August 13, 2007 – An emerging player
August 14, 2007
Filed under Features
by Steve Bauer
Even with revenue of more than $1 billion annually, Taiwan-based Sanyang Motorcycle (SYM) is one the powersports’ industries best-kept secrets in the United States.
But thanks to a recent partnership with Carter Brothers to use the go-cart manufacturer’s 1,200-plus dealers, SYM has big plans for the U.S. market in the next few years, with one of its biggest goals to surpass KYMCO’s sales and dealer numbers in the U.S. by 2010.
The sky’s the limit
Although a virtual unknown to most U.S. dealers and consumers, SYM is a major player overseas, with nearly a one-third share of the scooter market in its own country and a growing number exports across the globe, including a growing presence in Europe, particularly France, Italy and Germany.
“Not only does SYM own 30 percent of the scooter market share in Taiwan, we also export scooters to 66 countries, are partners with car manufacturer Hyundai to produce some of its vehicles and we also helped design and manufacture engines for BRP’s 250 and DS250 ATVs,” said Jim Hong, general manager for SYM’s overseas marketing division.
SYM’s motorcycle manufacturing plant, located in Hsinchu, Taiwan, is capable of producing 1 million units annually. It’s production capabilities like that, along with a strict quality control process and a R&D department focused on creating ATVs and scooters designed specifically for the U.S. market, that has SYM and Carter officials excited about the company’s entrance into the U.S. market.
In fact, SYM officials say the company’s long-term goal is to become a tier-one scooter manufacturer, alongside OEMs such as Honda.It’s an ambitious plan, but one they believe is achievable considering their production capabilities and high standards of quality.
“That’s what the goal is overall, and based on their production capacity, they can pretty much manufacture whatever they want,” said Pete McIntosh, marketing and sales coordinator for SYM-USA and Carter Brothers. “It’s going to take time to fine tune and get the exact fix for the North American market. We’re trying to work with SYM to come up with specific models for the U.S. And some of the Department of Transportation restrictions (in the U.S.) are a lot stricter than any other country in the world. As a result, when they’re producing new models, they’re setting up the tooling in the factory to specifically be designed so it complies with DOT regulations in the future. That way there will be a wider array of vehicles here available down the road. This will give us a more complete product lineup, which is the first step necessary in helping us achieve that tier-one goal.”
In the meantime, SYM and Carter Brothers have set a goal of 5 percent initial market share in the U.S. in the first three years, a more methodical approach they believe will prevent sales from spiking and then leveling off.
“What we’re doing is being selective on the dealers that we intend to use,” McIntosh said. “When KYMCO first set up 7-8 years ago, there wasn’t the amount of competition from Chinese brands there is now. It actually was the Carter dealers at the time who also became KYMCO reps. We’re taking a more gradual approach, but we should be able to double it within the next few years and be at the level KYMCO is at in terms of the number of U.S. dealers and sales in hopefully half the time they were able to do it.”
Completing its lineup
Although SYM already has a well-established line of scooters along with two ATV models, the company recognizes that to compete in the U.S. market, it will need a more complete lineup of both on- and off-road vehicles for dealers. To that end, the company’s partnership with Carter Brothers not only provides SYM with an established dealer network, but the alliance offers dealers an initial lineup of go-karts, scooters, ATVs and dune buggies.
SYM has several larger-displacement ATVs and scooters currently in development that are specifically designed for the U.S. market, which will expand its lineup even further. And the company is leaning heavily on Carter Brothers to ensure that their products are distributed to the proper dealerships.
“We believe very strongly in having varying degrees of dealerships,” McIntosh said. “Obviously there will just be our scooter shops that are going to focused solely on scooters. And then there are going to be the ones that have overlap into the ATVs and go-carts, as well as scooters. And what allows both types of vehicles to be sold together is because of the same engines being in the go-carts and the scooters. It just simplifies the parts for maintenance, etc., which is a huge convenience not only for the dealer, but for the consumer as well.
“I think the building blocks are in place that we can cover both the on and off-road segments of the U.S. market, especially when we get into larger-displacement engines. I think the production capacity is there, and with Carter’s dealer network, which is constantly being widened, there’s a possibility to achieve that goal in the future.”
One area that both SYM and Carter Brothers officials agree is vitally important is to target specific growth markets in the U.S., especially areas like universities, where there is a scooter friendly environment both in terms of consumer awareness of scooters and scooter-friendly laws and regulations.
“I think a lot of the environmental trends in the U.S. typically start at that level,” McIntosh said. “Right now the hot button issues that are favorable for scooters are fuel consumption, traffic congestion, dependency on foreign oil, etc. We’re focused in on specific parts of the country, and college campuses are just one of them. Those areas are your grass root efforts, where if you start in the schools, those are the people who will be you’re next group of consumers. At first it’s going to be for second vehicles, but a lot of people in metropolitan areas and densely populated segments like campuses will find that it’s a reliable source of transportation as opposed to being a novelty.”
Other potential markets that company officials believe will be great starting points for SYM’s scooters are nontraditional targets such as retirement communities and RV users, which target an older segment of the population.
“There are so many retirement communities out there that are scooter friendly, and we need to increase scooter awareness in those areas,” McIntosh said. “And the people who own RVs, we’re looking to target them as an alternative to having to pull a car behind them so they can travel once they get to their destination. We want to educate them that they can travel with a scooter and use that to get around a campsite without having to waste gas and time towing that second vehicle. And with the recent surge in toy haulers, we see that as a real growth area to be tapped into.
“We’ve got a full spectrum of new people who we plan to introduce into the scooter world, and with the wide range of products that we know SYM is currently researching and developing, we’re extremely excited about the growth potential in the U.S. market in the near future.”