One of the best parts of the Long Beach International Motorcycle Show is always running into good friends. Here are a few good buddies we saw last weekend at the show.
I always enjoy seeing friends at the Long Beach Moto Show. It’s the best part of the show for me.
Alta, a manufacturer of electric dirt bikes, very recently announced they are closing their doors. Here’s the article I read on it: Alta Motors Ceases Operations. This is interesting on several levels. Alta previously announced a strategic partnership with Harley-Davidson. I thought this would figure into Harley’s Livewire project and help both companies enormously, but I guess that isn’t the case. Last year, Alta lowered their prices substantially. I thought this would increase their sales, even though their prices were still high. Alta had the electric dirt bike niche all to themselves, and this niche seemed to be more suited to an electric motorcycle’s range limitations. Basically, motocross racing doesn’t require extended range, making Alta’s focus appear to be a well-thought-out strategy. And finally, Alta had sold a large number of bikes, and they had orders for several hundred more (see the link above).
I guess, in the final analysis, it all comes down to profitability and cash reserves, and if you don’t have enough of either, you can’t keep going. This makes Alta the second big US e-bike effort to flop (the first being the Brammo).
We are living in interesting times, and that is especially true with respect to the e-bike world. The e-bike industry is simultaneously emerging and going through a shakeout.
The CSC City Slicker, the newest player in this arena, is already playing a significant role. The three big things Slick has going for it are its price, its quality (it’s world-class; see our earlier blog posts) and CSC’s well-earned reputation for customer service. The biggest challenges for CSC and the City Slicker, I think, will be overcoming the US aversion to Chinese products, the ongoing uncertainties in the US/China trade relationship, and redefining customer expectations.
Overcoming US aversion to Chinese products is the least of these issues, and personally, I wouldn’t waste a single second attempting to do so. I think CSC and Zongshen put that issue to bed with the RX3 (it’s a world-class machine, with quality as good as or better than any motorcycle produced anywhere in the world). To be blunt, anybody still singing songs about Chinese slave labor and low Chinese quality is too stupid and too ignorant to waste time listening to. They won’t change their minds, so expending any effort attempting to convince them otherwise is an exercise in futility. Hey, there are still people who think the earth is flat and that we faked the moon landing. Best to forget about them, thank your lucky stars you aren’t that stupid, and move on.
I think the current uncertainties in the US/China trade relationship will sort themselves out within the next several months. I think the tariff issue will either go away or have relatively insignificant effects, and I think much of what is going on now is posturing and positioning for a serious set of negotiations between our leaders. Our trading relationship with China is, to borrow a phrase, too big to fail.
So we’re down to that last issue, redefining expectations, and that will be the biggest challenge for CSC and the electric motorcycle market. There’s no question that CSC has a pricing advantage that is insurmountable, and I think when CSC announced the City Slicker it set a new reality in the US e-bike industry. I think Alta realized that and that it might have played a role in their throwing in the towel. I have to think that the folks at Zero are similarly eyeing the situation and ingesting huge amounts of Pepto-Bismol (and that’s using as charitable a phrase as I can think of). You might argue that Alta and Zero have (or had) bigger motorcycles with different missions, but that would be as shortsighted and wrong as arguing that all Chinese goods are low quality or the earth is flat. Yes, Zero motorcycles are bigger and have more capability, but that’s the world as it exists this instant. The world does not stand still, my friends. Do you think, even for one second, that the City Slicker is the only sensibly-priced e-bike that will emerge from Chongqing? Do you think that future e-bikes from China will be small and have the same limitations as do today’s e-bikes? I have been to the mountain, folks. The answer is no.
But I digress: Back to this expectations thing. The City Slicker is not a bike that you can hop on and ride 2000 miles through Baja with a few stops for gas (or topping off the battery). The range is limited to something like 40 to 60 miles today, depending on how fast you want to go. The challenge here is to reach customers willing to use their City Slickers like their iPhones…something you plug in and top off whenever you have a chance. That’s a different market than folks who buy internal combustion bikes. But it’s potentially a huge market, as I saw firsthand in China where zillions of e-bikes were tethered to extension cords in front of every business on every city street. More on this expectations thing: CSC recently announced the price for a replacement Slick battery, and I think it’s about $1100. Some of the keyboard commandos were choking on that number. Hey, go price a replacement Zero battery. You could buy three brand new City Slickers for what a Zero battery costs. Like I said earlier, the challenge is going to be redefining expectations. Are we up for it and will CSC market the City Slicker (and the Chinese e-bikes that will inevitably follow) in a manner that emphasizes this new reality?
Time will tell, but I know where I’d put my money.
I guess I should start this piece by explaining I’m not even sure what the Clifton Club is. After spending several minutes on Google researching it, all I could find is that it’s either a wedding and Bar Mitzvah venue in Lakewood, Ohio, or a series of bling pieces from high-end watch maker Baume and Mercier. I’m going to go with Door No. 2 on this one. It’s the only explanation that makes sense in the context of what follows.
Let me back up a step. Yesterday I chauffeured the ladies to Fashion Island in Newport. It’s a very trendy shopping mall in a very trendy part of So Cal (think Neiman-Marcus, Nordstrom’s, French poodles, BMWs, and the like). For me, a visit to any shopping mall is torture, but it keeps me in good graces with the rest of the clan and builds up goodwill points for the next collectible firearm purchase, so it all works out.
Anyway, while the girls were shopping I wandered into a high-end watch store (think Rolex and armed guards) and I noticed, of all things, a motorcycle. A new Indian, to be precise, in the middle of the store. I’ve never ridden an Indian (new or vintage), but I always thought they were beautiful motorcycles (again, both new and vintage). I’m not a big cruiser guy, but if I was, I think I would buy an Indian. They are good-looking motorcycles, and my buddies Joe Gresh and Duane both hold them in high regard (and that’s a powerful endorsement).
While I was admiring the Indian, a sales guy approached me (my new good buddy Eduardo…Eduardo, I think, is a particularly elegant name). Eduardo saw my confusion (a motorcycle in a jewelry store?), and he explained that Indian had a marketing partnership with Baume and Mercier, a high-end Swiss watchmaker. It all centered on Burt Munro and his record-breaking land speed record activities. Indian. Baume and Mercier. Burt Munro. Ah, it all came together.
Do these marketing partnerships work? I suppose they do. More than 20 years ago, Ford teamed with Harley to offer a special limited edition F-150 pickup with Harley decals. As near as I could tell, the decals were the only thing special about that truck, and the only thing limiting the edition was how many they could sell. I had a lot of fun teasing a friend of mine who owned both a Harley Bad Boy (yep, they actually had a model with that name) and the limited edition truck. I drove a ginormous Tahoe and I rode a Suzuki TL1000 in those days. I told my friend I was going to put Suzuki decals on the Chevy and call it a TL-Ho. Good times.
Anyway, the Baume and Mercier watch I saw yesterday was cool (at $3900, it should be), and the Indian was beautiful. I hope the deal works out for Baume and Mercier, and for Indian. I pondered the Harley and Ford partnership mentioned above; I’m guessing nothing came of that, as the two companies seemed to have parted ways. Then I remembered that Bentley, the luxury British carmaker, has a partnership with Breitling (Breitling is another expensive Swiss watchmaker).
I wondered…what’s in it for the companies that strike up such partnerships, and what’s in it for their customers? I don’t think there’s any kind of pricing advantage or free gear package, so what would be the attraction? Is it simply living a branded lifestyle (you know, for insecure rich folks who need something more in their lives)? Or is it somehow making a statement about one’s wealth? Look at me! I drive a Bentley and wear a Breitling!
That got me to thinking…would a marketing partnership work for other brands, and in particular, would such a partnership work for less expensive motorcycles and watches? You know, look at me! I ride an RX3 and I wear a Timex!
What if you could sell a new motorcycle and give away a free watch with it? I’m thinking of China bikes, India bikes (not Indian Moto, but bikes actually made in India), and maybe Thai bikes. It might work if you included a free watch with each new motorcycle, and it would cost essentially nothing. I visited the Canton Fair in Guangzhou last year and I’m on their email list now, so I get all kinds of offers from Chinese manufacturers. You can buy new Chinese watches for $0.62 each (and if you’re thinking they are low quality, you need to think again and maybe research where what you’re currently wearing is actually manufactured).
The branding and theming opportunities might be fun. KLRs are made in Thailand…suppose you got a free milk-crate-themed watch to match your KLR’s topcase? The KTM 390 is made in India; perhaps you could include a Taj Mahal themed watch with each new 390 (isn’t that what the “TM” in KTM stands for, anyway?). Think of all the marques with models, engines, or major components manufactured in Thailand, India, and China…Hawk, SWM, CSC, Royal Enfield, BMW, Harley-Davidson, Triumph, Honda, and more. You can see the possibilities.
Our good buddy Dan from Colorado (the other Dan from Colorado; we know two of them) sent an email to me last night with a link to a very cool blog (the Maple Fiesta) about five guys who all bought new TT250s when they were first offered by CSC. They had a plan…they all bought the bikes to ride the Continental Divide Trail from Mexico to Canada.
Yeah, they had a few problems, but that’s what adventure riding is all about. They fixed the problems and trucked on, and they all made it. It’s a hell of story and it’s worth a read!
This is an interesting video about used bikes under $2,000 that might make for good winter project bikes, and the guy who created it was so taken with the idea of a new CSC bike for under $2,0000 that he included a segment on CSC. CSC is one of our advertisers and both of your blogmeisters (that would be Arjiu and Dajiu) put big miles on the RX3 on rides in China and the US. It’s a good video…our compliments to the guy who put it together. Enjoy!