Small localized assembler-manufacturers versus globe-spanning operations

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reikiman
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Small localized assembler-manufacturers versus globe-spanning operations

Reading the thread on Vectrix's problems I'm weighing in my mind between two business models and wondering which is preferred.

http://visforvoltage.org/forum/6142-suspension-trading-what-does-it-mean#comment-37924

Vectrix is an example of one extreme.. With a globe-spanning sales and support organization and (for the light EV market) large scale production. Brammo actually is heading in exactly that direction as well, e.g. they are due to begin selling through Best Buy. Zero Motorcycles is also heading in that direction, witness their visit to the UK a couple weeks ago to showcase their bike.

Another extreme is a local or national level assembler/manufacturer who brings together existing parts, assembles and sells them. They might depend on one of those factories in China for the major parts, they might not be doing much cutting edge technology innovation, instead their value might be service and customization support.

Contrasting these a bit ...

Setting up a global scale organization takes a lot of money, a lot of people, etc .. So too does offering excellent warranty support. That means a harder startup period, have to convince more investors to pony up more cash, etc.

The larger organization can make a bigger splash, can make a bigger impact, etc.

Fact is that electric scooters and motorcycles are a niche product which at the moment doesn't have mass appeal. Is it feasible for a single global organization provide global support for a niche product? As a niche product is there going to be enough sales in every region to support having service people in every region? For example in Mik's long story with Vectrix I'm astonished at how far Vectrix support people had to go to service Mik's bike (back when his warranty was still valid).

A local assembler-manufacturer can more adequately service a given locale. Lower marketing expenses, perhaps only one sales and service location, etc, means for lower startup costs.

A local assembler-manufacturer could more easily tune their product to local preferences and needs. A local assembler-manufacturer in St. Petersburg (Russia) might make sure to include battery pack heating blankets and a heated seat for winter time riding, while one in St. Petersburg (Florida) might make sure it's well insulated against rain.

electricitycycles
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Re: Small localized assembler-manufacturers versus ...

Hi,
I think you have a great point here. The smaller assembler has the capacity to build for a niche audience and needs to nurture their clients.I think a builder basically can be put in the same context as bobber/chooper/street fighter builders. They start as small shops and then grow based upon the scope and desire of the ownership as well as the quality of the vehicle.

Setting the bar low and designing a business based upon this is the smart way to go. Many firms keep hiring and buying tools in an attempt to get ready for the rush to their product. Vectrix is a cool scooter but its just that, a scooter in the US. Their focus should be or have been China/India/Brazil and not the US. You just don't get the scale.

However, I think that the concept of a standardization and the economies of scale have yet to really be employed effectively. I would love to open a conversion shop, but I'm just not sure if the demand to have someone else build a bike for you would be there.

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KAE
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Re: Small localized assembler-manufacturers versus ...

I would have to agree that smaller retailers is better to support a niche market like electric bike's or scooters. Customers will be more likely to have lots of questions or issues with such a new and somewhat unknown product that having a personal relationship with the local assembler or manufacturer makes life a lot easier IMO.

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Mik
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Re: Small localized assembler-manufacturers versus ...

Small localized assembler-manufacturers versus globe-spanning operations...

Or better, both!

Like TWIKE: Build locally + sell kits, that gets around some troublesome rules and regulations; and provide generous email support in addition to all schematics and plans so that the vehicle can be serviced anywhere!

A least I think that's what they do, and last time I looked, they had a long waiting list for their vehicles!

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marcopolo
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Re: Small localized assembler-manufacturers versus ...

The real problem is that neither business model is really feasible at the moment. It is impossible to achieve the sort mass volume sales able to support the substantial investment capable of providing profitable returns, for the sort of R&D, economies of scale, market education, high quality manufacture, warranty support and product development needed for a mass manufactured product.

Conversely, small scale manufacture of such a narrow niche market EV must always produce a fairly poor quality product,acceptable only to the hobbyist.(well that is if the EV Bike is to be produced at an affordable price.)

In my opinion, the only real hope for a mass commuter/consumer acceptable EV bike capable of dealing with modern traffic conditions is for one of the major existing manufactures to take it on as a loss leader. The advantages are obvious, if Honda, Toyota Yamaha, etc.. produced a bike like Vectrix the issue of market acceptance is greatly reduced, as would be warranty networks, quality control etc, etc..

I am most alarmed at the concept of a proliferation of "home built or Hobbyist bikes" even from small manufactures. Nor do I want to share the roads with Vehicles "that get around the authorities restrictions" !! In fact, although I have no engineering background, I do have a legal background and would really caution any hopeful small manufacturer. The days of "heroic ' motoring developments have certainly become far more hazardous in a modern consumer litigious society!

marcopolo

jdh2550_1
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Re: Small localized assembler-manufacturers versus ...

The real problem is that neither business model is really feasible at the moment.

Hmmm, call me biased but I'm not sure I agree!

It is impossible to achieve the sort mass volume sales able to support the substantial investment capable of providing profitable returns, for the sort of R&D, economies of scale, market education, high quality manufacture, warranty support and product development needed for a mass manufactured product.

Of course I do agree with this part. Vectrix is my favorite example.

Conversely, small scale manufacture of such a narrow niche market EV must always produce a fairly poor quality product,acceptable only to the hobbyist.(well that is if the EV Bike is to be produced at an affordable price.)

I disagree with this. I think you're discounting the modular nature of vehicle assembly and today's global market place. Both of these are still "emerging trends" (even though they've been promised for over 20 years). In other words the landscape for the small niche manufacturer is improving. I also think one has to look at the question of "quality" with much more rigor - it often gets used as a sort of catch all for every conceivable problem.

In my opinion, the only real hope for a mass commuter/consumer acceptable EV bike capable of dealing with modern traffic conditions is for one of the major existing manufactures to take it on as a loss leader. The advantages are obvious, if Honda, Toyota Yamaha, etc.. produced a bike like Vectrix the issue of market acceptance is greatly reduced, as would be warranty networks, quality control etc, etc..

I do very much agree that if an accepted "name" were to seriously enter the marketplace then it would have a "game changing" affect and could lead to widespread acceptance. However, the trouble is that (a) it takes sales and service revenue away from that company's core business & (b) it actually gives a boost to the little guy because the "market education" component of EVs has now been expertly handled for them. Honda is by and large an engine company - it's no accident that they make lawnmowers and jetskis as well as motorcycles and cars. Those products all have great internal combustion engines. They have a LOT invested in making and selling ICE's - they're likely to move very cautiously into an EV world.

I am most alarmed at the concept of a proliferation of "home built or Hobbyist bikes" even from small manufactures. Nor do I want to share the roads with Vehicles "that get around the authorities restrictions" !! In fact, although I have no engineering background, I do have a legal background and would really caution any hopeful small manufacturer. The days of "heroic ' motoring developments have certainly become far more hazardous in a modern consumer litigious society!

I know that the above comments aren't directed at CuMoCo. But we are a small manufacturer and I feel "duty bound" to point out that we are doing everything properly to produce a bike that meets and/or exceeds the appropriate standards.

John H. Founder of Current Motor Company - opinions on this site belong to me; not to my employer
Remember: " 'lectric for local. diesel for distance" - JTH, Amp Bros || "No Gas.

Mik
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Re: Small localized assembler-manufacturers versus ...

Like TWIKE: Build locally + sell kits, that gets around some troublesome rules and regulations;

Nor do I want to share the roads with Vehicles "that get around the authorities restrictions" !!

I wrote that in an ambiguous way...

What I meant to say was this:

Kits can be imported, assembled, registered and used by individuals. Top-notch quality, preferably. Then the vehicle gets inspected and licensed as a one-off vehicle, if it is compliant with all the rules and regulations imposed by the road traffic authorities.

This can (at least in some countries / legislatives) happen without having to pay the very large fees which are involved for getting a vehicle assessed and licensed for importation and use by any number of buyers in the future.

I might misunderstand this, though. I never tried to import a vehicle so far.

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There is always a way if there is no other way!

Henrique
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Re: Small localized assembler-manufacturers versus ...

This is my first post on the Forum, even though I have been reading some bits and pieces for I while, this topic raised my interest into joining the conversation.

What concerns this topic, I think both Localized manufacturers and global scale organizations will "have a share of the pie". I think local manufactures are capable of producing good quality Light Electric vehicles, with the only problem being the regulations and the expensive and complicated process of getting them to be street legal.

Another interesting possibility is the chance of local manufacturers collaborating with global organizations to help them fine tune their products for local markets.

Regarding this collaboration between small companies and global organizations, there is an interesting article on Wired magazine this month talking about Open Innovation and the Car industry in the US. The story leads to the conclusion that the only way for the 3 big auto companies in the US to come out of this ressesion is to change from a TOP-Down Sytem, where they "either manufacture parts in house or dictate their design and production to a small group of suppliers" to an Innovation Cycle where they open up to outside innovation, where suppliers (that could be small local companies) work independently to create components, the automakers select the best ones to include in their models.

For that to really happen, I think that an open platform needs to be developed to host such collaboration process. With the help of open source software and good CAD standards, small companies would be able to easily participate in the process and contribute for the innovation process.

I once bumped into this webpage titled "small economy" which outlines among different things, a vision for a open source product design It got me thinking here that the those thoughts could be the foundation for a collaboration platform that would empower Small localized assembler-manufacturers to provide a good quality vehicle that is relevant to the local community, using materials available in the region, and because it is built locally, support shouldn't be a problem.

I agree with electricitycycles that mentioned above that standardization is a major issue, specially if people would collaborate on the development of this vehicles.

Product Designer and Blogger
www.letsevo.com

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