Archive for the ‘Delmont’ Category

Major Management Changes at CFMOTO

October 8, 2010

CFMOTO, the Chinese powersports company, has made several top level management changes to its U.S. subsidiary based in suburban Minneapolis, according to sources close to the company. The changes include beefing up the management team with outside professionals and a shift in responsibility for Lev Mirman, the former president of the U.S. operation, CFMOTO Powersports.

Mirman retains his equity position with about a 10% ownership of the U.S. operation. Under the new setup, Mirman will focus on legal and regulatory concerns involving CARB, DOT and EPA.

The company declined to discuss the changes in any detail when I contacted the CFMOTO office today.

The new management team is designed to increase efficiencies, and help the company expand its product portfolio into new areas beyond its ATV, scooter and motorcycle products, sources told me. CFMOTO has about 200 U.S. dealers, down from a high of about 215, but it has been adding dealers this year, the company said.

CFMOTO is one of the few Chinese manufacturers that has established its own subsidiary in the U.S., similar to the Japanese models in which the manufacture manages its own brand through its own manufacturing and distribution channel.  Most other Chinese and Taiwanese companies simply hire independent importer/distributor companies to handle their products in this market.

CFMOTO’s parent company,  ChunFeng Holding Group, Ltd., was established in 1989. The group has eight wholly-owned subsidiaries engaged in manufacturing of liquid cooled engines, scooters, motorcycles, vehicle parts and accessories, and investments. The largest engine it manufactures is a 500cc unit, and the smallest is 50cc. JD

Contact me with news tips and story ideas at
jdelmont@dealernews.com or 952/893-6876.

Retailing Questions Continue for Powersports

October 4, 2010

Wells Fargo Consumer Conference

There wasn’t much to excite investors at the recent two-day consumer conference held by Wells Fargo Securities, according to a report issued by the company last week. The conference was held Sept. 29-30 in New York, but there were not many powersports companies among the 64 firm that gave presentations to the analysts. Perhaps the best known powersports participants were Arctic Cat and Brunswick. Other related companies included International Speedway Corp., Penske Automotive, Tractor Supply, Marine Products, and U.S. Auto Parts Network.

Several trends ran through the presentations, according to reports compiled by attending analysts. These include: A continuing major shift to online marketing in a number of forms; personalized marketing is growing, using the Internet and social media to drive sales at online and bricks and mortar sites; increased sourcing costs which could put pressure on margins even though many companies are operating in a more efficient manner, and holiday inventories seem to be in good shape.

“Powersports retail sales visibility likely will be clouded until the beginning of seasonal sales in March,”  Senior analyst Tim Conder wrote in his conference summary report. Near-term price movements of powersports stocks most likely will be tied to general economic activities, he wrote. In his conclusion about the leisure segment, Conder says he likes certain toy companies, followed by cruise lines and powersports companies. Not a real strong recommendation.

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Converting Buyers To Repeat Customers

September 27, 2010

Customers For Life: How To Turn that One-Time Buyer
Into a Lifetime Customer

How much would you pay to acquire a lifetime customer? One who would come  back to your dealership time after time to buy things, year after year? How about $15 and a few hours of your time? I thought so.

All you have to do is read a small paperback book, or, better yet, pick up a bunch of copies for your key employees. The book is the bestselling classic, “Customers For Life“, by Carl Sewell and Paul B.Brown. It also includes  a brief but informative section by management consultant Tom Peters. The book is published by Doubleday, initially in 1990 and reprinted in 2002. But it’s still valuable today, two decades later. It might be the best investment of a hundred bucks or so in staff training that you ever made. I don’t work for Amazon, but here’s where you can read other reviews and order the book on-line, if you wish.

The easy-to-read paperback contains 41 chapters in 210 pages. But you don’t have to read the entire book, front to back. Pick out chapters that are important to you, and start there. “Customers” is written by Carl Sewell, a Dallas car dealer, who is one of the most successful sellers of luxury cars in the country. His associate, Paul Brown, is a former writer and editor at Business Week, Forbes, Financial World, and Inc., and a specialist in customer service. These guys know what they are talking about and they know how to say it in plain, simple language that’s easy to grasp.

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Customer Service: A Tale of Two Companies

September 17, 2010

Amazon.com, A Winner. Target Stores, A Loser.

This is a story about customer service and how the same problem was handled by two different retailers, one a leading bricks and mortar operation and the other, an on-line business.

I’m talking about Amazon.com, Inc., the on-line business headquartered in Seattle,  and Target Corporation, based in Minneapolis.

Here’s my tale of how the two major retailers, using totally different business models, provided service to a customer, me, when I had a problem with a defective product. Amazon, the on-line retailer, did it correctly, beyond my greatest expectations, and will continue to receive lots of my business. Target, the hugely successful bricks and mortar retailer and one of my favorite local places to shop, completely dropped the ball, to the point of rudeness and stupidity, and has lost a big chunk of my business forever.

On June 24, 2010, I purchased a Kindle digital reader from my local Target store in West St. Paul, Minnesota.  I paid $189 and change for it and was happy to get it. I added a nifty leather carrying case to protect it and was off and running. The service I received from Target electronics people was helpful, and everything was good. I spent money with my local retailer, and I got the product I wanted at the price I wanted, all without the problems sometimes encountered with on-line purchases of sophisticated electronic products. Life was good.

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Fred Fox: Aftermarket Upturn Has Started

August 22, 2010

MADISON, Wis — The U.S. powersports aftermarket is past the bottom of the current recession, but it’s likely that there could be continued consolidation and contraction of dealers and aftermarket suppliers, says Fred Fox, chairman of LeMans Corp. The company owns Parts Unlimited and Drag Specialties, two of the country’s leading powersports distributors, and services more than 9,000 North American dealers. It also operates a European distribution operation based in Trier, Germany.

Fred Fox

Fox made his comments here Saturday, at the company’s annual National Vendor Presentation (NVP). More than 150 suppliers and an estimated 400 dealers are expected to participate in the five-day event, up from last year.

Fox touched on a number of topics in his state-of-the-industry address and in private comments with me during the show, including:

  • LOW POINT ECONOMICALLY. “I think we’re past the low part of the (recession) curve, as far as the aftermarket is concerned. Most of our sales reps are reporting positive attitudes and encouraging comments in their dealer stores,” he said. When people don’t buy new, they tend to fix up the old, he added.
  • SALES ACTIVITY. Fox said that sales at LeMans were “good” in July and sales “look good” for August, too. He didn’t provide numbers, however, and declined to provide sales figures for the year, which ends in September. He told the audience that dealers in the Sturgis, SD, area and vendors that displayed at the recent rally reported strong attendance and excellent sales.
  • EUROPEAN BUSINESS. The company distributes about 100 brands in Europe and expects to increase this to about 150 brands by next spring. Parts opened its $38 million warehouse in Trier last August. The four-tier facility  covers 177,600 square feet and has inventory worth about $10 million.
  • SUPPLIER CONSOLIDATIONS. A number of suppliers are re-evaluating their future now that the important summer season is winding down and they are facing the slow fall season. Weak cash flow and tightened bank credit are causing some problems, he said. “A few are going to be quitting,” Fox told an audience of suppliers and media representatives.  But he told the audience that he is prepared to assist selected companies when possible. For more than 40 years, Fox has developed a history of fostering mergers among suppliers and of providing individual companies with flexible purchasing programs during slow periods. “If anybody here says,  “The bank is about to call my note one of these days,’ and you need help with that, don’t be afraid to call,” he told the vendor audience.
  • DISTRIBUTORS. Fox said that some competing distributors are using price-cutting business models aimed at cash-strapped dealers. “The thing that scares us,” he said, “is that these distributors, who are selling only on price, aren’t helping the dealers and they aren’t helping you,” he told the suppliers. “More pins in the map doesn’t mean more sales for your product,” he told them, suggesting that loyalty and quality service is more important than adding additional outlets.
  • DISTRIBUTOR CONSIGNMENT PROGRAMS. Fox vehemently denied rumors that Parts/Drag is testing consignment programs in selected dealerships.  “No, absolutely not,” he said, regarding consignment programs at LeMans. “It’s not in our playbook. Consignment is for product that is selling poorly or for stuff you can’t sell. It’s a mistake. We don’t have one nickel’s worth (of product) out there (on consignment). It will not happen in this company.“ Fox said there’s a simple reason for the no-consignment policy at LeMans: “We want the guy to have first class product and have an investment in his business. If you offer consignment, you’re betting on defeat. If a guy has one helmet over here that he’s paid for, and one over there that’s on consignment, guess which one he wants to sell.”  Also, he said, the tactic tends to prop up weak dealers and keeps them going against the good dealers in the area. “If you fill up your store with obsolete product that doesn’t move and then give it back and get some more obsolete stuff that doesn’t move, that’s a bad idea.”

The show ends today. “Attendance has been up from last year,” said Fox, “and the mood among dealers and suppliers I’ve talked with has been excellent.”  JD

Contact me with story ideas and news tips at
jdelmont@dealernews.com or 952/893-6876.

Checking in with Tucker Rocky’s Steve Johnson

August 15, 2010

I didn’t have a chance to participate in Tucker Rocky’s national sales meeting in Texas last month, so I tracked down TR”s chief Steve Johnson to get his reaction to the five-day event and to see what he had going at the big Fort Worth-based national distributor.

Steve Johnson

The show was different this year, by design. More aimed at training and business improvement than entertainment and relationship-building. “This show was a lot more about product and selling product,” said Johnson. “It was less about fun and more about dealer training and how to run a good dealership.”

In Johnson’s view, the participating vendors and dealers “were more than positive, they were engaged” in what was going on. “A lot of people are still excited to be in this industry. But there’s a realization that there’s a new norm; it may come back a bit, but it’s going to be at a slower pace. You can’t expect 10%-15% compound growth. You have to hunker down and run your business as best you can. People were fully engaged; more so than ever before.”

Dennis Johnson, editor-in-chief of Dealernews magazine visited the show and did a nice job of reporting on the event in the August issue of the magazine. I’m not going to duplicate his efforts here, but Steve covered some interesting points in our conversation, many focusing on dealer training and customer service.

Big Push On Customer Service

As we chatted, Steve told me a story about customer service that came from his previous experience in the foodservice business. To paraphrase his story: There once was a large bakery that produced custom products for a high-end local grocery store. The big thing was fresh birthday cakes, made the same day and featuring custom greetings. It was an important item for the retailer and produced nice margins for both the bakery and the retailer. The cakes were always delivered on time, the names were spelled correctly, and everyone was happy. But one day, there was a mistake; a cake didn’t get produced for a birthday party that day. The customer went crazy, of course; what was she going to do for the party that afternoon?

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I Have Returned from Vacation

August 9, 2010

Joe Delmont

It’s always great to be on vacation, but it’s nice to be back, too. I’ve recently spent the better part of two weeks vacationing on a lake in northern Wisconsin with my wife, Bobbie, the three kids, Steve, Bryan, and Kate, and four grandkids. I golfed, read three novels, played with the grandkids, and spent too much time with a big, ol’ black Lab mutt named Jimmy, who visited every day. Jimmy is the only dog I every knew who retrieved rocks. That’s rocks, as in stones, big stones, that he would dig out of the bottom of the lake and then drop at your feet with a big, wet grin. Obviously, Jimmy doesn’t know the difference between a rock and a tennis ball.

Summer’s a busy time anyway, even without a vacation in the north woods. My wife and I have picked up two days of babysitting for the grandkids on Tuesday and Wednesday to save them some day care dollars. Four little bundles of energy, ranging from seven months to six years, each wanting lots of attention involving library visits (good), swimming lessons at the neighbor’s pool (not so good), and trips to the local kiddy park with juice and snacks (bad).

OK, I know I’ve said I want to spend time with the new generation, but it’s difficult to keep up. Bobbie and I don’t remember how we raised three kids of our own. Must have been some grandparents heavily involved in that schedule.

Story Backlog
At any rate, I’m back at the keyboard, and I’m looking at a stack of story notes. Tucker Rocky. Baja Motorsports. ITC’s investigation of intellectual property rights. CFMOTO’s suit against EPA. And a couple of other industry stories based upon research from Power Products Marketing, the Minneapolis research firm, plus my column for September Dealernews and the Dealer Lab report on Bill Shenk’s June performance—another profitable month.  I’m also heading to the Parts Unlimited show in Janesville and visiting the new Baja headquarters at the complex of its parent company TTI in Anderson, SC, at the end of the month.

And suddenly it’s September. Where has the year gone? JD

Contact me with story ideas and news tips at
jdelmont@dealernews.com or 612/845-8091.

Surging Mower Sales: Good News for Powersports?

June 14, 2010

Joe Delmont

Now, that’s a good question.

If a homeowner is willing to pop for a $10,000 deluxe lawn mower, does that mean he’s likely to spend a similar amount for a motorcycle or a SxS vehicle this year? Or does it mean that the purchase of one fancy motor machine is enough for now? I don’t have the answer, but I just the fact that consumers are spending 10,000 bucks for a machine with more power and features than they need— really an unnecessary purchase— seems to bode well for our industry. It could be another positive sign of sales improvement over the next few months.

The Wall Street Journal today reports that after double digit decreases for the past two years, U.S. shipments of riding mowers are expected to climb more than six percent over the next two years. At John Deere, for example, sales are “far exceeding” forecasts, according to the story.

We’re not talking basic grass cutters here; the machines that sell have iPod compartments, chrome hub caps, comfortable seats, plenty of power and agility and sell for more than $10,000. “It goes well beyond cupholders,” notes a representative of the popular Cub Cadet brand.

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Italian Motorcycle/ATV Show Opens in China

June 10, 2010

Friday is Kick-Off Day in Beijing, China, for an innovative new international motorcycle and ATV show and conference driven by—hold on here— the Italian motorcycle industry. “EICMA China—The Motorcycle Show,” runs Friday through Sunday, June 13,2010. It’s the first ever show for EICMA outside of Italy. EICMA is best known for putting on the the world’s largest motorcycle show every November in Milano, Italy, when several hundred thousand consumers and trade representatives walk the floors looking at the latest machines and accessories.

The trade fair and conference being held at the National Agricultural Exhibition Centre of Beijing is an alliance of EICMA and two major Chinese partners: the Chinese Chamber of Commerce for Motorcycle (CCCM) and Genertec Advertising& Exhibition Co.Ltd. The goals of the event are to show foreign products to the Chinese market and to bring together representatives of several countries to discuss powersports issues relating to motorcycles and ATVs.

On the motorcycle side, the 6.5 hour China International Motorcycle Industry Summit will focus on emissions and on building the Chinese market for motorcycles. A motorcycle ban was instituted in Beijing in 1985 and expanded has been expanded to more than 170 cities in China. It’s estimated that the ban reduced sales by 4 million units annually.

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BRP’s New SxS Aims at Polaris’ RZR

June 7, 2010

Can-Am Commanders Feature Power, Performance, Utility

The Can-Am Commander 1000 X tops 72 mph with its 85 hp Rotax EFI V-twin.

BRP’s Can-Am Commander, the high powered 1000cc side-by-side vehicle that has had the market buzzing for weeks, finally was rolled out at the BRP dealer meeting in Reno last night.

There will be five models: the Commander 800R and 800XT and the Commander 1000, 100XT and 1000X. The X model gets the high performance package and special graphics.

So, what’s to add after all the Internet talk and spy photos? Some facts, a bit of perspective and a forecast, perhaps. I recently spoke at length with Yves Leduc, vice president and general manager for BRP’s North America Division, and others at the company and throughout the industry about the machine and its impact on this very important industry segment. Here’s what I found out and what I think the impact of this machine will have on the segment.

Yves Leduc

First of all, the folks in Valcourt are taking dead aim at their neighbors in Minnesota, and it sounds like they have the ammunition to make life difficult for Polaris, the makers of this year’s oh, so hot RZR.

Make no mistake, when BRP executives use the term, “no compromise” in describing the new Commander SxS family, they mean it’s going to outperform Polaris in every way possible. And from what I can gather—without having ridden or even seen the Commander first hand— they may have done just that.

Yamaha’s Rhino, the machine that launched the Rec-UT category, isn’t much of a player at this time, given consumer reluctance to get too close to the lawsuit-prone vehicle. And Yamaha hasn’t made any significant changes since the 2009 model year. So, it really comes down to BRP’s Commander against the Polaris RZR lineup.

One experienced off-road rider, who is very close to Polaris, says the Commander is a better performer, is better engineered and has better fit and finish. At about the same MSRP, that’s going to make a show floor buying decision pretty easy, even for die-hard Polaris fans.

Here’s just one pre-launch quote I pulled from a Polaris forum: “If they put a 900 Rotax in (the Commander), I would be tempted (to buy it).” Well, hello. The Commander 1000 comes with a 1000cc, EFI V-Twin Rotax. There you go.

And the Commander 1000X performance package carries an MSRP of $14,699 vs Ranger RZR S at $13,999 with only a 760cc EFI V-twin, generating 55 hp and a top speed of 63 mph. It has a carrying capacity of 300 lbs. The Commander generates 83 hp, has 600 lbs carrying capacity, 1,500 towing capacity, and a top speed of 72-mph to 75 mph, a BRP official told me. The RZR does have better ground clearance at 12.5 inches vs. 11 inches for the Commander, and the Commander is heavier at 1,200 lbs vs. 1,100 pounds for the RZR.

One interesting feature is the Commander’s two level cargo bed with a 600 lb carrying capacity, 400 lbs up, and another 200 lbs below in a lockable storage bin with a removable divider.

Here’s another unique engineering twist: Both passenger and driver seats can be easily removed for free-standing use in the field. Why sit on the ground, when you can pull the padded seats from your SxS and relax in them? It’s one of those ideas, like, why didn’t I think of that?

BRP Rollout Plans

“We said at the end of 2007 that we would have a side-by-side in 2010, and here we are,” Yves Leduc, BRP’s Can-Am chief, told me last week. “Despite the worst recession in history, we stayed the course. We could have postponed this project, but, instead, we made it a priority.”

Leduc likes the way the timing worked out. “If you compare our entry here with our ATV entry in 1999, it’s two different worlds. With ATVs, we entered a mature market with six very strong competitors.”

Now, BRP has several things going for it, says Leduc:

  • Very strong recognition for the Can-Am brand.
  • A dynamic and changing market segment for performance machines.
  • Limited competition, essentially only Polaris.
  • A unique segment that provides the best features of performance and utility machines.

“Clearly, we saw an opportunity to define the segment, a no compromise segment, when we started looking at this three years ago,” says Leduc. And it appears they did just that.

The Commander lineup, says BRP, feaures “the best handling in the industry” with power and work capacity. “It’s not an extreme sport vehicle,” says Leduc, “it’s a comfortable sport package, one that allows you to get the maximum out of the vehicle.”

BRP’s target buyer? “It’s the enthusiast; that’s clearly the buyer for the Can-Am, they tend to make it part of their lifestyle. That’s the emerging buyer for the SxS, many of whom never owned an ATV. We’re also targeting hunters and fishermen and large estate owners, who want the best.”

The Can-Am lineup will be rolled out to about two-thirds of the company’s dealer network in all states right away. He wouldn’t tell me how many dealers will receive machines or how many will be available this summer.

Limited distribution will begin in July, mostly to Quebec dealers, and demo rides are planned across the U.S. this summer. Full production will begin this fall in Mexico, accompanied by a major advertising blitz.

“The idea,” says Leduc, “is for us to get feedback from this first generation of users as we start shipping and adjust as we go along.”

At the same time that North American dealers get the machine, it will be launched internationally in all countries in which BRP has direct distribution, including Germany, Austria, the UK, France, Belgium, Luxembourg, Netherlands, Spain, Brazil, Mexico, Australia, New-Zealand, and Japan. Then it will be sent to BRP’s authorized distributors, reaching a total of more than 50 countries.

The Can-Am Commander 1000 XT will be homologated for use on European roads.

BRP doesn’t have an electric model, nor a four-seater to match Polaris, and there aren’t any coming as part of this launch. “But,” says Leduc, “you can count on BRP continuing to improve the lineup.”

So, the battle is joined. JD

Contact me with news tips and story ideas at jdelmont@dealernews.com or 952/893-6876.


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