Could Accell Group pull out of North America

[Deleted member 803]

North American performance has been a drag on Accell Group profits for quite a while. The article below suggests that Accell is strongly considering what I believe to be a rather urgent attempt to dump the North American division (meaning discontinue or sell).

What do you think?

https://www.bike-eu.com/home/nieuws...051.786931877.1552048530-113319256.1552048530

 

[JRA]

I think that Accell Group should look at reducing the number of models it has in it's inventory for one thing. Seriously they have gone over the top with the amount of eBikes they offer that all pretty much do the same thing....they just switch out name plates and motors or some little detail but it creates a SKU to deal with along with parts and pieces.

An old friend worked for AG NA here up until a few years ago and they were looking at consolidating their lines of supply across their brands to help bring the SKU thing in check basically and he was offered a position in the Netherlands working on that but decided to go with a job heading up a progressive sports line here in the US.

But in reality NA is lagging behind in the global market for eBikes and also the direct to consumer market is a lot stronger here than in the EU vis a vis RAD, Juiced et. al.. This also may have something to do with it: https://www.bike-eu.com/home/nieuws...-stake-in-accell-group-to-20-percent-10134901

PON has already pulled Focus and Kalkhof out of the US and their stake in Accell means they have a serious seat at the table and I wouldn't be surprised if they don't have some input to share based on their decision to leave our shores. At the end of the day it is about profit and if Accell isn't seeing a future for one here in the US then they will leave.

However they will leave behind the legacy of the Class laws that they had a major hand in introducing here years ago, first instituted in CA., that were to Accell's benefit as they brought our Federal Laws on a State level more in line with the EU regulations which made their bikes more adaptable to US sales.

Recently they are investing a lot of energy in their Flyon model bike, as yet to be delivered on, but from all reports is a real power house. I really wonder what their plan is for a powerhouse type of eMTB is when there really isn't any legal category for it? On an eMTB site I follow from across the pond a guy rode one and commented on how it would out climb his Levo which to me means that it has to have over 650w and they advertise 120nm of torque. The TQ motor is known to put out 900+w as it is used in the M1 Spitzing available here already. But how does that fit into the 250w EU regulations? I can't imagine that the TQ system has all that much more power than say a Bafang Ultra 1000w as available here in the states already and at a much cheaper price point than the Spitzing and than projected for the Flyon. I guess you would have to be a fly on the wall at a board meeting of ACG and understand Dutch to know....

 

[Deleted member 803]

I think that Accell Group should look at reducing the number of models it has in it's inventory for one thing. Seriously they have gone over the top with the amount of eBikes they offer that all pretty much do the same thing....they just switch out name plates and motors or some little detail but it creates a SKU to deal with along with parts and pieces.

An old friend worked for AG NA here up until a few years ago and they were looking at consolidating their lines of supply across their brands to help bring the SKU thing in check basically and he was offered a position in the Netherlands working on that but decided to go with a job heading up a progressive sports line here in the US.

But in reality NA is lagging behind in the global market for eBikes and also the direct to consumer market is a lot stronger here than in the EU vis a vis RAD, Juiced et. al.. This also may have something to do with it: https://www.bike-eu.com/home/nieuws...-stake-in-accell-group-to-20-percent-10134901

PON has already pulled Focus and Kalkhof out of the US and their stake in Accell means they have a serious seat at the table and I wouldn't be surprised if they don't have some input to share based on their decision to leave our shores. At the end of the day it is about profit and if Accell isn't seeing a future for one here in the US then they will leave.

However they will leave behind the legacy of the Class laws that they had a major hand in introducing here years ago, first instituted in CA., that were to Accell's benefit as they brought our Federal Laws more in line with the EU regulations which made their bikes more adaptable to US sales.

Recently they are investing a lot of energy in their Flyon model bike, as yet to be delivered on, but from all reports is a real power house. I really wonder what their plan is for a powerhouse type of eMTB is when there really isn't any legal category for it? On an eMTB site I follow from across the pond a guy rode one and commented on how it would out climb his Levo which to me means that it has to have over 650w and they advertise 120nm of torque. The TQ motor is known to put out 900+w as it is used in the M1 Spitzing available here already. But how does that fit into the 250w EU regulations? I can't imagine that the TQ system has all that much more power than say a Bafang Ultra 1000w as available here in the states already and at a much cheaper price point than the Spitzing and than projected for the Flyon. I guess you would have to be a fly on the wall at a board meeting of ACG and understand Dutch to know....

Reasoned and well articulated response. Ironic that I just purchased an FLX Blade to experience a
Bafang Ultra motor. It is just a powerhouse. I just wrote up my initial thoughts on it on the FLX forum.

 

[Deleted member 803]

Too many companies have a singular worldwide distribution strategy. This is a myopic approach. Each market requires its own nuanced go-to-market" strategy. AND, not every company benefits from worldwide distribution. We have over 150 ebike vendors chasing a dying IBD market (outside of the big 3).

Small, direct, with little overhead and 3rd party mobile service is the emerging and winning model in the US.

 

[dblhelix]

Too many companies have a singular worldwide distribution strategy. This is a myopic approach. Each market requires its own nuanced go-to-market" strategy. AND, not every company benefits from worldwide distribution. We have over 150 ebike vendors chasing a dying IBD market (outside of the big 3).

Small, direct, with little overhead and 3rd party mobile service is the emerging and winning model in the US.

Hi, what is IBD please?

Regarding the emerging and winning model you predict, what about post-delivery warranty and service?

 

[JRA]

Independent Bicycle Dealer. As much as I hate to see small bike shops go away it is increasingly harder for them to exist as brick and mortar entities. Large ones such as Manufacturer flag ship stores should survive based on their brand loyalty figures however. But seeing a big one like Performance go under was certainly a tell on where the market is today.

If the mobile service has a deal with "Brand X,Y,Z", whereas they assemble and deliver you direct sale bike, then they should in turn provide warranty assistance and service.

 

[Deleted member 803]

JRA is spot on.

 

[Deleted member 803]

Everyone hates to see the local mom and pop shop go away. Unfortunately it is happening in every industry.

 

[Deleted member 4210]

If they do anything with the US, they should ditch their entire regular bike line up, stick with ebikes, and get rid of either the I zip or Raleigh brand. And yes like one poster stated they have way too many models.

Focus on fewer but better models. Ditch the tiny batteries, ditch the rack batteries, add some models with throttles, ( i.e offer ones in all 3 classes) and stop all the massive discounts on their main website, which don't help dealer's. Price them right from the get go, and you won't need the 9 month later deep discount.

Their Zuma would be great if it had a throttle, and a 14ah battery. Maybe put it under the Raleigh brand though.

They could have a line up that would easily compete with Pedego and be priced lower, yet still good for their dealers.

North American market is too large, and with too much growth potential to just leave. Kahlkoff and Focus were 2 different animals with no real distribution here, and longer time EU predominant brands.

So it made sense to yank those two, and it would have taken too much money and effort to get traction for those 2, and would have only diluted the Raleigh efforts. Use the Raleigh, Izip base to build upon.

 

[Deleted member 803]

If they do anything with the US, they should ditch their entire regular bike line up, stick with ebikes, and get rid of either the I zip or Raleigh brand. And yes like one poster stated they have way too many models.

Focus on fewer but better models. Ditch the tiny batteries, ditch the rack batteries, add some models with throttles, ( i.e offer ones in all 3 classes) and stop all the massive discounts on their main website, which don't help dealer's. Price them right from the get go, and you won't need the 9 month later deep discount.

Their Zuma would be great if it had a throttle, and a 14ah battery. Maybe put it under the Raleigh brand though.

They could have a line up that would easily compete with Pedego and be priced lower, yet still good for their dealers.

North American market is too large, and with too much growth potential to just leave. Kahlkoff and Focus were 2 different animals with no real distribution here, and longer time EU predominant brands.

So it made sense to yank those two, and it would have taken too much money and effort to get traction for those 2, and would have only diluted the Raleigh efforts. Use the Raleigh, Izip base to build upon.

The North American market is very small. In the bike industry it is considered a tertiary market.

 

[JRA]

I think I corrected you once before that Kalkhoff has had a presence here in the US dating back to 2001, even with an office in Portland, OR.. So I would call that a real distribution effort.

While the US market potential seems large it is not going to reach the sales percentage per capita that the EU is experiencing due to their better acceptance of bicycles in general.

They do need to trim the fat though obviously and concentrating on a few brands with less models seems like a sound plan.

 

[Mikey-]

If Accell were out of the picture, do y'all think Haibike would find another distributor and maintain in the USA?

 

[Deleted member 803]

If Accell were out of the picture, do y'all think Haibike would find another distributor and maintain in the USA?

It all depends upon the contractual relationship. My guess is that Haibike would find another distribution outlet if sales warranted.

 

[JRA]

Haibike is one of Accells flagship brands that has had more exposure in the EU than here. Because it is one of their brands unless they decide to license it to another concern it would be unlikely that it would continue here if they do in fact pull out of North America. Here are their North America brands:



Of those the Haibike brand has had the least exposure here, outside of eBikes at least. Redline, Raleigh, Torker and Diamond Back are brands with long histories here albeit not as much with regards to eBikes although Raleigh has had a good presence for awhile. But brands like the aforementioned are more expendable and salable to other groups involved in the bicycle marketplace and a good chance they would continue if there is any interest.

All this is supposition because Accell is a long ways hopefully from pulling the plug here and that the eBike market in NA will mature enough to make their investment here pay well enough to stay.

 

[Ravi Kempaiah]

I feel like some of the discussion here is misinformed.

Accell is trying to sell the non-ebike portion of their portfolio. The loss of Dick's sporting goods contract was a tough pill to swallow for Accell in 2017 and they had to make a lot of adjustments after that.
https://www.bicycleretailer.com/nor...perations-due-lower-sales-through-traditional

But, their E-bike brands are really taking off. They are posting 30% growth every year.

I can see where the disagreements can come in. Susanne Puello (who' father started the Haibike) might be pissed because the non-ebike side of Accell is losing revenue while Haibike is kicking ass. And in the board meeting, they normalize the profits across the lineup, it is not fair for profit generating products like Haibikes. It's like rich EU countries pissed about bailing out Greece after their financial melt down.

So, some smart people seperated the E-bike division from the non-ebike division.

https://www.bicycleretailer.com/int...-american-e-bike-business-standalone-business

Anyways, Accell is posting double digit growth for their E-bikes.