"Dealer XPO" 2010

[Ike]

Well, John (banned for life), Tab, Jeff, JD, Ped58 and me, will be heading out to the Dealer XPO tomorrow morning.

It won`t be quite the same without Tomos being there this year. There was never much moped action there anyway. Tomos was usually the only moped MFGR. there. I don`t know if this is the final nail in the coffin for mopeds in the US or not. But bike sales are down across the board, not just at Tomos.

I hope this is just a bump in the road and not the end. Hopefully Tomos will bounce back and come out with a new and exciting moped and I can be the first dealer to get a new "Hausenfeffer" after all. And, I will miss, MISS TOMOS USA most of all, lol

Whatever, its alway a great time and I am looking forward to hanging out with some of the old gang for a while anyway.

Ike

[Ralph C Barger]

Ike, I agree with you about Tomos. I would hate to see them pull out of
the US. Granted the compitition across the board is stiff but they make
a great bike.
Check out the IceBear line and give us your opinion. Bryan and I both have one and while I like my Ruckus clone there are too many cheap short cuts in the manufacturing and it seems that we all have had problems with the differentials. I really like the trike concept but dont think
I woulld buy another IceBear.
Have a safe trip. wish we could have made it this year.

[Ike]

Well, the Dealer XPO for 2010 is history. One thing that we all noticed immediately was the fact that the show was down on both exhibitors and dealer/customers. In years past we could barely get down the isles. This year was no problem. In fact we saw all we wanted in one day and came home on Sunday. None of us brought any bikes or Generators home this year, but we did run onto a fantastic deal on motorcycle helmets. We all ended up buying new full face helmets for $10.00 ea. !! No they are not Shoei or Arai but they are DOT and Snell approved.

Tomos USA was not at the show along with many other regular attending companies. But, we did run into Doug Joseph and had a long conversation with him about the future of mopeds at Tomos USA. And I am happy to say that the news was not all that bad. He told us the the warehouse was pretty well stocked up on mopeds right now and there would be more coming soon.
He said there would not be any new models anytime soon, but there would be some new colors and some new graphics coming.

So maybe, the future of Tomos and mopeds in the US is a little brighter than we think ? I hope so !

Ike

[Ralph C Barger]

Thanks so much, Ike, for this report. It is good to know that Tomos is not
pulling out from this country. With money so tight and an ongoing 'recession' happening in this country it would take a major rise
in fuel costs to generate the interest needed to produce decent sales
figures. Scooters and motorcycles here are entertainment transportations
not necessary means of transportation as they are in other countries.

[moebobbie]

Thanks for the update Ike. That is really good news if you trust Doug Joseph. I really wouldn't expect him to say anything else but you guys know him much better then I do so i truly hope it's on the level.
thanks,
Moe

[JD]

What concerned me about talking to Doug is that he said that the 2010 models are coming in and they're essentially identical to the 2009 versions. I don't believe in change for the sake of change, but the market is rapidly moving away from these guys and I don't see much in the way of a coordinated response. The scooters they introduced aren't selling very well, presumably because they're overpriced compared to other bikes of similar features and quality, and they only make distribution profits on those anyway, since they're produced by someone else. For Tomos to last in this country, they've got to shore up their moped line. The average kid looking to buy a moped or scooter is looking for something new and flashy, and a Tomos ST hardly falls into that category. The thing has barely changed at all in the past 15 years, has it? They've played with the name a couple of times, upgraded the engine, and modernized the buttons and controls a bit. Oh, yes, and they finally improved the seat, and messed around with the decals from time-to time. But that's not enough if they want to appeal to the iPod-toting, Blackberry-tapping, trend-conscious consumer. And they STILL haven't fixed that stupid leaky transmission seal. Believe me, these kids are sufficiently bothered by having to mix the gas and oil together. Regular cleaning of the rear wheel rim is definitely not cool.

Unfortunately, the company still seems to operate like the Slovenian socialist enterprise they started as, and haven't really gotten the hang of competitive capitalism. Even the Communist Chinese seem to be picking up on the importance of marketing and image faster than Tomos.

Needless to say, I love my little Tomos and will ride it until it one of us collapses of old age. I fear, however, that both of us will outlast Tomos in the marketplace.

jd

[pehuskey]

What gets me about Tomos is that they don't get their best products to America. I know they are really limited because of the DOT and EPA restrictions. They can't just sell their manual models, but it seems like they could get some conversion kits in. Car manufactures find a way to import stuff in parts and assemble it. The low weight of the ST with 70cc kit and 3 or 4 speed manual would be adequate transportation. The added top end and better hill climbing ability it would really expand the usability.

I also never understood why they don't distribute performance parts themselves. They could have bought the kits from AirSal or BiTurbo and distributed, taken their markup and streamlined the process to make their product more useful for consumers in this market.

It doesn't really matter what they do. Americans aren't that interested in small displacement anything. Short of massive fuel shortages like the embargoes of the 70s it isn't going to matter. Mopeds are a tiny niche market of toys. Even if a huge surge happens for needed fuel efficiency, the majority of that need will be filled by Chinese crapbox scooters.

[Ralph C Barger]

JD and Pehusky; You both make exellent points. Obviously Tomos needs
to study marketing concepts. The Chinese certainly have and now dominate the scooter/moped market.
Actually what is in a name? Moped is now applied to true mopeds and
indicriminately to any size of scooter from 250 down to 50cc's.
What Tomos is making now does not, as you both have said, appeal
to the American buyer.

[JD]

IMHO, Tomos needs to exploit their strengths and get rid of the dead weight. They're operating in a "no man's land" in the market.

Beneath them, they've got cheap Chinese scooters. Forget about competing with them. They're too inexpensive, and a Sprint looks like a toy compared to them...while costing more and requiring you mess around with mixing gas, hand signals, and a kickstart. That's archaic in 2010!

At the other end, you've got the quality scooters from Honda, Yamaha, Kymco, et al. They start at around $2,000 and have consumer-friendly features. Where's the Tomos model to compete with those? Ain't none.

I'm no marketing genius, but I'll tell you what I'd do: I'd take the best product in the line-up, the Streetmate, and expand it into at least a couple more price points. Create a cheaper version by eliminating, say, some of the gingerbread, and replacing the disc brakes with drums, and try to get the price a little closer to the Chinese stuff. But it needs to be better, not worse, in features.

Then, I'd take the Streetmate upscale and produce a premium model that can take on the Japanese and Taiwanese scooters without flinching. It would require competitive features, and maybe even a true CVT transmission on the A55 engine (if that's possible.)

The Streetmate would be the sole product in the scooter segment that looks and rides like a motorcycle (let's forget that it's a moped, which has more negative than positive connotation these days.). It rides better, handles better, and is much more fun to ride than a scooter. But its current position paints it as a poor relative of a scooter, and it doesn't need to be.

Consider the Honda Metropolitan: 49cc for $2049. A spruced up Streetmate that matches the Metro point-for-point could be a serious competitor at that price point. But Tomos needs to get out of the "moped" mindset. They're competing against scooters now, and they're in a unique position to play in that market with a motorcycle-like product that outperforms the competition in many important ways.

Ah, well you get the idea....

[Ralph C Barger]

JD, Well thought out and said. I could not agree with you more. I think that Tomos makes quality products and their scooters, Chinese built, seem to be of better quality than most Chinese scooters and that is because Tomos demands the quality. Your ideas for the Streemate would make it a hot competitor with the Chinese stuff and not out of line cost
wise.
Will Tomos makes these changes? Only time or a declining market world
wide will tell.

[Ike]

Here is what I think has happened.

Say you own or manage a company that has only two products. One of your products has stiff competition on every front. there are hundreds if not thousands of companies selling the exact same product only cheaper!

But, your other product you have a monopoly on! No other company has that product. You have been selling this product for over 50 years and you have every part for that product. Why would you put that product on the back burner and push the other one ?? I have no degree in marketing or business administration. But it seems to me that this is what happened at Tomos.

I am sure the company management had the companies best interest in mind when this decision was made. And I can understand why they would want to get into something new, but don`t bite the hand that feeds you.

But then again, maybe your old original product is selling so poorly that you were forced to try something new. Problem is, the new product is nothing new and the market is already saturated .

Now, if I was running Tomos USA, I would try to bow out of the Scooter business as gracefully as possible and try to revive the moped business. But how do you do that? I don`t think making them fancier and adding more bells and whistles is the answer. They are already too expensive . You have to keep in mind that mopeds are toy motorcycles for kids to play with. I say do whatever it takes to make them cheaper. Tomos can not afford to tool up for new models every year or even every ten years. The market for two thousand dollar mopeds is just not there. New paint and decals every year or two would help make you think you are getting something new without driving the cost up. Again, a moped is a toy motorcycle, not a Harley or a Goldwing. In my opinion the Streetmate is way too fancy. If you have to have a smoothe comfy ride, buy a motorcycle and let the kids have their cheap mopeds. If I was running Tomos I would quit making Streetmates , Revivals and LX`S. and make only Sprints and ST`s, because thats what a moped is, a cheap little bike with a motor for kids. If you want more speed , more comfort and more cost, then you want a motorcycle not a moped! Don`t take the moped so serious. It is not a motorcycle, for the last time it`s a TOY!

Again, make mopeds cheap as possible, even if you have to have them built in China, don`t take them serious, don`t confuse them with motorcycles, and if ya try to ride one to Florida and it blows up on the way, don`t come cryin to me, I told ya it was a moped , not a Scooter or a motorcycle.

Ike

[Ralph C Barger]

[JD]

Ralph,

I don't know about Tomos' worldwide markets, but they sell a helluva lot of bikes in the Netherlands. They're all over Amsterdam. But that's a city that has more bicycles than cars, and has bike/moped lanes everywhere. Mopeds work in a compact, urban environment like that.

Ike, I know you’ve always maintained that a moped is a “toy,” and I agree that it is for much of their customer base in the U.S. The problem is that the motorized toy market is under serious attack by the Chinese scooters. Why would anyone pay $1,000 for a barebones Sprint when he can get a much better-equipped, faster, and slicker Chinese scooter for $700? The people who frequent this website understand the problems inherent in those cheap scooters, but most buyers don’t. The Sprint doesn’t stand a chance with the average toy buyer. Maybe your idea to have it made in China might work if they could knock $300-400 off the price that way.

It’s still a dead-end street, though. It doesn’t matter that Tomos has been making mopeds for 50 years. The market is changing.

There’s a much larger market opportunity at the $2,000 price point, and it’s currently populated by nothing but scooters. These are customers who live in college towns or compact, southern cities and who want something reliable and serviceable for regular transportation. (I’ve been in a lot of college towns lately, school shopping with my daughter, and I see lots and lots of scooters, not mopeds.) It’s not, and never will be, huge volume, but it’s a relatively stable market compared to motorized toys.

I agree that Tomos made a mistake by going after this market the way they are. They’re trying to sell a product that has no significant advantages over the existing products and they’re not marketing it very well, either. And I agree that they should probably ease out of it.

But where they COULD have a significant competitive advantage in the $2,000 market is with a proven product that really is DIFFERENT from all the scooters, and BETTER in most performance characteristics. They could take an existing product (probably the Streetmate) and stop positioning it as a moped, because it is, indeed, too expensive to operate in the “toy” market. But it would make a competitive scooter fighter, because neither Yamaha or Honda or any of the others have anything like it, at least not in this country. I doubt, however, that many scooter shoppers consider the Streetmate seriously (or even know about it, for that matter.) That could change with the right marketing and positioning.

Bottom line: Go after where the clients are, not where they were. Just ask Howard Johnson’s or Studebaker.

jd

[Ralph C Barger]

JD: An expert and insightfdul analysis. You are tight, I think we are overlooking the fact that it is a changing market and your comment about
going to the market is a keeper. I am going to have that one here at my desk because it applies to any business.

[Ike]

I have had a new Tomos 150cc Scooter on the floor for a year now. In a year I have had only two customers take it for a test ride. It is still sitting there.
I did sell a few $2,000.00 mopeds in the last year. I can sell the Scooter for hundreds less than $2,000.00, but it is still sitting there. Why is that ???

Ike