Vectrix Yet in Limbo
By Bill Moore
Posted: 28 Aug 2009
"To be or not to be. That is the question," someone at Vectrix must be asking themselves. Their websites are back up and their telephones are ringing; at least you can leave voice mail, which I did for Buzz Alexander in media relations.
Last month, the company was closing down operations both here in the US and at its production facilities in Poland. The report circulating then was that the company would file for bankruptcy within 30 days, which has now come and gone. The local BMW motorcycle dealer here in Omaha that is also an erstwhile Vectrix dealer was recently told by a larger dealer in California that the company has not yet filed. The speculation, fed by Vectrix sales, is that "one or two" individuals or groups are looking at picking up the company, though the assumption had been they'd wait until after the company declared bankruptcy.
So far, there has been no word on possible negotiations or legal filings, effectively meaning Vectrix is in limbo. What is known is that the company isn't supplying replacement parts or honoring warranties and that dealers are having to canabalize machines for spare parts. Still, they are being advised to "not do anything rash," according to BMW Motorcycles of Omaha's Jim Gaston.
As we await news on the fate of the company, EV World received the following email from an engineer who formerly worked for Vectrix offering his inside perspective on the company and its woes. He asked to remain anonymous since there are outstanding financial obligations that need to be resolved between himself and Vectrix. Assuming someone does rescue Vectrix, they would do well to need his advice.
Being first, like the Xerox, had little to do with the success or (in this case) failure of Vectrix. In the last few years of the company, the model was to mimic BMW (motorcycles), setting a dealership every 750 miles in the same market as a BMW dealer. There are major reasons why this strategy was doomed to failure. First, people who buy BMWs do not buy scooters. When was the last time you heard of anybody looking to buy a grand touring motorcycles meant for long distance over-the-road trips instead coming home with a scooter with a limited range? Which brings me to the next point that 750 miles is to far between dealers. How is a customer expected to drive his Vectrix home if it is half that distance away? A scooter with a 60 mile (according to literature) battery range and an eight hour time to fully recharge means unless you bring a trailer for you new Vectrix, it is going to take you a full week to get it home. Then there is the issue of where BMW dealers are located, spread out across the US with a large number in the northern tier states. Scooters don't sell well in Minnesota, Michigan, Montana so why concentrate on expanding into that dead market? Why concentrate on the North where the market is only half of the year long or less? Why indeed.
As you pointed out, anybody who rode a Vectrix came away changed by the experience. The product was the best of the two wheeled EV market. It just needed to find its market. If Vectrix wanted to be successful, it should have from the get-go set dealerships in the sunbelt states where the market is year-round, particularly concentrating on coastal regions where scooter sales have traditionally been the highest. This is the market place, this is where the customer lives. Dealerships should be no further than 100 miles from each other or delivery should have been free. This would ensure the bikes would get to the final destination, the customer's home, without nasty letters and angry customers. Since there was a great many unsold scooters on the Vectrix shelf, a scooter should have been placed in every shopping mall within 60 miles of a beach ensuring maximum market saturation. To this day, if I ask a scooter rider if they considered a Vectrix during the purchase process, they respond with "Vectrix, who's that?". Finally, if Vectrix wanted to be successful, the marketing literature should have been truthful about range expectations. Most riders would see a 35 to 45 mile range depending on the rider's style and average speed. The early literature claims of 60 miles was a big point of customer anger and was wholly avoidable.
In the end, none of this matters as it is all too little too late. Nobody with business sense will want to buy Vectrix. The last I heard, the factory in Poland is all but closed with all of the tooling being held ransom by unpaid angry suppliers who were left holding the bag. Any investor would likely have to retool the entire factory, move it to the US where just as many suppliers are angry, and find someplace cheaper than RI and MA to build the company back up. As the Vectrix price is ridiculously high (~$12K) and competitive gas scooters cost $6K (on the high side) and can get 75MPG, gas would have to be well over $10/gallon to make the purchase economically advantageous to the mass market. Production quantities would then have to be limited to a couple of hundred annually to please those that want the 'green' experience. So all of this together means Vectrix is at an end. The market is now left to the next company willing to risk the EV two wheel market. I wish them well.
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