Wednesday, February 23, 2011

CF Moto big plans for US

CF Moto USA had one of the best displays at dealer expo 2011. I've been following them for quite some time. First the company had its first real official dealer meeting. I couldnt stay since I was busy teaching the scooter session with Josh Rogers but I had my people there and it seemed like it went better than expected. Matt Clayton has returned in full force with some big plans for the company and the senior factory management has completed the transition they needed to run a smoother operation.

I believe like every company they overexpanded too quickly and set up some less than optimal dealers. Some of these guys are clearly too small to buy the Z6 or any offroad products. This is a similar situation to many emerging brands like Kymco. You have to split the base in two offroad only, full line, and scooter only to grow. As you grow beyond the small scooter dealers how do you grow the brand? Some of the dealers they selected originally were also Baron dealers or price point dealers so Matt has his work cut out for him.

Still the company has some of the best engines, one of the few Chinese brands everyone wants to have, and associations with top European companies like Ducati Energia, MS, Malaguti Italy and more. CF is also a big engine supplier to higher end karts, UTVs, and scooters for other companies. They are also factory backed 100% now so unlike many of the private label guys they won't be going belly up anytime soon actually they will grow.

My question is how do they expand in a smaller market? get more floorspace in the showrooms? and phase out the less than desirable stores that only buy on price?

The price point Chinese only shops are what kills the brand.

To grow they have to go market by market and evaluate what the plan is. CF Moto is also one of the very few guys that really have liability insurance, epa, third party testing, and best of all parts. MRP is also one of their partners.

I've invited Matt to be on our panel at SEMA this year. He was there from the start, he's in the most important market in the country, and has experience working with Chinese management that is only here to make a quick buck and the guys that want to build a real brand. CF got him back for a reason so we hope this time they listen to his plans. I know 2011 will be a big year for CF so let's see what happens and I wish him all the best.

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