Friday, November 12, 2010

Unfair Trade Practices

Yesterday I wrote about how to stay in business in 2011.

Today I want you to focus on how to stop the Unfair Trade Practices that continue in our industry. Mainly the fact that many of us support and continue to support brands and companies that in the end make the industry weaker not stronger. So I have two points today first as an industry we have to help stop the illegal importation of non-compliant vehicles from non-market economies and second we need to educate our dealer base.

So let me start. We have ruined the US Powersports Industry and nobody seems to care. Polaris, Artic Cat all these guys are moving facilities and plants to Mexico and other countries nobody cares. To make matters worse we have allowed the sheer volume of Chinese product to overwhelm our market. How many American made Motorcycles are sold in China and Taiwan? Maybe 2,000 pieces a year? Harley sells more T-shirts in China than bikes ( which is true for the US as well.) Now I'm a victim of this as well, I asked the state of Florida for a loan to buy machinery three years ago and I was turned down, then I applied for a grant, my banker responded "your margins are better keep importing." I'm still upset about that three years later.

So we have some equipment and we started making a few items, we just got a boring machine. Yes, the cables are a little more expensive but we push them. We push Slipstreamer and other US brands. We give it our best shot.

Still the "dumping" has to end. We need more enforcement from NHTSA and DOT. We need to support the brands that comply like Kymco and stay away from the guys that change their name every two to three years. Non-market economies don't care about what happens to our dealer base. It's all about volume to them. Many of these companies make no profit in the US they live off the kickbacks and subsidizes that the government gives them. Our Commerce Department needs to get serious about this before there is no industry left, look at Italy. They are all living in the past since their homegrown motorcycle market has been destroyed. Let's take the opportunity the downturn has given us and make it into something positive. The only way to do this is my second contention and that's all of us the Scooter Maven included being better educated.

My second point - support companies that support education of the dealer base.

I feel too many people came in at the height of the market, flooded the powersports industry, and helped proliferate a cesspool of uneducated dealers. We have an opportunity here to educate them, make them better and have a stronger 2011 and 2012.

What do I mean? Simple. We need to have dealers attend shows like SEMA or the INDY show and train them for FREE. Stop charging the dealers, do it for FREE. Yes, don't charge them train them! It sounds insane but from the lawn and garden guy to the big powersports guy let's make sure they know what they need to look for and why it affects everyone in the long run when they shortchange the industry.

I spoke to the SEMA director of marketing last week and they loved the idea. Be it helmets, scooters, atvs, everything explain to the small mom and pop operator what they need to look for. Trust me a lot of smaller repair shops don't know what product liability is or "wrongful death suit." Scoot Magazine had some great articles where they published the names of every company that provided them with EPA certificates and proof of insurance. As an industry maybe we should all be asking for this?

Maybe Advanstar and Dealer News could ask for these before someone is allowed to have a booth in the future? Because allowing people to sell dangerous products is just as bad as handing little kids real toy guns, you know one of them is going to use it. You put a bunch of dealers in a convention center and some Chinese guys with signs that say $299 for an ATV and they will buy them without any regard to the industry as a whole.

I know it sounds impossible, but if we don't educate and self-regulate you can't expect NHTSA or others to be on top of everything. In the end a company like Powersports Factory closes and declares themselves bankrupt rather than face a gas tank recall on the Benelli scooters. The moment this happens everyone looses the consumer, the retailer, and the industry as a whole.

So the key here is education. There are some great factories out there that do export and are in the USA be it Honda, Kymco, PGO, CFMOTO, they are all making big efforts to be compliant and to work with the US base despite it being smaller. Let's support those guys as best we can. Then the education part I welcome every company to join me in getting these education classes started at SEMA and INDY, classes that make sense that aren't run by the big interests like the banks or the big exporters.


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