Dealernews Blog

This story originally appeared in the Dealernews August 2010 issue.
Looking for new incremental revenue? Why not consider selling electric motorcycles next year? New research indicates it may be worthwhile.
“If an established OEM got electric machines into their dealer organization,” Greg Boeder says, “I think you could start to talk about selling quite a few units.” Boeder is a senior partner at Power Products Marketing (PPM), a Minneapolis firm that tracks retail sales in the powersports market. PPM recently completed research on the market potential for electric motorcycles in the U.S. The project included surveying OEMs that are building electrics, and others that are considering doing so, as well as more than 100 owners of electrics.
“Many in the industry today,” Boeder says, “think [electric] is going to have an impact on our business, whereas a year ago I don’t think anyone believed that. There’s a lot more interest, but there’s no product out there that a major OEM is standing behind.”
Boeder’s not the only one who feels this way. The MIC this spring launched its Electric Vehicle Task Force. “We solicited interest among the OEM membership and our boards,” says Paul Vitrano, who heads the group. “We thought it was important to examine the issues that seem to be growing in this segment. We thought the MIC was the place to make that happen.”
Initially, the task force is looking at two broad areas: government regulation and consumer education. The government work includes developing technical specifications. On the consumer side, the task force wants the industry to present a consistent message to buyers about electric motorcycles, to help potential buyers compare machines on an apple-to-apple basis.
The big questions for consumers regarding electric vehicles, Vitrano says, are: How far will it get me? And how fast will it go? “So, we’re looking at developing uniform ways to calculate that information and present it, on a voluntary basis,” he says. “We want voluntary, consistent thinking on the best way to present these performance capabilities.”
Says Vitrano: “The industry has to speak clearly so that consumers understand the product and are not confused.” The task force is developing an FAQ, or standard lexicon, so the public understands the definitions of key terms that are unique to electric vehicles.

Market potential
The market potential for this segment today doesn’t seem to be very large, and there doesn’t seem to a major player in the field yet, according to Boeder’s research. But it’s worth noting that Polaris has made a commitment to electric vehicles with its Breeze neighborhood electric vehicle and its Ranger electric UTVs.
The research shows that the typical buyer of an electric motorcycle is affluent, mostly male and, perhaps most important, an experienced motorcycle owner. “This is not a first-time buyer product,” says Boeder. “The first-time buyers, including the stereotypical green enthusiasts, are looking, but those who are buying have current or previous motorcycle experience.”
They buy, he says, for commuting and short-run general transportation. “They are aware of the range limitations of electrics,” he says, “and if their motorcycle riding needs include touring and longer trips, they will keep their gas machines.”
The market for electric motorcycles, the research suggests, is tiny primarily because no major OEM offers them. “The two leading suppliers, Zero and Brammo, have very limited distribution or ineffective distribution,” Boeder notes. Brammo is distributed through Best Buy. “Outside of Southern California,” he says, “the need to rely on sales reps and online purchasing will limit growth in the near term.”
But Boeder sees potential for an established OEM with a good product. “If the typical OEM has 1,000 dealers,” he says, “it would not be out of line to think that each one could sell three, four or five units. Everywhere you look, there is an affluent motorcycle rider, or former rider, who would consider an electric motorcycle, considering the state of the world.”
Are the Chinese a factor? Probably not, says Boeder, though they have sold electric scooters. “Most scooters sold during the gas-price craze,” he notes, “sold for less than $1,500 and were sold to first-time buyers. Stepping up from a cheap Asian scooter to a $7,000 or $8,000 electric motorcycle seems a stretch to us.”

A note of caution
Dealers probably shouldn’t rush out and buy electrics. There are some considerations beyond limited product availability. Experts note that the sales conversation is different for an electric machine, and the sales staff requires training in the features and benefits of this new segment. Service staff also require new training, and there will be some new parts to be inventoried, such as batteries and controllers.
A former racer now working for a major OEM told me he finds the segment interesting but isn’t ready to embrace it. “You have to get the weight right,” he says, “and the range right and the price right. And the performance just isn’t there. You’re trading out performance and paying a high premium. On the other hand, if you want to improve your carbon footprint. … [The electric segment] certainly is an interesting [market] space, but I don’t see anyone having success until someone gets the range up, the price down and provides acceptable performance.”
Electric bikes may not be worth it this year, but they may be worth keeping on your radar for next year.

This story originally appeared in the Dealernews August 2010 issue.

Are your best employees the ones interacting with your customers? The ones who know your product line the best, the ones who are the most affable, the most personable? If they aren’t, why aren’t you training them to be?

Suzuki’s Rod Lopusnak asks dealers to consider “The Foot Locker Challenge.” When a person walks into any Foot Locker shoe store, that person gets a better sales presentation than if he or she were walking into a motorcycle dealership to buy a new bike. Foot Locker’s sales staff is professional and well dressed, and usually tries to upsell related products, not just the $100 pair of cross-trainers. Foot Locker employees are trained in the company’s sales processes.
Alas, the same can’t be said for many powersports dealerships.

Lopusnak, who is the OEM’s national sales manager, joined Clark Vitulli, Arnie Ackerman, Paul Leinberger and Steve Johnson on a “Success Strategies” panel discussion held last month during Tucker Rocky’s annual sales meeting and dealer show near Dallas. The hour-long discussion covered lots of things, from MAP policies to the best ways of reducing labor costs and cutting back on inventory. But the two themes that seemed to color every other topic were training and education — and that it’s up to the dealer to set the standard employees must follow.

Vitulli, owner of Harley-Davidson of St. Augustine (a Top 100 dealer) and former CEO of America’s PowerSports, said frontline employees — the greeters, parts counter reps, sales staff, etc. — need to be trained well. These people need to be bulletproof, he said, and have to know exactly what they’re doing in their respective departments.

“If there’s anything that you can take away from this [seminar] it’s that you need to have processes in a dealership, and the owner needs to be there to manage them,” Lopusnak said. “That is the absolute, No. 1 thing I’m seeing, regardless of everything — that dealerships don’t have processes. You have to have processes or you’re not going to be successful, and you’re not going to make money.”

When the tone is set from the top down, the effects transcend departmental boundaries. I think back to any of my previous employers. When the management was good, work went smoothly. If management sucked, so went the workday.

I’m a big fan of the research presentations given by Leinberger, a noted researcher and market analyst, at various MIC meetings. He’s been fairly prescient in forecasting how the consumer market will behave. Ackerman, chairman of the MAG Group, brought the strengths of a successful portfolio of brands; Lopusnak his background with Tucker Rocky and Suzuki; and Vitulli the experience of overseeing one of the country’s largest dealer groups. Each person’s comments built upon the others’ and resulted in an interesting, multilayered conversation. Some of the takeaways:
• Make sure you offer something your competitors don’t.
• It’s important to build a relationship with your customers.
• Stocking parts and accessories that have high turn rates makes sense.
• Make the dealership a fun place for customers and employees.
• Offer training and licensing for new riders.
• Monitor your store’s metrics.
• And my favorite, from Vitulli: “Treat every customer as if they’re the last customer you’ll ever see.”

Sound familiar? These are the fundamentals of any good business. These are the topics that Dealernews columnists and others have covered over countless magazine pages for decades.

Whenever I come across discussions like this one, I can’t help but link them to my own experience with retailers, whether they be motorcycle dealerships or my neighborhood market. The takeaways are the very things I require, as a consumer, out of a retailer. If they’re not there, I take my business elsewhere. I’m not picky, but I know I have options. Why not pick the best option for my needs?

This year’s Top 100 competition again offers a Merit Award for Best Customer Service. It’s an important award, recognizing a dealership for the most innovative and successful customer service program it has created and implemented over the last year. Once you get through your basic Top 100 nomination form, you’ll be sent an e-mail inviting you to qualify for one of nearly 18 individual Merit Awards.

Dennis Johnson
Editor in Chief
dennis.johnson@dealernews.com