March 12, 2007 – United Motors making big changes for 2007

INDIANAPOLIS — As United Motors celebrates its 10th anniversary in 2007, the company is positioning itself to be an even stronger presence in the powersports industry during the next decade.
Besides recently inking an 11-year agreement with Hyosung Motors Korea to help UM expand its product line, the company also has plans to develop a light touring motorcycle, new ATVs and has even hinted at the possibility of a UTV in the near future.
Hyosung Agreement
UM recently announced its partnership with Hyosung Motors and Machinery Inc. Korea, which will allow UM to expand its line beyond the 250cc product range, and provides Hyosung Korea the benefits of UM’s U.S. distribution network. After discussions with its dealers and sales reps, however, UM decided to ramp up one phase of the agreement that wasn’t slated to start for another three years.
“The original deal we signed was for UM to redesign all the body work on the street bikes. We’d do our own body work and then launch them in 2009,” said Jose Villegas, vice president of marketing and public relations for UM. “But once we started talking to our dealers and regional sales managers, we didn’t see the point in waiting three years when our dealers were asking for bigger product now. So we came back and modified our original agreement with Hyosung, which allows us to buy the products as they are today — with our own graphics, our own colors, our own branding — and bring them to market now.”
Once Hyosung agreed to the change, production was set in motion, and it’s been a big adjustment for a company that until recently had sold only scooters and dirt bikes. “We went full throttle at the beginning of last year, and we introduced our 2007 models in July,” Villegas said. “And it changed our company completely because we went from selling scooters and dirt bikes to selling a complete line of products. We really consolidated our position as the complementary brand of choice last year with the addition of these bikes. We’re constantly trying to communicate to prospective dealers why we’re the best complementary line of choice and it’s worked.”
Villegas says one thing that’s really boosted dealer awareness of UM has been the company’s new “I am UM” marketing campaign.
“So many companies are all about product,” he said, “but we’re trying to get across to dealers that there are so many people who are behind the products, designing them, manufacturing them, etc. Dealers need to know we’re here to stay and we’re a true company in America, not a fly-by-night operation. So we’ve been working very hard in communicating all this.”
New Products In The Works
Villegas says one way UM will further increase its brand awareness is by continuing to develop new product, including introducing three new ATV models this year.
“We plan on launching a 250cc, 400cc and 500cc,” he said. “And you’ll see the 400 and 500 in a 4×4 configuration. It’s important to continue to develop these products to expand our product line. We’re also working on 50cc and 90cc 4-stroke youth models. Once we increase our ATV lineup, we’re going to have 30 models in our entire lineup and it will be very strong.”
Villegas also hinted that the company is looking into development of a UTV sometime in the near future, along with a light sport touring motorcycle.
Perfecting Market Position
One of UM’s biggest challenges has been finding its niche in an already crowded industry. Although it’s still a learning process, Villegas says the company has positioned itself as a complementary lineup to the larger U.S. and Japanese OEMs, which means finding franchised dealers to take on their products.
“Roughly 80 percent of our dealers are franchise dealers,” he said. “For our specific marketing plan right now we’re focusing only on franchise dealers. They have an infrastructure built, they have service departments, they have parts people, they have customer service-oriented mentality and they have finance capabilities. Most important, they have a need for a more affordable product lineup in their showroom. They’re letting customers slip out the door because a Honda dealer has their cheapest 600cc bike at more than $8,000.
“I hate to call it gap filling, but that’s why we’re very successful in those dealerships. They’re looking for a product line up that’s not directly competing with those OEM lineups. However in some cases, we see that products like our dirt bikes, with all the features that they have and the price point, end up stealing sales from the Japanese products that are on that showroom floor.”
Maintaining Quality Control
A major obstacle UM says it has overcome is maintaining high-quality control with its suppliers in China, something the company prides itself on.
“Having quality control in China is absolutely critical,” Villegas said. “We have engineers in China and quality control staff. We purchase our components from the suppliers directly, and we specify the quality level that we require on each component. So that makes our quality better than anything that comes out of China.
“The Chinese motorcycle industry is very complex. There are 300 assembly factories. They buy from local suppliers with no quality standards and that’s 95 percent of the product you get from China. In this industry it’s very poor quality. They change suppliers frequently, they’ll get late on their payments with one supplier so they’ll change to another one. So we had to go into China and control that.”
Villegas also notes the company is strict when it comes to testing products before sending them to be launched in the U.S. All off-road vehicles are tested for a minimum of 250 hours, and street products are tested for 20,000 miles.
Big Changes, Big Goals
With a nearly new product lineup for 2007, UM is expecting solid numbers for the year, with sales goals near 10,000 units. The company is also planning on adding between 100-125 new dealers, which will double its current dealer network. In addition, the company hopes to increase parts and accessories sales nearly 50 percent compared to 2006.
“We have lofty goals for 2007, but it’s just the beginning for us,” Villegas said. “We’re very excited for what lies ahead not only this year, but far beyond.” psb