In 1980, a mere 24 motorcycle manufacturers were operating in China, producing a combined annual output of 49,000 vehicles. But, by 2000, according to the China National Automotive Industry Consulting & Developing Corp. (CAC), output reached 11.53 million units – more than four times the 2,415391 units produced in Japan during the same year.
The proliferation of two-wheeled imports from China is a major concern to many of the scooter suppliers Powersports Business spoke with while preparing this Focus report.
Market sources estimate there will be over 100,000 scooters sold in the U.S. this year. A decade ago, under a dozen companies distributed the vehicles. Today, more than 40 “importers” work the industry, many offering inexpensive Asian-made clones of high-end brands. It is these clones, sources tell Powersports Business, that could upset the U.S. scooter market.
“When I started importing Derbi in late 1999, early 2000, there were approximately seven other manufacturers,” said Doug Farrelly of Derbi West, LLC. “Today, at last count, there are somewhere around 40. However, close to 30 of them are junk. Everybody is bringing them in, and they’re selling to anyone. Call the manufacturer, order a container, have them shipped to your door, and all of a sudden you’re an importer. It’s awful.
“Derbi spent money dotting all of the Is and crossing all of their Ts with all DOT and EPA homolugation, and I pay $40,000 a year in product liability insurance. We don’t sell to the public; we sell only to our dealers – and they have to be a quality outfit with a storefront and repair facility. There’s a criteria. The same criteria used by the big dogs to grow the market.
“But, all of a sudden, we’re competing with all of these companies that aren’t doing it right,” Farrelly continued. “They have no parts and no dealer infrastructure; yet the untrained eye – the consumer — doesn’t necessarily know the difference. Unfortunately, they get taken by buying the cheap and finding out that their bike is subpar.”
Low-priced product coming from China causes a big concern, said Joel Martin of Malaguti USA, and could hurt the image of the market if it’s not regulated. “There are importers approaching car dealerships, asking them if they want a container of scooters for $500 a pop,” Martin told Powersports Business.
“It can be a double-edged sword,” said Costantino Sambuy, president of Vespa USA. “On one side it’s OK, because they are widening the market. But, on the other side, it can cut the market down. So, to us, it’s a bit of a problem. There is no commitment for this guy to stay in the market, and the people moving this product are just in to make a dollar. No spares, parts, accessories.”
Honda’s Jon Seidel says most of the companies flooding the market with low-priced clones do not have the infrastructure in the U.S. to handle dealer and customer issues at this point. “While dealers are excited by the initial retail price point, they become disillusioned when difficulties occur in obtaining parts or assistance with service issues that come up,” he said.
Still, Farelly says he’s “confident the cream will rise to the top and the strong will survive,” adding, “the people who think they’re getting a good deal by buying a $500 scooter on Ebay are in for some really hard luck.”
“After going to EICMA, I saw this is beginning to happen in Italy,” said Malaguti USA’s Martin. “Lawmakers passed lemon laws there. The Italians became more aggressive, and the dealers got tired of the bikes braking down. The result is that sales of Italian-made units are moving back up.”Low-priced scooters flood North America
Copyright 2004 Powersports Business