Thursday, March 24, 2011

An Open Letter to the EV Industry and why it will lead to Dealerships Growing again

An Open Letter to the EV Industry and why it will lead to Dealerships Growing again...

Next month we're talking to about EV bikes, I've been getting a lot of emails about the interview we just did on gas scooters, but what about the future? I've been talking to Bart Madson the managing Editor of the site. We have a follow up to this months article on the EV market and what is happening at the dealer level. I've been working on EV units and consulting for a lot of companies since 2005. So this should be an interesting follow up to the outlook on traditional gasoline based units. I'm still brainstorming my ideas here, but just to put them out there I will accept any email suggestions as we navigate this new industry changing powersports and the world for that matter.

One issue with the EV market and gas powered vehicles is that both are a very small segment of riders in the USA. In the traditional gasoline scooters and bikes there has been a complete changing of the buyer / consumer mentality at this point completely accepting the idea of the direct sales approach. I've written often on how this has killed the mom and pop stores ( in addition to JIT, the internet, and the Chinese effect.) It affects us at MRP as well. You need a very small well capitalized company to do direct sales or a large established company that can interact with consumers directly on facebook and by phone without killing your clients - the store with overhead and service to the consumer.

The biggest cost has always been support. Motorcycle riders by nature tend to want different amounts of technical support regardless of the amount of money they are spending. You have the buyer who is willing to pay a shop mechanic to install something properly and the riders that are not. The rise in drop shipping and people selling from their home garage has made this even more stressful for the small store with actual overhead. So if you call CycleGear direct or BikeBandit some buyers want to talk to a mechanic for two hours straight asking about how to properly install a carburator or an exhaust they can afford it. The small shop cannot afford this luxury of time. What ends up happening at the big guy is the sales clerk transfers you to a higher level, then to an expert mechanic, and if they can't solve the issue then back to the manufacturer they are drop shipping from. I know I can't afford all that time and that's one reason I've always been wholesale only, you don't want to take business from your clients and you want the store to support what they sold, but we are in a new age where this is becoming more fluid and I am starting to see even my approach is not 100% correct.

EV is changing that as well. So while I look at companies like LeoVince who have gone straight to consumers and dropped distributors, I also see what is happening in EV and why dealers are becoming more important than ever. It might come to the point where gas vehicles no longer need dealers, but EV at this point will require the full support of the industry at all levels to grwo.

In the EV world its even more complicated because the industry is relying on the knowledge of the local shop. On a highly complicated unit like a Vectrix this requires a lot of training. Small stores just don't have the staff to give the time buyers want on phone orders. I know this because I get calls everyday asking for installation tips on a jet or a carb, I would have to hire twenty people to handle all the calls. It might not be a bad idea, if I had the investment and the money I would gladly hire twenty people, but keep in mind many people call stores for technical help but don't buy anything. Worse they call the store or manufacturer, jam up the phone line, and then buy on Ebay. EV is a higher level of support on a more expensive bike. Not everyone can replace a module or diagnose a battery issue over the phone, you will need specialized centers.

That's something I like about EV is that you need training at the dealer level. You can't go around the dealer. People often complain to me that I should sell direct and screw the local dealer, but that's a consumers point of view. The cool thing about EV Scooters and Motorcycles. YOU NEED THE DEALER. You can't just go to EBAY and buy a part or replace it yourself. The tech is too new, its complicated, and if you open it up sometimes there's a plug or wire that will snap showing the consumer tried to do the repair himself so it voids the warranty.

My goal has always been to support the store that supports us. EV will be about the dealers, because they will have to be properly trained. They are appealing to the new affluent, the baby boomers, the early adopters of tech like an IPAD, the people who care about quality, and saving the earth. They are likely to support the shops and not try to undercut the dealership on parts and service.

EV Scooters and Motorcycles require a service infrastructure that the Chinese supply side has not broken. It requires evangelism on the side of the riders. It requires training of the end user, the service center, and the parts distribution network. This cannot be cut and bypassed by the guy working from his home without any overhead. So I see EV not only as the future, but Maybe just MAYBE ..... the future of service centers across America. The more complicated and more interesting the technology becomes, then it becomes something the guy working from the U-Haul cannot fix.

Meaning that there might be a resurgence in Dealerships thanks to the new high tech future.....

The Scooter Maven has been actively involved with EV Motorcycles and Scooters since 2005 having helped consult with Vectrix, Malaguti, and has advised several OEMs on how to maximize their competitive advantages in the emerging field. MRP is now expanding into the third party support for EV Scooters and Motorcycles

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