Apr. 6, 2009 – Exclusive deal set for CFMOTO

A U.S. company that has expanded its powersports dealer network and retail sales has come to a key distributing agreement with a Chinese manufacturer.
CFMOTO Powersports, based out of Plymouth, Minn., has become the exclusive U.S. distributor of CFMOTO products, including the manufacturer’s automatic 250cc motorcycle.
The U.S. distributor, which has five distribution outlets in the United States and a parts and accessory warehouse in Plymouth, has been able to nearly triple its dealer network in the past few years, Ivan Escalante, CFMOTO Powersports’ national sales manager, told Powersports Business. That dealer network, which is currently around 230, has retailed CFMOTO’s scooter, motorcycle and off-road lineup, including an ATV and a UTV. The distributor’s most popular product, however, has been its V5 and V3, the automatic motorcycles. “That’s really the niche product,” Escalante said. “There’s nothing else out there” at that price point. The two automatic motorcycles retail for $2,999 and $3,499 and feature a two-year warranty.
With that key niche product, CFMOTO did $7 million in sales in the United States last year, Escalante says. The company believes that number can at least double in the coming year as its dealer network continues to expand. CFMOTO, which has five outside sales reps, saw significant growth on the East Coast in 2008.
“Regardless of the fuel prices, I think we’re still going to have a good season this year,” Escalante said. “We offer an alternative transportation. I think a lot of consumers are going to be shopping for the best value, like our V5, our automatic motorcycle, comes with aluminum mag wheels, front-rear disc brakes, MP3 player, a liquid-cooled engine.”
CFMOTO is hoping to broaden that line of automatic motorcycles, with plans to introduce a two-valve engine in the near future. That could double the current product’s horsepower and increase the top speed from 75 to 90-plus.
CFMOTO, which is owned by ChunFeng Holding Group out of Hangzhou, China, also is looking at developing a 650-800cc engine as well as eyeing the PWC market. The manufacturer has been developing engines for 20 years but just in the past five years has been building entire vehicles, Escalante says.
In past years, CFMOTO had several distributors in the United States but made the change to one exclusive distributor earlier this year.
“As our company grows, it is very important to have full control of our distribution channels and to develop brand name recognition as well as brand loyalty,” Lai GuoGui, president of Chunfeng Holdings Group, said in a press release.
Escalante notes the exclusive agreement is key not only to CFMOTO Powersports, but dealers and consumers as well.
“It confuses the dealers,” he said of manufacturers having more than one distributor in a country. “It confuses the consumers with different names and tags on the bikes. I’ve seen the V3 running out there” with different brand names.
“So the consumer will see another bike that looks the same and say, ‘It’s kind of the same price; I don’t really understand.”
That won’t be the case with the new exclusive distribution policy. “Being exclusive gives us the ability to define dealer territories, strictly enforce our rules of customer service and make sure our dealers stay profitable,” said Lev Mirman, president of CFMOTO Powersports.