Dealer Roundtable: Scooters

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Scooter riders in the United States will likely never reach the massive proportions of their European brethren. Scoots buzz through the streets of most Euro burgs like hordes of termites, but here their use is mostly found in large metro areas and college towns.

How do the dealers in these scooter hot spots court their customers? Do they use small models as a way to entice entry-level customers and possibly sell them a higher-displacement unit in the future? And how much of a dent in the market are the new "off-brands" (mostly from China) making? To find out, Dealernews asked some scooter dealers.

Participating in our roundtable were:

  • John Beldock, owner of Erico Motorsports, Denver, a successful Top 100 dealer serving metro and collegiate customers. Erico has Hyosung, Piaggio and Vespa scooters.
  • Robert Hintz, general manager of Englehart Center, a Madison, Wis., Honda, Schwinn and Yamaha dealer courting the state capital and home of the University of Wisconsin's largest campus.
  • Greg Sceili, general manager at Plaza Cycle, Salt Lake City, a Yamaha dealer serving a large metro area surrounded by a number of colleges and universities.
  • Michael Tockey, owner of Speed City Cycle, Indianapolis, a former Top 100 dealer serving Indiana's capital city, a number of colleges and universities, and even customers "300 miles away," he says. Tockey's shop sells Bajaj, Daelim, E-Ton, Genuine Scooter,KYMCO, Piaggio, Twist 'n' Go and Vespa.
  • Steve Travers, general manager at New York City Motorsports in downtown Manhattan, which carries Honda, Suzuki and Yamaha scooters.

Dealernews: What parts and accessories do you carry for your major scooter lines?

Beldock: All OEM parts and accessories as well as Corazzo jackets, Leo Vince, Malossi and various other aftermarket accessories. We are a Paul Frank dealer and stock scooter-ish lifestyle wear. We also produce our own clothing line.

Tockey: We carry luggage boxes, windshields, covers, locks and high-performance tires and engine parts. We special order for those that we don't sell.

Hintz: Helmets, jackets, cable locks, baskets and oil.

How do you market scooters in your area?

Sceili: Through local media, movie theaters, college and university ads and school publications. We also have a dedicated showroom floor display, and a variety of community relations events, including fund-raisers, auctions and school calendars.

Beldock: We sponsor a large club. We also market heavily to the gay and lesbian community [see cover story, September 2006]. We also are very visible at various community events.

Tockey: We market our scooters through the local Auto Trader and other local print media, as well as hosting local scooter nights.

Hintz: Through the local student housing directory, Yellow Pages, campus game-day tailgate promotions via radio, and through college bookstore promotions. We also advertise in campus bars and offer a unit giveaway promotion with beer distributors.

Travers: We do advertising and word of mouth — but even better, we're the only dealer in Manhattan.

So do you focus on scooters as a distinct market or use them to groom customers for larger-displacement bikes?

Beldock: We treat the two markets separately.

Tockey: Scooters are the focus of our local business, but our award-winning custom bikes have more of an international client base. There is no crossover.

Travers: A little of both. Some of our customers are only scooter riders, while others start off on scooters and work their way up to motorcycles.

What's your sales volume for scooters?

Beldock: About 450 units annually.

Hintz: For 50cc units, about 175 units. Scooters over 50cc, about 45.

Sceili: About 200 per year.

Tockey: We are in the top tier for two of our brands and somewhere in the middle for the remaining brands.

Travers: The average, until last year, was about 300 scooters a year.

What changes have you seen in the scooter market over the last three to five years?

Beldock: The growth in the commuting and "fun" sectors.

Hintz: More adults buying scooters for transportation to work.

Travers: Bigger scooters from Suzuki and Yamaha with more professional-type customers buying them. They are popular bikes for those who want that scooter comfort and performance of a big bike.

Tockey: Over the last five years, we have seen a dramatic decrease in the quality of customer who is considering purchasing a scooter. It is very common for a customer to believe that they can buy a scooter for $400 to $1,000. I think this is due to the prevalence of Pep Boys advertising and ads for "disposable scooters." On a daily basis, 80 percent to 95 percent of our walk-in traffic believes that they can buy a unit for less than $1,000 out the door.

Sceili: The change from two-cycle to four-cycle engines in small scooters — less power, lower emissions. Probably the biggest change has been the large number of Brand X scooters being imported from China and other countries.

What impact have Chinese and Taiwanese scooters had?

Sceili: These Brand X scooters are bad products in every way. We continue to sell just about all the Yamaha scooters we can get.

Tockey: The influx of Chinese scooters has ruined the market. When we inform people about the poor quality and lack of parts, dealer support and short warranty period, many people make us out to be the bad guy. They simply don't want to hear that a $799 unit is strictly a disposable unit.

Chinese is crap — for now. On average we spend one to two hours per day telling people we are sorry that we cannot service their [Chinese-made] scooter because we don't have the parts, and the parts that we do find are of no better quality than the ones that broke with 20 miles on them.

Beldock: They have probably helped by putting more units in the public eye. We see a lot of people get into scootering by purchasing a Chinese model, only to discover that no one will service it and it must be replaced with more viable equipment.

Do you carry any off-brand scooters?

Beldock: Our location in Lakewood, Colo., sells Hyosung.

Tockey: Our only off-brand scooter is TN'G, and we purchased them based on parent company CMSI.

Travers: We did carry some about 10 years ago, but parts were ridiculous to get, so we discontinued.

How did you decide what off-brand to carry?

Tockey: We have always received great customer service [from TN'G], and access to parts has been very good. The overall quality of the unit is marginal, and the fit and finish is poor, but they are cheap scooters for our low-end customers. Even so, they have an MSRP of $1,399 — and we're lucky to get $1,099 to make one move.

Beldock: Other than KYMCO, Hyosung is probably the only other off-brand of quality.

Hintz: Pacific Cycle [Schwinn] is located in Madison. We worked closely with them on the development of the new release. They are a stand-up company looking to support their dealers like a major OEM, and are great to work with.

What steps have you taken to deal with these brands?

Tockey: We are experimenting with a purchase agreement that spells out exactly what a low-end buyer is getting. We have had other disposable scooters in the past, but encountered problems with every unit. Virtually every customer who bought one asked for a refund — and several threatened our staff with physical violence. It was simply not worth the risk to our employees or our reputation to sell the garbage brands.

We are very happy with the high-quality brands we sell.

What are the biggest issues when carrying an off-brand?

Beldock: The toughest part is name recognition, but the benefits come in the price point.

Hintz: The challenges are the quality control and R&D with a new product. The benefits are the great margins, and the scooters are an easy sell to a student on a budget.

Sceili: The overall quality of Brand X scooters is terrible. The quality of material, welding and workmanship is terrible. There is no after-sale support for the dealer or the customer. The warranty support is nonexistent. Parts, warranty or not, are not available.

For dealers who truly care about their customers, these Brand X scooters are total and perpetual brain damage. We sell thousands of quality units every year, and we have enough problems without selling junk products.