E-ton: Seeking a place among the titans – February 12, 2007

Steve Murphy, E-ton America’s vice president, envisions his small South Carolina-based company alongside the likes of Honda and Suzuki both in terms of quality and on dealer showrooms.
E-ton manufactures small-displacement ATVs for youths and adults in addition to on-road scooters. The company’s current dealer network is approximately 700, with high concentration in the Midwest, Southwest and Texas/Louisiana area.
Murphy tells Powersports Business the Taiwan-made offerings are holding steady in a competitive U.S. market and strives to market itself as a high-quality option to the Japanese instead of a compatriot of mass-produced Chinese products. But Murphy admits E-ton did consider the latter option.
“We produce our products in Taiwan with excellent quality control,” says Murphy, who has been E-ton’s U.S. vice president for the past five years.
Future Production
Though E-ton has two plants in China, and Murphy says discussions have taken place about moving future production to the mainland, he says there would still need to be a verification of quality before the company would even think of moving any product.
“The cheap Chinese product is everywhere and that’s not our market,” he said. “That’s one reason we’d like to stay in shops that carry Honda or a Suzuki. The $500 ATV buyer is not an E-ton customer. A good quality product buyer goes to a franchise dealer and we are competitive in the franchise dealerships. We are not competitive at Joe’s Car Lot on the corner.”
The company’s dealer strength is holding steady through normal attrition, and they are selective as to who carries the line. Murphy prefers to have his products in franchised
dealers with the major powersports brands — the “Big Six” — and with a solid dealer who holds pricing. This means avoiding big wholesalers to protect dealers’ margins. Murphy says E-ton has a few strong independent dealers, but not many.
“We’re well aware that if one person gets on the Web and cuts margins for the company then most of our dealers are not going to need the product,” he said.
“As far as dealer support, we’re constantly refining our Web site to make it easier, basically streamlining our procedures and the look of our company to Yamaha, Honda and Suzuki. Whatever (a dealer) is used to doing with the likes of Honda, it can be very similar with E-ton. We’re trying to integrate ourselves into the dealers.”
E-ton’s site allows dealers to order parts, register vehicles, file warranty claims and search VIN numbers of any unit and the model’s warranty history. Murphy says dealers are able to perform online licensing by model and receive support through service bulletins. The technical approach to customer service is beneficial to both dealers and company reps.
“We try to adapt as much as we can to what the dealers are asking for,” Murphy said. “We don’t have very many complaints regarding our service department at all.”
Another area Murphy is excited about is the development of several new utility karts somewhat along the lines of a Yamaha Rhino, but scaled down for youth drivers in the form of a single-seater with a small cargo bed. It’s similar to driving a utility vehicle or go-kart more than a traditional ATV due to the sturdy chassis and quality suspension, says Murphy. An adult version is also in the works.
Asked about the possibility of a larger-displacement ATV along the lines of KYMCO’s 500c offering, Murphy says “we’ve done our homework… E-ton does have a prototype 500cc 4×4, and we have made a decision to put that on the shelf for now.”
Murphy says the decision was not based on capital or capacity.
“We have plenty of capital and plenty of capacity,” he said. “Neither one is a stumbling block for what we want to do.”
But Murphy did admit to several hindrances that are keeping E-ton from major growth — the U.S. market saturation with Chinese products during the past 18 months and sales incentives by the big OEMs on their youth ATVs. Though he wouldn’t give specifics, Murphy said ATV sales numbers are slightly down while their scooter numbers are significantly up.
“I don’t see those two factors changing anytime soon,” he said.
In the meantime, E-ton and its staff of 10 will continue to offer traditional rep-based and online dealer support in hopes of someday turning the “Big Six” into the “Big Seven.”
“We expect to make good quality products,” Murphy said. “Let the low-end guys, the cheap non-supported products from China fight it out at the low-end. We don’t care to play in that game.” psb

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