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Feb. 9, 2009 – What to expect from the scooter market

February 11, 2009
Filed under Features

By Mike Davin
Contributing writer
Scooter retail sales in the United States were up 41.5 percent in 2008 compared to the prior, and scooter OEMs and dealers are hoping to sustain that positive trend by being prepared with adequate inventory, emphasizing value and putting the vehicles in front of as many people as possible.
Executives said that by doing those things, the industry can see growth again this year, although at a more moderate rate than 2008.

AVOIDING INVENTORY WOES
Running out of inventory was a common problem last year, and dealers like Advantage PowerSports of Kansas City are trying to prevent that from happening again. Adam Smith, with the dealership’s sales department, says he sold out of scooters twice last year, so he ordered significantly more product to avoid shortages in 2009.
“I already have them in stock, and I have financing available,” he said.
Mathu Solo, CEO of LS Motorsports, is telling his dealers to be ready as well.
“What we’re trying to tell our dealers is don’t get caught unprepared,” he said.
Toby Depew, who sells scooters at Hahm Motorsports in Anaheim, Calif., says he thinks last year it was the industry that was unprepared. In 2009, he is confident OEMs will be better able to respond to demand, eliminating some of the problems dealers had getting product last summer.

APPEALING TO CUSTOMERS
Part of the optimism around scooters’ prospects in 2009 comes from the product’s relatively small price and fuel efficiency, which will remain attractive despite fallen gas prices.
“We fare well in the two-wheel segment because people equate scooters with savings,” said Philip McCaleb, president of Genuine Scooter. “Motorcycles don’t get that.”
In a down economy, he and others in the industry are betting people won’t see scooters as a plaything they can’t afford, but as a cheap transportation alternative they can’t afford to pass up.
McCaleb says scooters are one of the few vehicles that get a look from the Prius driver or the owner of another high-mileage car who is interested in a second mode of transportation.
At Yamaha, Media Relations Manager Kevin Foley notes all of the company’s print, online and point-of-purchase advertising materials include miles per gallon figures, and with scooters that can achieve around 100 mpg, those numbers are impressive to customers who are looking to save on gas or for a green transportation alternative.
In addition, many in the industry emphasize that gas prices are unlikely to remain at their current levels, and as this summer showed, increases in the cost of fuel can drive scooter sales. Bob Hedstrom, founder of Scooterville in Minneapolis, says scooter prices don’t need to hit $4 a gallon again. In his opinion, even $3 would produce the same effect now that people have started to take scooters seriously.
According to McCaleb, scooters have undergone a continued transformation from cool toy to practical transport, and Hedstrom says his sales pitch is heavily geared toward a “transport not toy” presentation. Driven by gas prices, he says, attitudes about scooters started to change this summer, and Scooterville will continue to push toward a European model where scooters are accepted as an economical means of transportation.
“As they get more out there, and more people’s friends own them, it becomes more viable and palatable to the mass consumer,” said Hedstrom.
Brian Kent, who has worked in sales at Greater Boston Motorsports for 20 years, echoed that sentiment.
“The general public has learned to accept them more,” he said. “We’re catching up with the rest of the world.”
Kent also notes that buying a scooter doesn’t represent a huge initial investment.
“You can get one for starting at a little over $1,000,” he said. “You can’t do that with a street legal motorcycle.”

ON PEOPLE’S MINDS
To market scooters and sustain the interest that peaked during the summer, a number of dealerships are trying to keep the vehicles visible.
Smith of Advantage PowerSports says scooters are the first thing customers see when they enter his business.
“I’ve got them set up so they’re right there when you walk in,” he said.
Christine Torreyson, promotions manager for Fred Cummings Motorsports in Bakersfield, Calif., says her scooter marketing efforts mainly involve getting scooters out where people can see them.
“Most of the scooter marketing I do is in the community-type events, at colleges and things like that, just to get scooters in front of people,” she said.
Torreyson says that just by seeing them, a lot of people have positive reactions and associate scooters with trips abroad.
“They say, ‘Oh, I remember when I was in Europe this summer, these were all over.’”
Hedstrom of Scooterville says his recent promotions have leaned “toward guerrilla marketing.”
That type of marketing, he says, involves locating the customer and marketing directly. One recent success involved getting a scooter in the garage of an eco-friendly model home on display at Minnesota’s Mall of America, where it was available for people to see throughout the holidays.
According to Depew of Hahm Motorsports, because of all the advantages associated with scooters, “they really sell themselves.”

FUTURE GROWTH
Foley from Yamaha predicts good things for scooters going forward.
“The scooter business is still very good news,” he said. “We foresee continued demand and have added two new models.”
Solo of LS Motorsports also thinks the scooter trend remains a positive one and is cautiously optimistic about 2009. He admits this year could be unpredictable given the state of the economy and the credit market, but he still expects a solid performance.
“We’re planning as far as our inventory to see growth,” he said. “But we’re not going to overstock based on trends seen last year. If we see double-digit growth, that will be great.”
Likewise, McCaleb says Genuine Scooter is being more cautious than last year. But he still feels positive for both powersports and scooter-only dealers, noting that although no one is comfortable with uncertainty, he thinks strong dealers are still very confident.
“We expect to see 10-15 percent growth from where we were last year,” he said. “Volumes are down, but scooters haven’t taken the hit that motorcycles have.”
Darrin Gitlitz, the dealer principal at New York Honda/Yamaha in Long Island City, N.Y., puts his thoughts about re-creating the unprecedented sales of 2008 succinctly.
“The scooter business will continue to grow, and I see this year as being up quite a bit over 2007, but 2008 might have been an anomaly,” he said.
At Scooterville, they’re prepared to expend a little extra effort for success this year.
“Last year was like shooting fish in a barrel,” said Hedstrom. “This year we will have to work harder and do more follow up.”

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