FOCUS – KYMCO Scooters Find Success in U.S.
November 17, 2004
Filed under Features
KAOHSIUNG, TAIWAN— Approximately 22.75 million people live in Taiwan. Last year, a Taiwanese government agency reported that one out of every two of the island nation’s citizens owned a motorized two-wheeler.
Kwang Yang Motor Co. Ltd., fellow Taiwanese manufacturer Sang Yang Motor (SYM), and Japan-based Yamaha Motor Co. are the three leading scooter suppliers in Taiwan. Kwang Yang claims to lead the nation’s scooter sales with a 33.9% share of the market, compared to SYM’s 31.1% and Yamaha’s 28.9%.
Powersports Business visited KYMCO’s headquarters here in Taiwan, met with the president and management team, and toured the production and research and development facilities.
Kwang Yang began its operations in 1963 as a decade-long supplier to Japan’s Honda Motor Co. The company built its 500,000th two-wheeler in 1978; built two million accumulated units in 1988; began the KYMCO brand for international business in 1992; and reached six million accumulated units in 1998. Last year, KYMCO produced 410,000 scooters, small displacement motorcycles and ATVs. Full-year 2003 revenues were $522 million.
KYMCO’s product line currently consists of eight engines, two-dozen scooter models, five ATVs and six small-displacement motorcycles. For 2004, KYMCO leaders project to produce 417,000 powersports vehicles, with 234,000 going to the domestic market and 183,000 units for export. The privately owned company employs 2,285 full-time workers, and does business in 64 countries.
Kwang Yang’s eight facilities in Taiwan cover 165,000 sq. meters. While the company can produce all of its products solely from its Taiwan-based factories, it also sources from five other facilities — four in China and one in Indonesia — operated as joint ventures, and plans expansion into Vietnam and India in 2005. Six percent of KYMCO’s revenue goes towards research and development.
Kwang Yang President Son-Chien Wang said he wants to see the company move from being known as a scooter manufacturer to one known for a wide array of powersports product.
“Our R&D team is planning larger motorcycles, but the expansion of our scooter offerings will continue first since Europe, our strongest market, must be satisfied first,” Wang told Powersports Business. Wang flexed Kwang Yang financial muscle when asked about the company’s future. At the time, Powersports Business, acting on rumor, asked Wang whether he would be interested in purchasing Aprilia. “I believe the purchase of a manufacturer like Aprilia would be beneficial to KYMCO, offering engineering of product not yet a part of KYMCO’s offerings,” Wang said. “It would be a logical step in the progression of our business.”
STR, Inc. Motorsports Division, Inman, S.C., has been the exclusive importer and distributor of KYMCO product since Kwang Yang’s entry into the United States in 2001. Now doing business as KYMCO USA, the company services approximately 450 dealer locations with a total of 10 scooters, five ATVs and one 250cc motorcycle. Bruce Ramsey, KYMCO USA’s director of sales and marketing, says the company sold 5,533 scooters in 2003.
“I’ll top that this year, but not by a lot,” Ramsey said. “The feedback I’m getting from the field is that the low price stuff from places like the big box stores are really impacting sales of quality product.”
All KYMCO scooter models are backed by a two-year warranty and, in July, KYMCO USA entered a private-label financing program.
The offering by Sparta Commercial Services, New York, will enable dealers to visit KYMCO USA’s company Web site to submit credit applications online; receive quick credit decision responses; offer a choice between leasing and an installment loan with terms up to five years; and complete the transaction with consumer contracts that can be downloaded, printed and signed by the customer. Plus, dealers also have the benefit of an on-going record of all transactions, as well as detailed customer history that can be reviewed at any time.
For 2004, KYMCO USA expanded its scooter lineup to 11 models with the addition of the air-cooled Vitality 50, the big-wheel People 250, and the Grand Vista 250.
Available in red or blue, the Vitality 50 (MSRP $2,099) features a two-stroke, air-cooled 49cc engine; steel chassis; telescopic forks and mono shock rear suspension; disc front and drum rear brakes; an analog speedometer, odometer, fuel gauge and low oil indicator light; and a digital clock and single-helmet under seat storage.
The 18 hp People 250 ($3,999) has a four-stroke water-cooled 249cc engine; Telescopic forks and dual shock absorbers’ twin-disc brakes; an analog speedometer, odometer, fuel gauge and low oil indicator light; a built-in rear luggage rack; and a digital clock and single-helmet under seat storage. It comes in gray or wine.
Finally, the Grand Vista 250 ($4,399) features a four-stroke water-cooled 249cc engine; telescopic forks and adjustable hydraulic shock absorbers; single disc brakes with dual piston calipers and stainless steel lines front and rear; a stepped seat; a digital speedometer, odometer, tachometer, fuel gauge, temp gauge and clock; electronically retractable mirrors; a cell phone holder with 12V DC adapter; and under seat storage large enough for two helmets. It comes in white or blue.
Despite its two largest scooters sporting displacements of 250cc, next year the company plans to jump into the maxi scooter market with the release a 500cc scoot it calls the Xciting 500.
Like the Grand Vista 250, the Xciting 500 comes with telescopic forks and adjustable hydraulic shock absorbers and a stepped seat. However, outfitted with a liquid-cooled DOHC 498cc motor, the bike comes with triple disc brakes.
The Xciting 500 tested by Powersports Business had an analog dash instead of the digital display on the GrandVista 250. Also gone were the electronically adjustable mirrors; and underseat storage was reduced due to the larger powerplant.
As for the future, Ramsey said plans call for a 700cc maxi scoot and a revision of the company’s 50cc and 150cc line-up.
“We know the U.S. is the most explored market, and KYMCO and STR have formed a cooperative goal to expand our operations in the U.S. in the future,” said KYMCO President Wang.