Wednesday, September 19, 2012

What Happened to CF MOTO part 2

So I heard from a bunch of American stores and dealers who happen to love the CF MOTO line yesterday including some that are extremely upset they can no longer sell scooters. I can only imagine why they are upset given that many of them invested or picked up the CF line because of the scooters so a change in management or direction would upset them. This is a business decision and if this is what the factory decided I would respect that, but I would argue that pulling out just as the scooter market rebounded was a tactical error.

A bigger error is what I blogged about yesterday for the new management to fail to maintain third party logistics relationships and to think they could solve all the issues internally. I would say given the number of complaints its clear they can't. 

So there is a strong need for CF MOTO parts support in the USA they are not meeting and doing nothing about. So the small car or motorcycle dealer that picked up the line saw a surge in product at a discount, invested, then the economy slowed down, the company pulled the plug just when sales picked back up. That's basically the story of CF according to some of the dealers. Now that sales are back up they can't get the units.

The blog posting yesterday was meant to help guide CF in the right direction. Instead all I got were complaints about Dave Auringer and Adam Tao (the new CEO/President of CF USA) who was previously  in charge of CF Europe which is probably why CF MOTO Europe doesn't return my emails since they closed.  I don't recall meeting Adam Tao at Dealer Expo or at my meetings with Lev or the reps over the years and I've never met Dave Aringer so hopefully they can get a better picture of the need for support for the Diamo, Italjet, Yamati, Powersports Factory, Twist N Go - CMSI TNG lines they stopped supporting.

This is meant as a way to get their attention and look at the needs of the consumers and the stores. Maybe they are ignoring them, maybe they have been too busy re-organizing to pay attention to this smaller market since this isn't where the sales are focused. Regardless, they need to support the parts for third party and private label brands. I have emailed, called, and still waiting for a call back because if they're not working with us they are clearly not working with all the support companies and parts companies in the industry. Sadly they fired the people that knew this and they need to bring in new people that have these relationships or rebuild them. I understand its new management, but they need to quickly grasp that a  brands reputation extends beyond the segment you want to push like just ATVs or UTVs.

Bringing in new ATV product is a great idea, but the market is geared towards the UTV segment. Leading me back to the whole Polaris / Z6 issues that are ongoing. The Z6 is probably the future of the company in North America, but without third party support for parts it will fail. If you abandon supporting the Italjet and Diamo consumers or dealers then it will affect what dealers think of the brand. No amount of marketing or ads in Powersports Business can solve these issues nor will it make dealers think the brand has changed for the better. 

Same goes to the scooter line and the reputation of CF MOTO. I talk to importers and exporters in South America all day, many of them ask me what I think of a company. There are huge brands in South America that are not in the USA yet dominate market segments in Mexico or Colombia. As CF attempts to get into these new markets they will find that what they do to US dealers does affect their reputation abroad as well. Just food for thought. 

I have some solutions for CF MOTO USA, if they would return an email I would gladly help them out before its too late.

Yesterdays' Blog.

I got another angry call yesterday about CF MOTO. Instead of focusing on sales which is what I should be doing I was focused on helping a dealer track down a part since CF refuses to sell him the part. I've been dealing with this a lot lately because the parts department has basically abandoned support for several items. CF MOTO put out thousands of scooters in the US market under both CF and several names ranging from Yamati to Italjet. These regardless of how I or anyone else feels need to be supported and must have third party support. At one point the Miami warehouse had over 2,000 CF MOTO units so these bikes are all over the continental USA and Puerto Rico right now.

Ever since Lev Mirman left CF MOTO, every single contact I have had at the company has left. This has been stranger than my last ten years of relationships at Piaggio USA. Basically, everyone you meet eventually changes at the top. All the people I met at Piaggio back in 2000 no longer work there, CF Moto USA is basically the same thing. Nobody we know from their inception is there anymore.

From Matt, Glenn, Kevin, Faith, Ivan, every single person we connected with is gone. Not a single Chinese representative in Europe or in China responds to emails that I send anymore. 

Last I checked CF MOTO Spain closed, and CF MOTO Europe no longer answers emails, they might be closed as well. I will find out in a few weeks. These guys started out with a lot of passion, say what you will but Kevin and Matt both had a lot of passion, working very hard to establish a brand with two hands tied behind their backs. If there is anyone in this industry that is good at marketing and talking to dealers its Matt Clayton and its a real shame to see him go when he's one of the few loyal guys out there.

CFMOTO is one of the few Chinese manufacturers that had established its own subsidiary in the U.S., similar to the Japanese models in which the manufacture manages its own brand through its own manufacturing and distribution channels. Until this point they had done a great job and I would commend them for their efforts. I'm not sure I can do that, I left a voicemail last week, sent an email, not a single response about a dealer having an emergency. If he gets sued over a lemon law issue I am the first that will tell him he's got a good case against the factory if only because new management doesn't bother to care. 

At MRP we took over 3 private label importers of CF MOTO which is the reason we have so many CF MOTO dealers buying from us. Diamo, Yamati / Powersports Factory, TNG Scooters all these companies would buy from CF MOTO in China and private label their units. Even the Italjets that came in for LS Motorsports were CF MOTO. So the company would work with us in solving issues these dealers had. We were doing warranty and third party support for the company and shipping out parts to their dealers and non-dealers to help the brands image. I can't get a single call back from the company nor an email response from the new management.

I have personally met senior management while at EICMA, I met Mr. Guogui Lai. Nobody reaches out anymore and the new policy of letting go of the legacy staff might be a mistake when trying to hold on to the dealers. I understand they have discontinued the scooters for the USA, they lost a small fortune by overordering and due to the poor economy, but you cannot abandon support for a market nor stop selling parts to your partners like MRP. Its just bad business. There are those that run from the fire and those that run into it to fix the situation. When I see a company like Diamo closing its not a loss, its an opportunity and even for CF MOTO one of the things that stood out was they supported MRP so we could support the former ATV and Scooter dealers Diamo established. By ignoring our requests, by firing all the former employees that worked very hard to keep the CF MOTO brand name intact they are tarnishing their reputation. MRP was working very hard behind the scenes going as far as drop shipping parts all the time to dealers with the CF Logo on it and it would be a third part drop shipment from MRP. A CF MOTO sales rep could call us say they had an issue, they needed a favor like a warranty part that CF didn't have and we would mail it out for free because I knew that sales rep would help us out in the future. That is third party support that MRP would do. If CF in China was going to delay an item all Faith or anyone else at CF had to do was let us know and if we had it in inventory we would send it out. I can't get the new people to reply to an email regarding parts anymore.

CF wanted it both ways. To establish a brand and to keep selling to companies like QLINK in the USA.  Most other Chinese and Taiwanese companies simply hire independent importer/distributor companies to private label, but once you come in direct there is no need for them. This was 90% of the problem Lev faced that China management didn't understand. He spent three years changing this policy to be exclusive.  The next problem is that you cannot stop the parts support. The moment you stop cooperating because some new US management comes in you burn bridges, you burn scooter dealers, they in turn will tell the ATV dealers you are going after. You cannot stop supporting Diamo, Italjet, PSF dealers. What is it that the new guys in charge of the US don't seem to get?

I was promised repeatedly a Z6 for us to develop parts for.

 Never got it. The ATV we tested out was damaged and by the time we developed an exhaust it was discontinued. The key to building these relationships is making sure your partners are informed, but when even the American employees don't know what is happening how can you partners help all the ex-Italjet, Diamo, Qlink, TNG, Powersports Factory dealers? Especially when all the employees we were friends with are gone and the new ones won't call us back?

CFMOTO’s parent company, ChunFeng Holding Group Ltd. has to make the decision if they want to stay in the US market and be serious about it. Yes, they brought in new management, but they are still failing to reach out to partner companies. I talk to 100 dealers a day, multiply that by 365 days a year, and I'm not jumping ship like many of their employees are. You can spend $100,000 in marketing and it won't fix the damage a few dealers can do if you don't have private label third party support for all the private brands you sold. Something the new guys in charge are not understanding.

So will CF MOTO USA be the next company on the China chopping block? Taking ads in Powersports Business isn't going to answer this question, nor will the press since they will not ask hard questions. The US Powersports press won't ask this because they are dependent on the few advertisers that are left. Nobody asked the hard questions before Carter left with SYM, they won't ask the hard questions of CF either. We have a short term memory in this industry, few people ever say Cannondale or TigerShark anymore. 

My suggestion. Get the parts support back on, have someone return our calls and emails. Have someone make sure there is still support for the Italjet users and Diamo riders, because the next time a dealer asks why haven't we got the part or restocked I'm simply answering because CF MOTO USA doesn't return our emails in a timely fashion.

MRP will still be here, but to say we are disappointed with what we see at CF is an understatement. 

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