Author Topic: The sad reality of scooter sales and distribution in North America  (Read 4857 times)

steve_rolfeca

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After reading the recent thread about Lance and the SYM distributorship, I have to say that I feel bleak about the future for scooter enthusiasts over here, and for SYM in particular.

Things weren't perfect in the bike world 10 or 15 years ago, but at least we had a stable system that worked for most people. Dealers tended to be older, well-established businesses with a good understanding of the powersports market. Even the worst of dealers generally had at least one decent, experienced mechanic on staff. The majority of sales were of machines manufactured by either Harley or the Japanese big three, backed by large, well-oiled distribution and parts networks. There was enough competition to keep everyone fairly honest, but not enough to dilute the market.

Fast forward to the present, and you've got a real sewage pit, especially in the scooter segment. The market has been flooded with cheap Chinese imports of inconceivably inconsistent quality, sold in many cases by fledgling importers with little or no parts support. The market is rife with one-horse "dealerships" with amateurish attitudes, insufficient capital, and inadequate technical support. Junk machines sold at lost leader prices have fostered a destructive price-is-king attitude amongst many consumers. The average scooter purchaser tends to be new to powersports, less affluent, and less technical than a typical motorcyclist.

It seems to me, that the end result is bad for everyone.

At the consumer level, people need to educate themselves both about the products they are buying, and the economics of the sport as a whole. Forums are flooded with clowns who purchase junk chi-scoots for as little as a quarter of the going rate for a quality machine, write rave reviews about their bikes before they've even torn the protective plastic off, and are then surprised when they discover that they aren't up to the rigors of commuting. They buy from former flower shops and grocery stores, but expect Honda-quality dealer support. They have unreasonable performance expectations for their underpowered machines, most of which were built to carry tiny, flyweight Asians through crowded inner-city areas at speeds of under 40 miles per hour. Many of them modify their machines, often in truly idiotic ways, and feel that it's everyone else's fault but theirs when the bike inevitably implodes. They purchase machines from out-of-state dealerships sometimes for the sake of the smallest of extra discounts, without thought for how they will obtain after-sales service. They object to dealers making even the most meagre profit margins, are ruthless about buying grey market parts from shady overseas sellers, and then they complain when local dealers are forced to shutter their doors. They expect top-drawer support from small distributorships who are desperately trying to break into a large, complex powersports market, ignore extremely reasonable offers of help, and then when their inflated expectations aren't met, they make rude, inaccurate, and counterproductive comments on public social media webpages, further sabotaging the efforts of the distributors to move their businesses to the next level. In the process, they shoot themselves in the foot, by ruining the resale value of their own scooters.

At the dealer level, experienced shops welcome the opportunity to get new customers into the service department, knowing that happy service customers spend more $$$ on accessories, and lead to repeat sales when it's time to upgrade. In contrast, the new breed of scooter dealer is a hobbyist businessman, often trying to establish themselves with little or no understanding of the complexities of running a powersports dealership. Meanwhile, they focus on selling machines at cut-throat prices, where the profit margins are narrow and the prospect of repeat business is low. They place a higher priority on marketing than they do on running a quality service organization, which leads to counter-productive behaviour like refusing to service products purchased from other stores. Because they don't have the sort of capital it takes to do things right, they jump in bed with fly-by-night distributors, who leave them carrying the can when the parts supply line evaporates. Is there any wonder that they are dropping like flies?

At the distributor level, it's got to be very hard to justify investing the millions of dollars it takes to emissions and safety certify a new brand and launch a comprehensive dealer network, when cowboys like the Carter Bros and others have turned the market upside down. Upstream, manufacturers want to see their distributors commit to large product quantities that support economies of scale. Meanwhile, constantly changing model lines, especially with the cheaper Chi-scoots, make inventory control and parts distribution a nightmare. On the downstream side, dealers carry large operating costs and punishing finance charges, in a very tough market. In return, they expect some level of loyalty and exclusivity from their distributors. It's extremely difficult to operate a successful dealership in a market where parts are freely available for less than dealer cost via eBay, and especially so if the distributor bypasses their own dealers, and sells direct to the consumer. This type of activity sets customers against dealers and dealers against distributors, further complicating business relationships.

At the manufacturer level, higher-quality Taiwanese (and even the better Chinese) factories have a real challenge ahead if they are to differentiate themselves from the chop shops that have already flooded the market with inferior merchandise, and educate consumers about the need to pay reasonable prices if they want reasonable quality. They also have to separate the wheat from the chaff when it comes to finding quality distributors to carry their products, or invest further millions in establishing their own regional distributorships, often in countries with unfamiliar cultures, business rules, and legal climates. All of this in an unpredictable business climate where North Americans rush to buy economical vehicles willy-nilly every time that gas prices go up a notch, and switch back to monster SUV's every time they inch back down again.

At every level of business in North America, selling a few thousand machines per year to what is essentially a frivolous, hobbyist market must seem like an exercise in futility, compared to the relative ease of selling millions to knowledgeable consumers in mature two-wheel transportation markets in Europe and Asia.

We've got to stop shooting ourselves in the foot, or SYM, with some of the best scooters in the market, is going to simply pack their bags, and return to markets where they already get their fair share of respect.
« Last Edit: April 15, 2011, 11:24:19 AM by steve_rolfeca »

Northpilot

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Re: The sad reality of scooter sales and distribution in North America
« Reply #1 on: April 15, 2011, 12:44:10 PM »
Wow.  What a great commentary on the state of affairs in the Scooter Market.  (Thanks for taking the time to collect all your thoughts in such a conclusive and complete way.)  I am leaning towards the Established-Protected_Dealership model, especially with quality machines like our SYM's.  They are worth the more expensive, but more reliably delivered, parts.  These machines' high quality means that fewer parts are necessary in the first place, but when you need that wheel bearing, or whatever, you REALLY NEED IT.  I can see that the whole experience with the Carter Bros. and their lack of dealer support was counter-productive in the end.

Strictly maintenance parts, such as brake pads, filters, belts, bulbs, oil, etc., are another matter.  For many of us who use scooters as transportation, economical DIY routine maintenance is a must for the whole thing to work.


scosgt

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Re: The sad reality of scooter sales and distribution in North America
« Reply #2 on: April 15, 2011, 01:41:24 PM »
That sounds like something I would have written!

I totally agree about the Chinese JUNK. I had a "quality" China scoot, the Benelli M50, and it was not bad, but you did need to tighten nuts and bolts on a daily basis, and parts were a nightmare. The distributor went down, and I think that may be the end of that brand in the US. I have seen China 50cc scoots that were being sold by local fly by night dealers, and they were incredible pieces of junk. I would never try to ride one, many of the actual load bearing points, like the shocks, were made of pot metal!

The first thing SYM NEEDS to do is get their name out to the public. I don't know about your region, but here in NY Can Am has been all over the TV for weeks. Just about everyone has seen what that thing looks like and they cost a fortune - like $27k for the top model. THAT is how you get brand recognition.

Once SYM becomes a "known" scooter, it becomes possible to attract quality dealers. It was stated before that what they REALLY need is a marriage with a name brand, be it Honda, Yamaha, Suzuki, whatever. Those brands have established dealerships with parts inventory and mechanics and showroom traffic. The business model of dealerships being mom and pop operations that also sell China scoots has not worked out well. A first time buyer for a China scoot is not going to pay SYM prices.

Gas prices look to hit $5 this Spring. This is the time to strike while the iron is hot. I advertise locally to do road tests, and I am getting a number of emails from people asking me what is involved to get a license and ride a scooter. This is when the interest peaks, they need to jump on it now. But what needs to happen is for FACTORY money to buy advertising and finance inventory. The US is the great untapped market for SYM. People buy KYMCO and Vespa and Piaggio, and SYM is just plain better. I think the closest comparison is the Yamaha Majesty, and I don't recall Yamaha carrying a 150cc or 200cc or 250cc scoot. BINGO.

artboyor

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Re: The sad reality of scooter sales and distribution in North America
« Reply #3 on: April 15, 2011, 07:16:39 PM »
I have an SYM HD200, I'm still looking for a local dealership that I can trust to work on my scooter. I've tried two different places, both seemed hesitant to work on my brand. I'm hoping that the 3rd time's the charm thing is true.

ootscoot

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Re: The sad reality of scooter sales and distribution in North America
« Reply #4 on: April 15, 2011, 08:36:02 PM »
According to Carter Bros., I was/am the largest selling SYM dealership in the US. My business is a small family owned, service oriented shop.
I started out selling cheap Chinese junk for my first few months - Lance's Znen line of scoots - Both Lance powersports and my dealership realised that this would not lead to a sound future...and switched to SYM.
My emphasis all along has been service - we service what we sell, and everything else...somehow I got hooked on fixing up and taking care of these things. I have a technician with 30 years experience on board. Our service dept. has become a cool hangout for scooter enthusiasts. We teach our customer how to do it themselves.
I don't know if our commitment to service or our enthusiasm for the product (we all ride SYM bikes) has made us #1.
I have had some issues with Carter Bros. getting me needed parts in a timely matter - good thing these don't need much. Lance has been great - parts arrive next day, they find what I need if they don't have it.
I have met with Eddie Lu and Orange (SYM - Taiwan tech and overseas sales) and find them to be very enthusiastic about the US market.
One last note I have never advertised my business as a "Powersports" or "Motorsports" store - there are lots of those near me - and quite a few going or gone out of business. We are a small scooter shop selling scooters and doing our part to get as many SYM scoots on the road as we can...and keep them there.
Ooty's Scooters - Santa Barbara, CA.
SYM Dealer, SYM rider, SYM owner - got them all!

scosgt

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Re: The sad reality of scooter sales and distribution in North America
« Reply #5 on: April 15, 2011, 09:14:23 PM »
According to Carter Bros., I was/am the largest selling SYM dealership in the US. My business is a small family owned, service oriented shop.
I started out selling cheap Chinese junk for my first few months - Lance's Znen line of scoots - Both Lance powersports and my dealership realised that this would not lead to a sound future...and switched to SYM.
My emphasis all along has been service - we service what we sell, and everything else...somehow I got hooked on fixing up and taking care of these things. I have a technician with 30 years experience on board. Our service dept. has become a cool hangout for scooter enthusiasts. We teach our customer how to do it themselves.
I don't know if our commitment to service or our enthusiasm for the product (we all ride SYM bikes) has made us #1.
I have had some issues with Carter Bros. getting me needed parts in a timely matter - good thing these don't need much. Lance has been great - parts arrive next day, they find what I need if they don't have it.
I have met with Eddie Lu and Orange (SYM - Taiwan tech and overseas sales) and find them to be very enthusiastic about the US market.
One last note I have never advertised my business as a "Powersports" or "Motorsports" store - there are lots of those near me - and quite a few going or gone out of business. We are a small scooter shop selling scooters and doing our part to get as many SYM scoots on the road as we can...and keep them there.

That is excellent, but as you well know, if they don't get lots of scoots on the market they will fail. I do not advocate taking away your dealership, far from it.
But they need an association with a brand with an established customer base to grow. Right now, it is too much of a niche market.
I have had online disagreements with KYMCO and Scarabeo fans. The People S 200 and Beo 200 are direct none to nose competitors with the HD 200, and I have ridden both. They don't begin to compare. Anyone who rides all three with buy the HD every time. But how do you get that message out. By having many dealers in many cities.

Barnone

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Re: The sad reality of scooter sales and distribution in North America
« Reply #6 on: April 16, 2011, 08:47:16 AM »
ootscot,
Wish I had a scooter dealer around here with your attitude. Luckily my HD200 has been problem free and not needed anything except air cleaners.
I see at your web site that you are carrying California Scooter Co. products.
I have a bike somewhat similar in a Dang Fong DF250RTB bobber. So far so good with her.

Rickaroo3d

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Re: The sad reality of scooter sales and distribution in North America
« Reply #7 on: April 16, 2011, 12:04:35 PM »
That photo is a breath of fresh air for a change.
Smokin'!
SYM RV300i & SYM GTS 250



Northpilot

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Re: The sad reality of scooter sales and distribution in North America
« Reply #8 on: April 16, 2011, 05:43:51 PM »
YES!  What a delightful... er....bike!

ootscoot

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Re: The sad reality of scooter sales and distribution in North America
« Reply #9 on: April 16, 2011, 07:58:30 PM »
Nice bike too!
Yes, we carry the Calif. Scooter Co. bikes - really more like a motorcycle - 5 speed, chain drive, wet clutch...Taiwan made 150cc engine really goes! Still gets great gas mileage. The bikes are built here in Southern Calif., and they do an excellent job. Because they are individually hand built, the price is a little higher - $4295, but the quality and style are there.
Ooty's Scooters - Santa Barbara, CA.
SYM Dealer, SYM rider, SYM owner - got them all!

DougReid

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Re: The sad reality of scooter sales and distribution in North America
« Reply #10 on: April 17, 2011, 04:33:30 AM »
Hi Guys,

For what it's worth, I hvw not taken my SYM 300i GTS EVO near the dealership and have done over 15000 kms and have had it for just over a year.

I had a Yamaha BWS which went perfectly until the dealership got hold of it and I ended up breaking down all the time and taking it back didn't help so I was forced to get down and fix it myself.

The SYM has no oil filter to replace just a strainer to clean, I changed the plug to an iridium one, the air filter was bunged up at 3000kms so I replaced it with a foam one, I have changed the back tyre myself, quite easy really, and recently did a new belt (bit more work especially getting those two drive nuts loose). I also cut the exhause in half, cut the top off the CAT and drilled it out. I change engine and gear oil regularly, watch the brake fluid levels and coolant level and drain out the bypass - typically seems to have a bit of fuel and water in it.

I need to go around with spanners and check all the bolts which I plan to do soon. You do nothing with the battery.
I check the lights regularly, and the hooter.

I believe that DIY is essential if you are a real scooter commuter, the thought of taking it in and leaving it there and getting lifts back and forth and the cost just doesn't do it for me.

Regards,

Doug
Johannesburg
South Africa

PS This is my seventh bike and the best without a doubt.


 





steve_rolfeca

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Re: The sad reality of scooter sales and distribution in North America
« Reply #11 on: April 17, 2011, 05:23:03 AM »
One last note I have never advertised my business as a "Powersports" or "Motorsports" store - there are lots of those near me - and quite a few going or gone out of business. We are a small scooter shop selling scooters and doing our part to get as many SYM scoots on the road as we can...and keep them there.

My experience up here in Canada, has been that ootscoot's business model is the best for the consumer.

Big-box dealerships sometimes offer small price advantages, but they never offer the atmosphere or customer service quality of good old fashioned enthusiast shops. Honda is in the middle of a disastrous experiment with single-brand "Honda Powersports" stores up here. All they've managed to do so far, is kill off a few good multi-brand dealerships. That hasn't done any favors for anybody.

However, in the current market, I'm not sure that the "ootscoot model" works all that well for a new brand breaking into our part of the world, where geography works against the newcomer. Separating the real enthusiast shops from the fly-by-night perations takes a lot of local knowledge, and the scope involved is pretty intimidating. Taking the US alone, establishing a reasonable network of 4-6 dealers per State, plus at least two major parts warehouses and a testing/certification facility, would involve negotiating literally hundreds of contracts, plus the associated time to do due diligence on each potential business partner.

You have only to look at the North American ups and downs of big brand names like BMW, Ducati and Aprilia over the years, to realize just what a tough nut that can be to crack.

Meanwhile, you could drop some of the biggest-volume European and Asian scooter sales areas into Lake Ontario without making a splash, and those markets already have a sophisticated consumer base, plus well-established, multi-brand local distributors. Doing business there must be a breeze, in comparison. Frankly, when you remember that SYM is an industrial giant with existing large-volume relationships with other brands (they build cars for Hyundai, for Pete's sake!), I think it's us that needs them, not the other way 'round.

My prayer is that consumers will smarten up, and the whole junk-scoot market will dry up and blow away. I suspect that messes like the Honda powersports franchises are the manufacturers' attempt to regain control of a chaotic situation that must bug them just as much as their dealers. If even half of the cowboys were gone, then it would be much easier for consumers, dealers, and manufacturers alike to have a good experience.

Coming back to SYM's situation in particular, I think the best thing is for everyone to take a deep breath, be a little more patient, and give Lance a chance to move forward. To give everyone a basis for comparison, this is not just a SYM issue. In Canada, Vespa and Aprilia's distributorship network collapsed in 2009. Vespa parts support, already a contentious issue, completely dried up. 2010 started with the old distributor doing a blow-cost blowout of unwarrantied, unsupported machines (surrounded by stories that even the ownership of those machines was still unclear), and ended with exactly NO 2010 models making it to our shores. That's right, zero. Zip. Nada. Vespa is starting over almost from scratch up here, with only a fraction of the number of dealers they had 2 years ago, and Aprilia only had dealerships in 3 provinces as of a couple of weeks ago.

In comparison, the US. SYM situation has actually been handled with a fair amount of care and dignity. Resale values and dealer interest will recover, once the distributorship issue is sorted out, and as frustrating as the Carter Brothers situation has been, there's no point in torpedoing the new guy on the block before they get started.

Lance has already distinguished themselves in comparison to other Chi-scoot distributorships, and their offer to make one-on-one parts support arrangements with folks like MSDS when necessary, is promising. I suspect that they're going to do pretty well at moving up to the next tier as a distributor, provided that market forces give them the opportunity to do so. If nothing else, at a time when big names like Kawasaki and Suzuki were in so much trouble that they had to slash their 2011 model lineups, Lance have at least gotten a leg up on the competition, by snagging the best quality non-Japanese scooter brand on the market...
« Last Edit: April 17, 2011, 06:03:01 AM by steve_rolfeca »

ootscoot

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Re: The sad reality of scooter sales and distribution in North America
« Reply #12 on: April 17, 2011, 08:30:52 AM »
A couple of notes on my business model and it's success: I am located in Santa Barbara, Calif. - 4 seasons of scooting weather and two large colleges filled with students.
 I have worked with the city to arrange ALL city-owned parking facilities offer free 24 hour parking for scooters. And with both the UCSB and City college for free on campus parking.
Just got our large medical facility to offer free parking for scooter commuters.
Originally I was a fly by night, hole in the wall junk scoot dealer! - it just didn't work for me - the bikes kept falling apart, I had a lot of angry customers - no good word of mouth advertising...There were four other Chinese junk bike dealers starting up when I did - all are out of business now - I moved into the SYM and Adly scoots and never looked back.
A surprisingly large amount of my original dissatisfied customers had heard of SYM and were pleased with the fact that I had tried to keep their Chinese things alive, so took a chance on the product...they have never looked back!
 Most of my customer now do research online and hear great things about SYM. SYM's online presence is quite big and positive despite Carter Bros. funky little website.
 It is forums like this that puts out the good word, distributors like Alliance, who has been very thourough with their parts and tech backup (the last year and a half with the Cali Classic has been great!), many dealers who back up the product with customer driven service and enthusiasm, and most importantly the SYM customers who pass the word on about the product quality and help define standards for the dealer/distributor/manufactor to meet.
Ooty's Scooters - Santa Barbara, CA.
SYM Dealer, SYM rider, SYM owner - got them all!

Kiwiscoot

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Re: The sad reality of scooter sales and distribution in North America
« Reply #13 on: April 18, 2011, 04:38:12 AM »
Here in New Zealand, the SYM brand is brought in by Triumph NZ. They are also the distributer of Piaggio, Vespa, Gilera, Aprilia  and Moto Guzzi. Spare parts are no problem to get from the local dealer, but the SYM brand tends to be swamped by all the other brands. It looks like they have the SYM brand to be able to supply a greater range at a cheaper price. This does not do the SYM brand any justice and waters the sales peoples product knowledge and marketing down.
Our market is to small to support Ootscoot's business model as the scooter shop where I bought mine from went bust. Just not the population to support a scooter only shop here. Honest support from a local dealer plus word of mouth marketing thru satisfied customers my seem "old school" in our society, but it will survive and grow what-ever the climate.
To be able to have adverts pasted all over TV cost money, thats why Can-Ams cost so much. I don't think I would be riding s SYM if they did that.
Citycom 300i - 46 000+ kms what a blast.
Citycom review: http://scootdawg.proboards.com/index.cgi?board=200cc&action=display&thread=16772

jim63

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Re: The sad reality of scooter sales and distribution in North America
« Reply #14 on: April 18, 2011, 12:42:32 PM »
SYM scooters are an excellent product IMO for the several years of scooter ownership experience I have had. There are no exclusive SYM dealerships in Seattle are, they are in the Powersports dealers showrooms. There are several scooter only shops in Seattle area one of them used to sell SYM's not sure now, one is a China clone dealer. Advertising the product would help, I heard of them through another scooter site, and was interested enough to put them on my list of possible bikes and go look at them when I was scooter shopping. I dont think I have ever seen a local SYM ad in any publication or media outlet, other than dealers with sale ads. The service part locally from the dealerships is questionable, except for tires I do mostly my own work, have had some items done by non-SYM dealer. I won't dwell on the parts availability, that has discussed in other threads and needs to be corrected ASAP. I dont see how dealers can have good after sale care if they cant get parts to service what they sell, when needs arise. This can become the Achilles heel of SYM in North America, or at least the USA. I am still a happy SYM owner, but my enthusiasm has waned in the last few months.