A market readies for take off
March 31, 2008
Filed under Uncategorized
By Karin Gelschus
While there’s no crystal ball to be certain, early numbers show the scooter accessory market is growing and will continue to do so in the coming years.
Manufacturers have seen growth in both performance and appearance accessories. Mike Turber, director of sales and marketing for Tank Sports, says consumers being able to customize their scooters is a way for riders to make them their own, and it’s another area of profit for dealerships.
“We intend on attacking this market and offering very profitable products for our dealers,” Turber said. “With the market the way it is right now, many companies are looking toward new profit centers, and P&A is obviously the place to look as new unit sales are down across the board for most dealers.”
Tank Sports has offered a complete line of parts with limited focus on accessories since 2003, but that changed in 2006. Currently the company intends to expand its lines of P&A to include not only its own brands but also those of other manufacturers as well as the parts4motorsports.com Web site.
Martin Racing Parts, a scooter parts distributor, once sold scooters but switched to only parts for scooters, go-carts and small ATVs four years ago because the company sensed the demand. Mike Martin, vice president, says the company has been growing ever since.
“We saw that niche in the market and worked at it,” Martin said. “We’ve been doing better every year. We’ve developed a lot of new products.”
Tank Sports has also seen significant sales increases.
“Our P&A has increased 220 percent during the last year and 458 percent during the last two years,” Turber said. “The main change came when we took on the 5X5 brand of helmets and expanded our parts supply beyond our own brand by incorporating www.parts4motorsports.com into our overall marketing strategy.”
Dragon Custom, an aftermarket scooter company, saw an increase of 60 percent in February over the prior year period, says Jon Solo, president.
“Some of this is probably related to better marketing and awareness of our products,” Solo said, “but it still shows customers are wanting to spend money on accessories.”
Despite the increase in sales, Solo believes scooter dealers have not entirely figured out what motorcycle dealers already know: aftermarket parts can generate plenty of profit.
“I’m not sure scooter dealers have caught on to that concept yet (scooter accessory sales), so most of my sales have been directed to consumers,” he said, “and I’ve tried to share that with dealers, ‘You’re missing out on huge opportunities.’ The dealers who have done that have done well. It’s just that not a lot of scooter dealers have committed to that.”
Recognizing the growing demand for scooter accessories, George Simone, vice president of Schwinn Motor Scooters, says the company intends to start shipping its accessories some time in the second quarter, most likely in the beginning of April.
“[Dealers] really haven’t had a lot of accessories that are specifically designed for scooters. The consumer demand is there for that,” Simone said. “I always look at this category as a growth category; that’s why we chose to get into it. As more scooters are sold, so will the accessories.”
Simone adds Schwinn will actively market the accessories in addition to having them available on its Web site.
“We’ve included it in our consumer catalogue. We’ll start advertising in publications,” Simone said. “Once we get the product flowing in, we want to do a soft rollout, and once we get all the kinks worked out of the system, then we’ll make a big push (of the accessories).”
BEST SELLING ACCESSORIES
Solo of Dragon Custom says consumers want to start accessorizing with performance products like exhaust and air intake.
“It’s something that adds a nice look to the bike but also gets a performance gain at the same time,” he said. “At the next level, you will get people who will look into dressing up their scooter.”
Turber of Tank says after a while all the scooters start to look alike, and accessories are a good way to make them unique.
“People want to differentiate their scooter from the guy’s scooter down the street,” he said, “so they’ll put some chrome on it. They will put some blinking lights on or neon lights underneath.”
Currently, Turber says, scooter P&A accounts for 16 percent of total scooter sales for Tank Sports, with 25 percent of that being helmets. He adds the 5X5 line of scooter helmets is selling well.
“People are looking for lightweight, less bulky helmets, and 5X5 meets that need not to mention an affordable price,” he said.
Schwinn Motor Scooters offers locks, covers, cargo boxes and racks, but among those, Simone says the cargo boxes and scooter covers will be in high demand.
Matching the growth of the accessory segment, manufacturers plan to become more involved during the next few years.
Until the aftermarket segment is stronger, Diamo USA plans to participate in the segment through partnerships. Mathu Solo, president, says he doesn’t see the company being directly involved in the next year to two. For now, the company hired Dragon Custom to design and develop a scooter for Diamo USA from the ground up, which was displayed at Dealer Expo last month.
Tank Sports is looking into taking a similar route but plans to take on a bigger role during the next few years.
“Right now we are looking at a designer that’s going to be working with us for the next six months on coming out with a new design that will already come with all the aftermarket accessories you could put on a scooter as its own unit,” Turber said. “We are really excited about that project. That will be our flagship model.”
Mathu Solo said, “As scooter sales continue to increase, people will always look for ways to be individualistic and have some uniqueness to their bikes. I think there’s opportunity there for growth.”
Martin of Martin Racing Performance agrees sales will continue to grow.
“In 5-10 years from now a lot of the major urban areas are going to be close to what Europe is now,” he said.