GRAND JUNCTION, Colo. - During the U.S. launch of KYMCO USA's 2014 MyRoad 700i scooter and UXV 700i SxS, Dealernews discussed the evolution of the brand with Bruce Ramsey and Rick Pawelka, and what dealers should consider when taking on a new, or secondary vehicle franchise -- to drive additional store traffic, to strengthen margins and/or to provide a lower-priced offering to a still-economically wary consumer populace.
First, it's important to understand who's in the head office. KYMCO's senior team includes CEO/President Ming Hsin Lee; VP-sales and operations Ramsay; VP-technical services Joe Wofford; marketing director Pawelka; and Director of New Dealer Development Ya Shih Yang. Ramsay, Wofford and Pawelka are enthusiasts; Lee and Yang are experienced scooter riders (since they are both from Taiwan) but are not recreational riders, Ramsay said. "We have 34 team members, of which 23 are enthusiasts in one or more categories of powersports," he noted.
Contributing editor Dennis Johnson asked Ramsay and Pawelka about margins, marketing programs, territory setup and other factors.
Dealernews: What are the customer groups a retailer would target for these vehicles?
Pawelka: Those looking for a more economical purchase of a mainstream-quality vehicle that's backed by a good dealer network, and service and sales support.
How do you determine market demand for your product in the U.S.?
Pawelka: We actually have an ongoing customer survey at all the events we do. This year we'll do more than 50 events with three trucks and trailers that will crisscross the country. We started in January and will end in December. We've added a series of outdoor shows, field and stream, deer and turkey shows, and international sportsman expos which we just put on our schedule to push the off-road product.
[For off-road] They're not sport clientele, they're actually landowners, hunters, campers and outdoorsmen. They use the product -- the utility-class machines we're producing. The scooter demand depends greatly on the market and region. For the 49cc machines it depends on state licensing laws. The mid-displacement scooters sell in the bigger metro markets.
How many dealers do you have in the U.S.?
Ramsey: We have about 585 active dealers. These are dealers who actively participate in a program every year, buying inventory every year. There are dealers out there who have KYMCO inventory on-hand, but are no longer buying anything. The goal for 2013 is to assign about 150 new dealers.
How do the KYMCO USA's dealer territories work?
Ramsey: At one time we had 16 DSMs but are now sitting at nine DSMs. We're looking to add one more, for a total of 10 DSMs in 2013. Each DSM has a pretty expansive territory, especially out in the western states. We have an inside sales rep who handles our smaller markets like Hawaii, Alaska and Puerto Rico.
What are the MSRPs and dealer margins?
Pawelka: The Agility 50 [scooter] is our price leader [and] will be $1,599 in 2014. The MyRoad 700i will be $9,699. Off-road, the smallest displacement ATV is the 70, and that's in the $1,400 to $1,500 range. The UXV 700i SP will be the most expensive side-by-side at $11,599.
Ramsey: On-road we've traditionally been able to hold about 30 percent margin on the small to medium displacements. It dips down to about 20 percent on the big bikes. Off-road we hold about 30 percent margin on just about everything.
Who supplies floorplan financing? Retail financing?
Ramsey: GE Capital handles wholesale financing. We also use Northpoint Commercial Financial as an alternative for wholesale financing. Sheffield Financial handles retail financing. Current retail programs include 1.9 percent at 36 months; 7.9 percent at 48 months; and 6.9 percent at 60 months. (continued)