High Gas Prices May Drive Scooter Purchases, but...

If gas prices stay high, we may experience another scooter buying frenzy like we did in 2008, although the economy may temper the hysteria a bit. TV news crews, local reporters and radio hosts may swarm local dealers for a few sound bites about exceptional gas mileage (100mpg?!?) but once they close their reporter notebooks and pack up the lighting rigs, they will likely have overlooked the total picture of the costs of buying a scooter.

I touched on this in blog posts that I wrote in 2008:
Is Money the Only Reason to Ride a Scooter
$4 Gas is Waking Up America

Truthfully, $4 gas prices suck, but only someone who already owns a scooter will be laughing as s/he passes up the pump. If you park your Prius, but a brand new Vespa and expect to see the money pile up in your bank account, you will be in for a surprise. If you drive an old V8 truck from the 70s 20 miles roundtrip to work each day, and decided to dig your old P200 out of the garage, give it a tune-up and do the commute on the scoot while parking the truck, you're in for a pleasant surprise. Most people are somewhere in between and will need to really crunch the numbers to see if buying a new scooter makes financial sense.

There are lots of other considerations: insurance, scooter maintenance, and how often one will actually forgo the car for the scooter.

Costs to conisder:

• Purchase price
• Interest if financing the purchase
• Scheduled maintenance (differs from cars)
• Wear & Tear (some scooters require new tires every 2K miles)
• Insurance (make sure your policy includes uninsured motorist)
• Riding gear (clothing, helmet, gloves, rain gear etc)
• Security (locks, parking)
• Oil (if you are running a 2-stroke, you have to account for the cost of 2T oil)

I realize that I may sound like a negative nan, raining on the "higher gas = buy a scooter" parade, but I want to get above the rote sound bites that the media may be offering now.  Scooters are seriously great fun to ride, but I consider the fuel economy to be a bonus. Already having a scooter (65mpg) in my garage that I bought 14 years ago makes the gas savings apparent when I choose it over my Mini (39mpg), but if I went out today and bought a new $3k scooter, I think it would take me a few years to realize savings.

Benefits above $$ to consider:

• Riding a scooter is fun!
• Better parking (scooters fit in smaller places; I park closer to my destination with a scooter)
• Taking up less space than a car (on the road, in the garage, in my life)
• Splitting lanes in California *only* (I like being able to move to the front of a long line of cars at a stoplight. I don't splits lanes when traffic is moving)

Whatever the gas pump says, it's a good time to scoot.

Blog entry soundtrack:

Andrettis Sue Power Sports Factory

Fallout from the troubled Power Sports Factory shutdown of last year. PSF sold scooters under the Andretti brand.

Famed racers Mario, John and Jeff Andretti and the company they formed as a vehicle for endorsements are suing Power Sports Factory and its former CEO and president, claiming the company hasn’t paid them for their endorsements of Chinese Benelli and Yamati motorcycles and scooters.
The complaint, filed in the Philadelphia Court of Common Pleas, alleges breach of two contracts, fraud, fraudulent inducement and violation of the Andrettis’ right to publicity – the unlawful use of their names and likenesses – against Pennsauken, N.J.-based Power Sports Factory, CEO Shawn Landgraf and president Steve Rubakh.

Read the complete story at DealerNews.

Piaggo Cuts Management Positions

Dealer News ran a news item about Piaggio cutting management positions:

Reduced unit sales of scooters in 2009 forced Piaggio USA to cut several top level managers in its sales operation and flatten out its sales staff, says Paolo Timoni, president and CEO of Piaggio’s US operations.
Noting that industry-wide U.S. scooter sales were down about 65 percent last year, Timoni says that steps had to be taken to balance revenue and costs. “We don’t expect 2010 sales to go back to 2008 numbers,” he says. So, it was cut either sales or dealer services.
“Given our priorities for 2010 and 2011,” Timoni says, “ we concluded it was a priority for us to maintain our service capabilities (to dealers) as much as possible, because we think this is what dealers need. Probably, we could get with a smaller sales organization, since there wouldn’t be that much sales, right? Therefore, we basically reduced the size of our sales organization.”

The position of vice president of sales and marketing has been eliminated and the former head of sales and marketing, Gary Pietruszewski, has been let go. The marketing management functions now will be handled by three managers, who report to Timoni. “It’s a much flatter management structure,” he says.

Melissa MacCall is responsible for marketing, Internet activities, promotions and co-marketing activities. Karen Andrews is brand manager for Piaggio and Vespa, and Rick Panettieri is brand manager for Aprilia and Moto Guzzi.
At the same, the number of regional sales directors was cut from three to two, and three regional sales directors were dropped, reducing the number of sales directors from 10 to seven.

“We have great opportunity here,” says Timoni. “You notice we didn’t touch our service organization. We thought that would be the best investment we could make now, and we hope dealers appreciate that basically all the infrastructure and organization to support and service them has been untouched. That’s our strategy.”
No other changes are planned for the time being. “That’s all there is,” says Timoni.

The motorsports industry is hurting like so many other industries, and Piaggio products are higher on the price spectrum. It seems unlikely that the slump will turn around soon.

Goodbye Vectrix, we hardly knew ye...

When Vectrix first debuted in the US, Scoot! got to test-ride one of the models. Mike picked it up in San Francisco (where he lives) and Josh went up to get it and bring it back so that both he and I could ride it. Unfortunately, because SF is about 45 miles north, the Vectrix wouldn't have been able to make it back on the freeway on one charge. Strike one for the electro-maxi scooter. Sure it was heavy, yes it needed better range, by golly it was expensive. But it was kinda cool and I was very hopeful that they could make a go of it, especially when all of the other electric scooters that we saw maxed out at 28mph and were just cheap Chinese crud.

The Vectrix had some hurdles which it couldn't quite overcome and now DealerNews reports that the company is filing for bankruptcy. In this economy, who isn't feeling a pinch? But Vectrix was price-point challenged with the highest price scooter available (you could buy a Hyundai for less) and it had a product that wasn't essential to the American lifestyle (as is a car). Most Americans see scooters as a second vehicle, for fun jaunts. $10K is a little dear for such a non-essential item, especially when it was limited in rage. If you run out of gas in a combustion engine, you just gas-n-go, but the Vectrix needed about 2 hours of charging to gain any useful range.

Another thing that Vectrix lacked was a large base of early adopters. For some technology items, a loyal group of buyers comes forth and will pay the high price to get the newest technology first. Remember $600 iPhones? But wealthy environmentalists like Leonardo DiCaprio were few and far in between. Many folks probably felt like I did: it was a cool idea, but I would rather wait for a less expensive version with greater range. Unfortunately, Vectrix needed to sell lots more of those initial versions to keep the company going, through revenue and continued investment.

I was hopeful, but when the entire world seems to be in a economic meltdown, there just isn't any room or time to invest in dreams. It's really to bad.

UPDATE: Mike from NOHO on NPR

Here is link to where you can hear the interview with Mike Frankovich from Noho scooters on NPR last week.

MSN Article Shows Complexity of Scooter Choice

I love scooters. I'm glad to see more people getting into the scooter frame of mind, but I often meet folks that just haven't thought it through all the way. I'm not one to dissuade a person form becoming a scooterist, but I think that if someone does he research and invests some time into the purchase s/he will end up with a better fitting scooter that will be with him/her for quite some time.

So I was pleased to see this story on MSN where new scooterist Tracy Harger put in some investigative work before buying a scooter. I'd suggest that those wanting to buy a scooter read and use it as inspiration for their scooter hunt. Scooters are a great way to get around town using minimal gas, but if you buy a new scooter it can take a while to see the savings if you are paying off a new scooter. So I say look at it from several points of view. Back in June, I ran a post which had some of my top reasons to ride a scooter. Fuel-efficiency was only one of them. I also posted some tips on buying a new scooter. If you are a new viewer of this blog, sgo back a few months and you'll find various postings that may help you with your new hobby/lifestyle. Also, feel free to send me an email if you would like.
Happy Scooting!