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Steve the Ace - Part 5

 

This month Steve takes a look at the state of the nation. Sales, industry updates, even pricing policy. Over to you Steve....

Steve @ Ace

 

The mid-year point gives an excellent opportunity to see how the year is panning out, what is proving popular, and what isn’t.  Interestingly the overall Australian sales figures look less than encouraging for scooters.  A 13.5% drop compared to the first six months of 2011 doesn’t look great.  However a more detailed analysis shows some interesting things.  In terms of top sellers, Honda and Piaggio dominate the top 10 with no less than 7 scooters between them, with the list rounded off with three of the budget models from SYM, Daelim and WA importer MCI.  No surprises there perhaps – the top 10 has always been dominated by well-priced and/or cheap offerings.  But a quick look at the overall brands and there are some clear headlines from the bigger selling brands.  Honda, Aprilia and Piaggio sales are up, revealing their strategy of providing good quality, well-styled, but competively-priced models works well.  Vespa holding.   Significant drops in Kymco and SYM sales, and previous big sellers Yamaha and Vmoto continuing their downward path.  An apparent big increase for Daelim is almost entirely due to the rebadged Sachs Amici (now Daelim Besbi) accounting for almost two thirds of their overall sales, and similarly two thirds of MCI sales claimed by the Riviera, a model retailing for under $1500.

On a personal basis however, it’s far from doom and gloom.  Our own sales figures for the first half of the year have been our best to date, even outdoing those of the boom year of 2008. Our biggest prediction for the year was about how popular the new Typhoon 50 was going to be, and it hasn’t disappointed, already our top selling scooter of the year so far, despite long periods at the start of the year when we very quickly ran out of our initial stock!  Its instant popularity didn’t just surprise us, it also initially caught Piaggio Australia on the hop at the start of the year, but we are now enjoying good stock levels so we can continue to satisfy the growing demand.  It’s highly unusual for a new scooter to hit the ground running, but the combined pedigree of the “Vespa” 50cc engine in a sporty package makes it a very attractive proposition.  The current Aussie top-seller, the Fly 150, took a couple of years to start hitting its boot-straps, but it’s now the “standard” for people who are looking for a good quality machine at a no-nonsense price.  The Typhoon 50 already looks to be on track to do the same.

My biggest satisfaction has been the return of the legend.  The PX must now be regarded as the quintessential scooter.  The first year of production was 1977, and whilst in the modern automatic age it doesn’t turn over the numbers that it did, sales are steady to the growing number of cognoscenti who want something a bit different, a bit interesting, and something that you can make very much your own.  We’ve recently become a dealer for German scooter powerhouse, SIP, who are not only on-sellers for a huge variety of scooter parts, accessories, and performance gear for 50cc, geared and bigger auto scooters, they produce a number of their own products (and very nice they are too!).  My PX now boasts an SIP front shock as well as new SIP tubeless rims (all made in Germany) improving the handling markedly, and the Malossi pipe has opened up the engine, and gives it the distinctive ring-a-ding ding which is noisy, but just so compelling.  A new air filter and high flow fuel tap, with yet another upsizing of the main jet, are next week’s projects.   And all of these parts cost about $500 including freight.  Bargain.  The various upgrades we are doing for our PX customers is helping keep the workshop busy, and giving us all a lot of fun and satisfaction too.  If you haven’t ridden a PX yet, I’d encourage you to give it a go.  You might begin to understand why all those geared scooter clubs are such purists!

As I reported last month, the committee of the Motorcycle Division of the MTAA (Motor Traders Association Australia) got together this time in Adelaide for its 6-monthly meeting.  Apart from the issues affecting the industry that we try to tackle, it’s also an opportunity to see what is happening with the other regions and brands.  As far as scootering is concerned, at the last meeting I had raised the issue as to whether the MTAA should lobby to get the ADR for mopeds changed, such that the maximum speed be raised from 50kmh, to a more reasonable 70kmh.  Most of us who ride know that keeping up with traffic is far safer than having car drivers constantly riding up ones backside!  Of course the solution most current users employ is to remove the restrictors or modify the vehicle, which although helping resolve their safety concern, it leaves any party thereafter involved (whether the rider or the person who has done the modifications) exposed legally.  However the discussion at this meeting led to the general consensus that raising the issue with the appropriate authorities was probably just opening a can of worms, and could ultimately result in more stringent regulations over licensing and use than we currently have.  So outvoted, but at least tried.

One big item of industry interest was the decision by some of the big Japanese bike suppliers about how their dealers could utilise some of the new portal sites (such as DiscountNewBikes.com.au), effectively banning them from showing prices for new bikes on these sites.  This is an interesting development, as it shows that finally the suppliers are recognising, and trying to deal with the sometimes crazy pricing some dealers use to win market share, at the expense of the overall industry. I realise that many Australian retailers get little sympathy on pricing due to the habits of the greedy few who mark-up astronomically, but the bike industry, unlike the car one, isn’t full of dealers who can afford to run around in Porsches. 

Every vehicle purchase counts, and losing margin to undercut or price-match a dealer who either has no business sense, or has another profit stream, simply means that there is less money available to keep those businesses profitable.   And when that happens, they go out of business.  Up till recently, this hasn’t necessarily been an issue.  Plenty of new dealers popping up all the time, but no longer.  And finally some of those suppliers have realised that if when you lose a dealership, you lose sales – because the dealer network is effectively their sales network, and once broken its damned hard to repair.  So trying to take back ownership of the RRP may be the first step in the process of revitalizing their networks, getting them focused on customer satisfaction and business profitability, rather than purely on number of sales a dealer makes.  Rogue dealers who are only focused on themselves are not good for their competitors, but suppliers need to realise that they aren’t good for them as suppliers either – however giving up those short-term sales is not easy.  However you just need to look at the continuing growth of Harley Davidson sales, to realise that hugely controlled brand understands what it’s doing, and knows how to keep its dealers!

A final interesting story which has possible major ramifications for the industry came from Subaru.  The initial offering of the BRZ model purely on-line has clearly taken sales away from their dealer network, but I suspect that the dealers will pick up the delivery, warranty and after-sales.    I wonder how happy Subaru dealers are to lose out on those sales?  And I wonder what would happen if an Australian bike or scooter supplier decided to take a similar approach with one of its models?   Whatever the outcome, the retail model is again adapting to technology, and those in business have to move with the times, but to me it is clear that suppliers and dealers will have to become even more closely integrated to survive in the information age, and that failure to properly consider the big picture could have interesting consequences in the medium to long term.

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