Thursday, April 21, 2011

Kymco USA is now 100% Factory Owned

Most Kymco dealers already know this, but I figured I would break the news since no other press outlet has reported on it. Kymco will have an official press release sometime this week, but I figure let me give it a shot and explain why this is such an awesome thing.

Back when I first got into the business we had STR. From the original bunch that started at STR several companies emerged ( some former employees went on to start Eton America ) one of them is now the national sales manager for Genuine Scooters. Some of the best and brightest came out of what STR started, fierce market competitors, guys who had all the right skills and forged our little scooter industry. I hope they take pride in what they accomplished because I believe its legendary.

I'm just going to give you the short version, but STR was an investment for a company that had a lot of investments. Over the years they started with Tomos which then opened up its own distribution point for Tomos USA, they also distributed Hyosung scooters "Sense" at one point, to make a long story short STR had been doing this for years and years. When I was still worshiping my 8-bit Nintendo and I was looking forward to the 9th grade. So this company cut its teeth in the industry. I have the highest respect and admiration for the guys that have been there over fifteen years building Kymco from back in 2001 to what it is today.

They did the unthinkable. Gave credit to small mom and pop shops, went out and promoted an unknown Taiwanese brand as the next Honda. They watched other companies with bigger budgets come and go. Some of those original guys are still there and they should take great pride in what they have done because now Kymco is known all over the USA. People like the Scooter Maven brag about having real OEM "Kymco" parts, and you see copycats out on Ebay selling JYMCO, SYMCO, and LYMCO parts in green packaging that looks close, but is not the right thing. It's always easy to imitate isn't it?

Dealers get upset when they can't get the franchise and it's still more profitable than the Italian or Japanese brands ( I will probably get an email or two for saying that, but its true it was even true when I imported Malaguti and SYM )

Kymco being aggressive is one of the reasons they are number one in Taiwan. STR like many distributors found a solution to that and a few years back let them come in as a joint venture and became Kymco USA. Recently the factory purchased from what I understand the full stock in the company and now is a wholly owned subsidiary. It's still the same management, still the same staff, nothing has really changed. If anything they will only get bigger so - Prepare.

Now I have always pushed for this as an example of why other Taiwanese companies have failed in the USA. It's nice to have an importer take all the risk, take all the flack, pay all the warranties and then fight with the factory. In the case of Dinli if your ATV should cause the unnecessary death of a young American boy due to a factory known faulty component the only one screwed would be the importer, because lets face it who can collect in Taiwan or China when you have a fight with the factory? Nobody. They let the importer fold or take the flack, pull out of the market. Better yet should your importer go up in flames, not have the money to continue to buy more units, or have a bunch of legal issues because of something you did just appoint another importer. That's one of the hallmarks of the American Powersports Scooter Industry. The mainland Chinese brands don't have these problems, they just close, change names, or fail to pay their liability insurance so if they have no assets and its some dude working from a basement who are you going to sue? Nobody. My favorite is when they come right back with a new name and start over the following week.

So the only reliable brands tend to be the ones where the factory have assets in this country and are here for the long haul. They commit, they hire the right people, bring a good product, and commit for the long run. That's why Kymco stands out. They committed to the American Powersports Industry in ways others failed to.

You don't cut and run, you build up a surge and kick the crap out of the marketplace. That's what Kymco did and that's why it worked. That's why now after two horrible years in the market it's my prediction that they will come out on top.

Kymco has proven time and time again that not only would they feel comfortable having American management, but they have followed Honda, Yamaha, Suzuki, and Kawasaki in taking all the right steps. From focusing on Direct consumer marketing to creating a relationship with the American consumer ( NASCAR, Racing, etc...) things unknown in the Asian dominated sell sell sell advertise to dealers only mentality that dominates the US Powersports Industry.

I called this two years ago in Motorcycle Product News. This is an $800 million dollar company. They have a vision. I've sat here and watched TGB fold up and not come back, SYM you know that story, and everyone else in Taiwan has had its share of issues. The economy got bad, many folded, others pulled out of the market. Let an importer risk it all and loose money. Not these guys.

Kymco took the right steps not just in the USA, but all over the world. I have the sales charts for Germany, Italy, Spain, and France on my desk. Guess who rose to the top during the worldwide financial crisis?

Guess who I predict will rise as gas prices rise?

No other Taiwanese firm comes even close to what they have accomplished.
Not PGO, not even on the list in Italy
Not SYM, not even in top 10
Not Eton, not even in some markets

It's Kymco. They continue to rise and grow to the point where they have surpassed even Yamaha in Scooter sales in Italy. What does that mean? They will likely repeat that success in America and pass Yamaha in registrations in the years to come.

The most difficult market in the world is Italy and Kymco is outselling Yamaha there. They have done well in Germany, UK, Spain, and the most difficult market in the world.

They hired the right people in the USA. Stood by them as they made difficult decisions and it will pay off. It's good to see their commitment to the market is for the long run and I would trust if I was a consumer a Kymco product over any other from Taiwan or China because of that commitment to be a US wholly owned subsidiary.

Good for them, we can only wish more companies would follow their example.

To see my past report on Kymco for Motorcycle Product News Magazine in Taiwan click here

Tour of the Kymco Factory in Taiwan

Kymco Promotional Company Video

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