Subsidiary of Taiwanese OEM looks to nearly double network
KYMCO USA has had a great year so far. Scooter sales were strong in Q1, and ATV sales are up as well, but in addition to increasing sales, KYMCO would like to add to its dealer network to nearly double its current size.
“We’re right at 600 dealers right now, and we probably need to be right around 1,000-1,100 dealers to compare us to any of the other major OEs,” Bruce Ramsey, vice president of sales and operations told Powersports Business at KYMCO’s off-road media intro in Charlotte, N.C.
Despite mass attrition in the industry since the economy collapsed, KYMCO has maintained its dealer base, but the level is not where the company would like to see it.
“We’ve been able to stay pretty much steady, but we haven’t built our network; we haven’t reduced our network. We’ve added dealers as we’ve lost dealers and stayed pretty flat — which is good. But now it’s time to grow again,” Ramsey explained.
The goal is to improve the customer experience, while remaining cognizant of territories and not overlapping its dealers.
“The reality is I don’t want to have a consumer that has one of our bikes and has to drive 150 miles to a dealership,” Ramsey said. “I don’t want to crowd the dealers either. You’ve got to allow them to have their relevant market area and allow them to have the opportunity to be profitable and have a good, growing, thriving business as well.”
In the past year KYMCO USA has become a wholly-owned subsidiary of its parent company, and it has been bringing the brand into the U.S. for about a dozen years. The brand offers value-priced scooters, ATVs and side-by-sides, and Ramsey says its programs stand toe-to-toe with other OEMs.
“Our product is on-par with any of the OEs, fit and finish-wise, ability-wise,” he said. “We offer all of the same programs; we offer longer warranties; we have online warranty service. Everything that a major OE has, we have as a company, so once dealers are introduced to it, once they have that little bit of confidence in it, they do very well with the product.”
Many dealers succeed with KYMCO lines because in addition to lower MSRPs, the company also adds features and accessories to products to provide value. LE versions of the company’s ATVs come with a pre-installed winch, painted plastics, larger aluminum wheels, oversized tires, and for side-by-sides, soft enclosures and light bars.
“We’ve helped several, several dealers develop their business over the years. They wouldn’t have been able to expand without the KYCMO line because the margins have been strong enough for them and attractive to pave the way not only for them to succeed in single stores, but in some cases expand to multiple stores,” Ramsey said.
KYMCO also offers an extensive accessory line, a strong factory warranty, an extended warranty underwritten by CornerStone United and a partnership with GE Commercial Distribution Finance (CDF). The company is also developing workshop manuals through Cyclepedia, and streamlining its online parts lookup system, with a possible integration with a major DMS provider in the future.
“Everything that you could expect from another OE, we offer, but we still offer it at a little bit lower MSRP and a bit stronger margin for the dealers, so we allow the consumer to benefit from it, and we allow the dealer to benefit from it,” Ramsey said.
He admits that KYMCO still has a brand recognition issue, especially on the off-road side. However, the company is addressing branding. In the past year KYMCO has added a second truck to its touring schedule and has nearly doubled the number of events it attends.
“With two event vehicles going out, we’re diversifying into a lot more off-road events that we haven’t had a presence in in the past. I think that really helped build a brand for the off-road segment,” Ramsey said. “That’s still one of our biggest challenges — having people come into the dealership and not buy a KYMCO because it’s there, but to come in looking for KYMCO.”
In addition to its dealer network focus, KYMCO USA is planning to leverage its new partnership with its parent company in the coming years.
“We’ll be able to really look at ways we think we can save time and money for us and the dealers,” Ramsey explained.
Next up for models? Ramsey says dealers should expect to sit big things — literally — from KYMCO.
“This is the U.S. market, so ‘Bigger is better’ is the traditional philosophy here. You’ll be able to expect to see us bring in more larger displacement machines all around, in both the on-road segment and the off-road segment.”