MCE Scooter Insurance helps Kymco grow

MCE Scooter Insurance helps Kymco grow

Kymco sales are up 23 per cent in a market that is down by 20 per cent. Kymco is growing at a faster rate than BMW.

MCE, the leading provider of scooter insurance has been working hard to provide the cheapest motorcycle insurance for Kymco.

The plan is to develop new concessions with two and four-wheel brands that complement Kymco. No details can be announced yet." So says Ian Kidson, MD at Masco, the man who has overseen significant market growth with Kymco in the UK.

What has he got up his sleeve? He won't say, and you wouldn't expect him to. But success breeds success and there is an air of confidence emanating from Masco headquarters in Shrewsbury, Shropshire. It's a confidence borne of results from this concessionaire.

"For the year to date [May], Kymco is now fifth in the UK for mopeds, overtaking Sym," says Kidson. "This is 27 per cent up on registrations for the same time in 2009. In the overall UK market Kymco is in 14th place, one above Peugeot. Kymco's machines are all in the lower capacity sector of the market [up to 125cc] so figures cannot be compared like for like with larger capacity brands.

"Overall sales - 23 per cent up on this time last year in a market that is down by 20 per cent - means that Kymco is growing at a faster rate than BMW which announced 16 per cent growth in May. In terms of market share Kymco has 5.8 per cent of the moped market and 1.4 per cent of the total market. Kymco is the leading Taiwanese scooter brand in the UK."

These advances have been made with an inventory of up-to-125cc machines only. So it really is a valiant achievement. The range was increased from 20 models last year to 24 for 2010, the latest being the 300cc Downtown scooter, which was due to arrive in the UK last month [July]. This stylish newcomer is expected to generate sales of 50-100 units per year.

In case you think it has all been plain sailing for Masco, this is not so. A bigger scooter has already been tried and sales failed to take off. And last year Kymco sales suffered a ten per cent drop compared to 2008 sales (1200 units) because of the recession. Estimated sales for 2010 are 1700-1800 units based on half-yearly results, a healthy bounce-back.

Looking ahead, MD Kidson's sales objectives for Kymco are: "To maintain year-on-year growth in the UK. Be considered a mainstream scooter brand in the UK. Continue to introduce new models - dictated by the factory, not Masco."

In the UK, scooters account for 70 per cent of Kymco sales, motorcycles 20 per cent and ATVs make up the final ten per cent. The UK market, one of 86 Kymco export markets, is of growing importance to Kymco, which has five factories producing more than half a million units annually.

Italy is the biggest European consumer of Kymco product, which rolls down the autostradas in large, Kymco-liveried lorries.. There, Kymco is the third best-selling brand overall in a market three times the size of the UK's.

Customer/dealer service

Kidson's car industry background is reflected in the priority he gives to customer service and support of the dealer chain.

"If you ring here, you speak to a person. You don't get 'Press this number for X, Y or Z'," says the man who has headed the company since buying the majority shareholding in 2008. "And if you're going to have a dealer network, you must support it."

The network comprises 140 active dealers plus some ATV activity centres. Kidson is keen to expand the network, "but the emphasis is on quality, not quantity," he cautions.

Says Samantha Stewart, Kymco's publicity partner: "The effort behind dealer support has been significant since Ian came on board as MD."

Mark Callahan launched Masco (Motorcycle, ATV and Scooter Company) in 1998, with Kidson joining in January 1999. Callahan developed the tight ship that prospers today, still in the modest Shrewsbury premises Callahan chose for easy access and affordable rent. An Internet presence was established from day one, and the company website gives details of nearest dealers.

"Dealer margins are 25 per cent. There's an incentive to pay early, and if you order five units you get an extra five per cent. That can work out at 32 per cent on cost," says Kidson. And there's a summer competition for those dealers who increase their purchases the most in percentage terms from June to September and who do the same with registrations. Tickets to the giant EICMA Show in Milan, Italy, are the prizes.

The Kymco range carries a twoyear parts and labour warranty, with minimal bureaucratic complication. "It's a dealer decision if there's a claim," explains the MD. "He puts the bike right, sends us the bill, we then settle and claim from the factory."

The system is based on trust in the dealer and the result is a remarkably low level of claims. The cost, including parts and labour, is less than one per cent. It was seven to eight per cent in Kidson's previous employment in the motor trade. Chris Maund handles Masco service and warranty as part of his diverse duties.

Parts stock is held in the Shrewsbury warehouse. In most areas an urgent order placed before 4.30pm will be fulfilled by 10am the next day. Delivery target of machine units from the Rainham warehouse in Essex is five working days. Masco is looking to improve that.

Current best-selling scooters are the Agility 50, 125 and RS, plus the 16in wheel 50 and 125 versions. Top-selling motorcycles are the KR Sport and Pulsar. The ATV presence is strongest in the utility market, with 150, 300 and 500cc products. Masco chooses not to pursue the volatile and fickle sporty sector.

The Masco team is pumped up over the launch of the 300cc Downtown super scooter, an efi fourvalve, water-cooled single putting out close to 30bhp and with a very attractive £3999 price tag. "We've never been bombarded with so many enquiries," smiles the man at the top.

Running the business

Kidson claims he is simply sticking to fundamentals in terms of service and dealer support to drive Kymco, Masco's only brand at present, forwards. The formula, combined with good product, sound pricing and bright promotional ideas to generate increasing business in a diminishing market, has seen them through a lean spell. When Kidson stepped into the MD's shoes there was no warning light about a worldwide credit crunch. He has kept his cool throughout, guiding Masco to success.

The company employs only eight staff to cover Shrewsbury and the bike warehouse in Rainham."We're self financing - we don't get chunks of cash from Kymco - so we have to maximise the effect of every pound," explains the boss, whose business generates £2m annual turnover.

He gives credit to Samantha Stewart of Image Communications for some bright promotional ideas and PR coups. For example, the Jaguar Formula One team used Kymco scoots as paddock bikes in the days before that outfit morphed into the Red Bull team.

In February, Interflora ran a month-long promotion up to St Valentine's Day, offering a pink Kymco. Like 50 scooter. It generated increased footfall and 20,000 entries. The 19,999 non-winners received an e-mail offering them a special deal.

Says Sam: "We have customers from 16 to 75 and we implement a number of marketing tactics to reach them. We're now going for youth with a dynamic new advertising agency." Young viewers will surely have noticed Suzi Perry's Scooter Test on Channel 4's Gadget Show, in which Ms Perry chose the 50cc Super 8 as third in a field of 40 contestants.

The advertising budget is not huge, but it is accurately focused. Twist & Go magazine is the main advertising platform for the current "Let's Go Kymco" campaign, supplemented by space in selectively chosen motorcycle titles, plus Loaded and Nuts magazines to target the youth market. These publications provide the means to punch home the advantages of an insurance deal that puts any rider in any area on a 50cc mount for just £99, or a 25-yearold on a 125 for £49. This is done in cooperation with long-term insurance partner MCE, and the deal has just been extended to the end of September. There are good finance deals too, working with Black Horse.

On the sporting front Kymco backs the Aztec GP125 road race team whose riders, Danny Kent and Andy Reid, had wild card entries in the Silverstone MotoGP.

But back to the intriguing prospect of Masco's next move.

"I'm sure we could replicate what we've achieved with Kymco with a complementary range. I'm willing to consider any opportunity," says decision maker Kidson.

We'll just have to be patient to find out what that next move will be.