Tuesday, November 22, 2011

Ultra Motor is restructuring

ULTRA is changing hands.
It might be closing or it might be liquidating? Who knows, but it seems like ULTRA sold the factory to some European investors. I always thought this was a neat ( in-between ) unit. Something closer to a bicycle than an E-Scooter. It was a mix of sorts being that it was sturdy, heavy, and not at all like the cheap plastic E-bikes you see in China. 
I liked it, I thought it would compliment a full range of products, but I didn't think it would be a brand of its own. Sort of like the Segway, it's impossible to run a stand alone shop based on one product unless you have deep pockets and money to burn.
Here you have Steve from the Scooter Scoop at Amerivespa last year talking about the Ultra lineup.

In the USA most of the ULTRA dealers have been high-end bike shops. Bicycling is bucking the trend in most cities with new stores, new high end brands, and its experiencing a resurgence in Europe. However, in America people are not running to bike shops for e-scooters or e-bikes. Most stores can't handle it. 
It's difficult to decide how to market these units in the USA since there's very few year round sustainable markets. Not every city is like Austin or Miami. You ask someone to spend $5,000 on a carbon fiber bicycle they will do it, you ask them to spend $3,000 on an E-bike only a select few trendsetters and high end gadget junkies will go for it. It's not a product that has a spillover effect like an Ipad. Riding an Ultra is not a status symbol. It's not made in Italy, it doesn't go very fast, and if you go into the wrong neighborhood it won't accelerate at a speed that get's you away from muggers. It's designed for parks and to stroll in a safe zone. Urban or rural America for that matter isn't exactly ready for Ultra and Segway units, not when there's a pawn shop lurking around the corner. 
The good thing about Ultra is that it was modular so it was easier to fix. Most e-scooters are not modular and the certification for repairs does not exist. Turnover at bike and scooter shops of certified mechanics is a huge issue. We already suffer as an industry that only has two or three top tier brands that offer certification ( Ex Honda, Yamaha, Suzuki, Piaggio ) even Vectrix never got around to doing training or certifying any of the US mechanics before its first bankruptcy. It's a difficult thing to do even for up and coming brands only Kymco is offering classes most importers are so busy trying to sell they don't have time to actually force dealers to send mechanics to classes.
Ultra is by far one of the best products out there. It will be interesting to see who picks it up and restructuring might bring the costs down since all the expensive design work has now been done. For it to work it has to cost about half of what it costs now, it might make sense to assemble it in the USA, and if I was in charge I would make it part of a full lineup. The same way Eton has scooters, e-scooters, e-bikes. You need a full range to be sustainable. Especially in gas country. Not every bicycle shop can sell e-bikes and that's the first lesson in all of this.

LONDON, UK – Yesterday, Ultra Motor Ltd. has filed for Administration in the UK which is comparable to the Chapter 11 bankruptcy protection in the US. The company has sold its subsidiary Ultra Motor Taiwan to a group of European private equity investors. Administrators are exploring the sale of Ultra's E2W business, including the A2B range, pictured here.
Ultra Motor Ltd. is the holding company that after selling its Taiwan subsidiary still holds two distributing companies located in the Germany and the United States. Next to that there are subsidiaries controlling the Ultra's E2W business, including the A2B range.
According to David Scrivener from Ensors Chartered Accountants, who is handling the Ultra Motor Administration, the reason for the financial problems is in the fact that Ultra Motor’s products didn’t sell as planned. “The investors in the company lost faith and restricted further investments. The company is not burdened with huge debts and we are looking to sell the complete company.”
The Ultra Motor holding company in the UK had a staff of ten. The subsidiary in Taiwan was the biggest company in terms of the number of employees with a staff of 100. Ultra Motor Taiwan was sold yesterday to a group of European private equity investors. According to Bernd Becker, CEO of Ultra Motor Taiwan, these investors come from the electric bike sector. They will continue the Taiwan company under the same name.
Ultra Motor Taiwan is an e-bike propulsion systems business which includes the electric motor manufacturing plant located in Taoyuan, Taiwan, as well as the power electronics R&D facility in Taipei. As part of the acquisition, Ultra Motor Taiwan has received additional funding to finance its growth and continued R&D activities.
“We are excited to become a stand-alone company and single-mindedly focus all our resources on the continued growth of our successful motors and propulsion systems business. Over the past 12 months, we have expanded our customer base for e-bike motors and propulsions systems worldwide and we are delighted to receive strong financial support for our further growth,” said Bernd Becker. From: http://www.bike-eu.com/news/ultra-motor-ltd-filed-chapter-11-5408.html

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