Manufacturer Kymco has a lot of experience to draw from and thanks to its motorcycle division, has the designs and systems that managing director Mark Hermolle believes gives it an edge over competitors. But here, we learn its true secret to long-term success is building a strict dealer strategy revolving around a B2B philosophy and heavy support.
Set in an unassuming industrial estate in Bridgend, South Wales, alongside the likes of Roma, Drive DeVilbiss and Invacare, Kymco has evolved in the depths of one of the mobility sector’s richest fonts of knowledge and expertise. What’s more, at its helm is yet another product of Invacare’s engineer and service training, Mark Hermolle, who, like many of the industry’s top suppliers, learnt his trade with one of the world’s largest mobility manufacturers.
It is hardly surprising then that since its UK base launched 10 years ago, Kymco’s focus has been on cutting-edge high-end mobility equipment. Hermolle became involved with Kymco’s Taiwanese research and development team early on and once a UK base was set up in Wales, new and exciting designs, the likes of which had not been seen before, began feeding into the market.
In Hermolle’s words, products had previously been functional-looking and Kymco came out with something that “looked more like a Porsche”. Uniquely, the Taiwanese supplier also manufacturers high-end motorcycles and petrol scooters and so it is able to share design and engineering know-how with its healthcare and mobility division, which is a luxury few, if any, other manufacturers enjoy.
This, Hermolle says, means that Kymco has an edge when it comes to designing mobility products and it employs a number of techniques used in its petrol arm, such as SLS (stereo lithographic styling). Some of its mobility products are also developed from clay models which are carved and modified in the same way as high-end cars are designed.
But while aesthetics are important in a market of customers demanding ever more attractive equipment, Hermolle knows that appealing designs are pointless without quality and serviceable engineering beneath the bodywork.
“There are certain suppliers that will want all the mobility dealers in the UK on the books but we don’t operate in that way. We work with people who are going to deliver a good service”
He comments: “It’s a very, very exciting time on the design side and Kymco has proved to be a very reliably design-led manufacturer. But the products are also designed for easy service. Back in the day, if you wanted to remove a transaxel motor system, then you’d have to have one spanner on the top and one underneath, but with a Kymco product it was just a spinner off the top so you could do it in seconds. It’s like working on a Formula One car rather than an old car. The serviceability and quality has proved itself on the Motability side.”
If there is an industry benchmark for where a company’s products and service measure up to the rest, then Motability can be regarded as it. And in the last five years Kymco’s success on the scheme paints a positive picture of its products and service. The company’s mobility scooters were the most-prescribed products on the scheme in 2013, 2014, 2015 and 2016, which it fairly sees as a reflection on its equipment, lead times and servicing.
Nick Peel, sales manager for the firm, notes that so far, the company is leading the way on Motability again this year. “The market has evolved,” he says. “While it’s not our whole business, Motability is an important part of our business. A lot of the dealers find the benefits of having access to it. And we’re very, very fortunate many of them lead with our product. They lead with our product partly because of the aesthetics. They are modern and fresh-looking compared to a lot of what is on the market and it comes down to the quality and the reliability too.”
Building a bright future on dealer strategy
In spite of its Taiwanese backing, when Kymco first launched in the UK market it was a very limited operation. Aside from Hermolle, it had a salesman and a technical expert. It had no dealers, no products and no spare parts and was without a building or staff.
Hermolle explains that it was tough trying to persuade dealers to come on board during the initial set-up. “We found it was pretty tough for them to believe in the product, its reliability and whether we’d still be there tomorrow,” he says. But he adds that when year three came around, business “exploded”.
“After year three, everything changed. Dealers knew they could trust us, our spares and our training. The core of our company since the beginning has been care and aftersales support. We’ve always carried the spares and we’ve never cut back on the inventory we hold because we know it’s critical. And because we’re the manufacturer we’re able to stock all that.”
Kymco expanded its network quite quickly and while choosing new partners it focused on a number of factors, which it still considers today. As with many manufacturers, dealers that subscribe to a Code of Practice, such as the BHTA’s, appeal to Kymco. The company has to know a retail partner has the appropriate showroom, engineering capacity and aftersales to ensure Kymco’s brand is received well by the end-user. Hermolle also outlines that retailers that take an assessment-based approach to sales are something the company looks for.
Peel adds: “In terms of a selection process with dealers, there’s every type of dealer out there in the marketplace that you could go and deal with. But we select them by a criteria and there are some large dealers who we’ve not worked with. There are certain suppliers that will want all the mobility dealers in the UK on the books but we don’t operate in that way. We work with people who are going to deliver a good service, represent our product correctly and keep the end-user happy.”
“We’re working with companies that have overheads and staff to look after so if someone pulls the rug from underneath you it’s a bitter pill to swallow”
The fact that Kymco limits the size of its dealer network is likely welcomed by its current retail partners. While sales volume is important to the manufacturer, it sticks to a strategy of concentrating on maximising the potential of a select few partners. Hermolle explains: “We don’t need thousands of dealers, we need good dealers that can sustain that area.”
Peel says that if Kymco were to change its philosophy and “open the doors to everyone”, it would require either more resources to be able to service the accounts properly or the accounts would start to migrate away because there would be no unique experience of being a Kymco representative. He sums up: “By default it keeps it keen and it keeps it lean.”
Kymco’s area sales managers select the dealers they want to work with and ensure that there are not multiple accounts in the same locality to avoid crossover. Peel says that dealers are able to control their own fate and if they are delivering on sales then area sales managers do not need to look at other retailers. It is, he says, a professional way of working.
While the manufacturer expects its partners to achieve satisfactory sales, it aims to do what it can to facilitate that and as part of its retailer support it has always strictly sold to trade customers only. As a motorcycle trader, Kymco has always operated a B2B policy and Peel admits that although some dealers don’t mind their supplier’s selling direct to end-users, it might be something that would concern him if he was a retailer.
Meanwhile, Hermolle comments: “At the end of the day, we’re working with companies that have overheads and staff to look after so if someone pulls the rug from underneath you it’s a bitter pill to swallow. I’m a firm believer that our way is the right way to go about it.”
Aside from avoiding direct sales channels, Kymco places a great deal of its retailer support in its parts sourcing and lead times. For example, few suppliers can offer next day delivery on scooters including up until 5pm the day before, says Hermolle, who aims to ensure shelves are well-stocked with spares.
One of the key drivers of its quick lead times has been Motability, according to Peel. He says the scheme came to the market and put pressure on the supply chain because some suppliers were “falling foul and behind any reasonable expectations”. Peel says that while reasonable expectations encompass any time between 48 and 72 hours, he claims Kymco was consistently delivering in 24 hours.
“We were number one on the scheme and Motability was keen to learn from us and we were number one. It came down to the aesthetics and quality of the product but it was also the aftersales service that props the whole thing up. We certainly set the benchmark. It showed what companies needed to do if they wanted Kymco’s volumes on the scheme. Most suppliers engaged and slowly but surely I think service levels are improving.”
Speed of delivery is vital for dealers, whether they are on the Motability scheme or not. But it is also important that speed and efficiency works the other way and that retailers are able to source and order things quickly from their side. Aiming to make the entire process smooth, Kymco’s online parts ordering system is the same as that of its motorcycle arm. Dealers input a product serial number and a diagram is brought up showing the product. Then they can zoom in on a specific part and click on it and information and pricing is immediately brought up. Peel says it means that dealers order the correct part every time and ambiguity is eliminated. He notes that it can be tough getting retailers to try new things and urges them to try it out for themselves when they next order.
A lot of these systems have been applied from Kymco’s motorcycle manufacturing arm so claim to be unique in the mobility market. It is hoped the online systems for warranties, spares and registrations will make things much simpler for dealers who are short of time.
For Hermolle, that is largely what it boils down to. Years of industry experience has taught him that supporting a select number dealers, whether it be with products, materials, ordering systems, lead times or respect for local accounts, can trump ‘mass-market’ approaches when it comes to securing volume. And As Kymco reaches its 10th year trading in the UK, Hermolle promises more of the same for partners in the coming years.
He concludes: “We’ll keep evolving. I think there comes a point where you have your key partners and we’ll see how it develops. But it doesn’t necessarily mean that as we grow our business we have lots more outlets. It’s about a more professional way of the same outlets covering more area.”
Kymco evidently expects a lot from its chosen partners, but one thing is for sure; dealers are far from alone in their mission to reach more customers and the manufacturer will be fully aware of that if it is to grow, it will need to throw all the support it can at its dealers. If the past 10 years are anything to go by, that support certainly seems guaranteed for the next decade.