lot of unique features into it that a lot of companies don’t have, like suspension. We’ve taken technology we’ve used in ATVs and cars and all that and made it really unique.

Autonomy and Robots

In Power:

The autonomous technology, where is that right now?

Dlugasz:

We’ve announced that we have it. We haven’t released it yet. That’ll probably be late fall and will be a very limited release. It’s not something you’re going see on the showroom floor when you walk into a dealer. The price tag is probably going to be somewhere between $80 and $90 thousand. It’s not, “Hey let me put it on my Honda card and finance the kind of deal.”

In Power:

Miimo, the robotic mower on the residential side. Where is that as an American product?

Dlugasz:

We had it here and then just the adoption rate was, for the price point, unsuccessful. But it’s pretty successful in Europe. The majority of software is all proprietary to Honda. Unlike our competitors that are buying autonomous technology from one company, and then the end user has to pay a monthly subscription, depending on the manufacturer. We own it so we control it.

One of the biggest challenges in those robotic mowers, though, is that a dealer’s interest is getting the product out their door. But if you don’t have a perfectly well manicured yard without roots and rocks, and it’s good grass, and it doesn’t have a driveway to cross, the robotic mower has limited application here.

When we had Miimo, a lot of the wrong customers were sold the product, which definitely led to a bad experience. It wasn’t the right yard. It was like satellite TV. Sure, everybody wants a satellite on the house. But a lot of houses don’t have a clear line of sight to the sky. While the technology is phenomenal it’s not for every application. There are definitely limitations.

Staffing Changes?

In Power:

Are you staffing up around power equipment specifically? Or out in the sales field?

Dlugasz:

Not in the field as much as we are internally. Field sales will continue to contract. I mean, dealers are continuing to contract. We’re at 50% of the dealer body today where we were 5 years ago. We see the dealer contraction, and a lot of it is retirement. A lot of these people are doing it for a really long time and the kids don’t want to deal with it. Our biggest focus is making sure we build out a robust service network that can serve millions and millions of Honda gas customers as we have this shift in consumer buying preferences.

In Power:

What’s the near future for Honda power equipment?

Dlugasz:

At Equip Expo, you will see a whole new branding effort from Honda. And you will see an additional product. The future’s bright, Glenn, we’ll leave it at that.