Gas Gas: The Strategy in Oz

Ever since June last year, when it was announced that Urban Motor Imports had taken over the distribution of Gas Gas enduro bikes in Australia and New Zealand, these new-generation two-strokes have been turning heads with an intoxicating mix of top-shelf componentry and sharp pricing. But what can we expect from the Spanish brand in the next 12 months? How different are their 2019 bikes? Who are their new models aimed at? Will the brand continue to price its bikes so aggressively? And can Gas Gas really go from five to 40 dealers in just two years?
At the recently media launch for the 2019 enduro range, we asked these questions and more of Urban Moto Imports’ hands-on CEO, Joseph Elasmar…

TM: In off-road circles, Urban Moto Imports is a relatively new name. Tell us a little about the company, Joe.
JE: Having been involved in motorcycle dealerships since 2004, I got the opportunity to move into the wholesale side of the business and started Urban Moto Imports in 2010. And it’s been an awesome ride ever since. In addition to Gas Gas, which we took on a little over a year ago now for both the Australian and New Zealand markets, UMI is also the Australian distributor for MV Agusta, Benelli, Royal Enfield and Super Soco, which is a new electric commuter-style motorcycle that will enter the market in the coming months. In addition to that, we will be officially launching Peugeot Motorcycles in November. Again, that will be for both Australia and New Zealand, and includes the brand’s range of scooters and the new road motorcycles that were recently released at the Intermot show. Everyone at UMI rides motorcycles – some are novices and some are racers – so there’s a real passion about what we do. For me, that culture is a big deal because it flows through to our dealer network and the end customer.

“We’re intent on building the brand by getting more people aboard the bikes. Our core focus is not to make a serious margin on the bikes at this point; the money will come in due course when the volumes are up.”

How did the opportunity arise to take over the distribution of Gas Gas motorcycles in Oz and NZ?
As a business, we’ve identified the enduro segment as something we need to be involved with for some time now. And the advances that Gas Gas made with the new-generation 2018 enduro models – released about a year ago with the new single backbone frame and Kayaba suspension – reinforced that the brand is in it for the long haul and represented a great opportunity for UMI. Gas Gas was already front of mind for us, and then shortly after Phil Wilkinson came on board as the Asia Pacific manager, he approached us with the offer to take on the brand.

Given the road bike segment’s sales have been subdued of late, taking on Gas Gas kind of broadens UMI’s portfolio too, right?
You could say that. The road bike segment has had a rough 18 months to two years. We’ve been doing well in spite of that, but adding the off-road brand is significant for us. Plus it helps us through the months that you typically see a slowing of sales in road bikes.

It came across clearly at the media launch for the 2019 models that you guys are proud of what you’ve achieved with Gas Gas in 12 months and optimistic about its future growth potential.
In a short period of time, we’ve managed to bring on some key people with lots of experience in the enduro market, and grown the brand significantly. Seeing as a majority of the team at Urban Moto Imports has an off-road background, the brand’s fit was really good. That passion for enduro motorcycles means our guys are really excited about the opportunity, and they’ve all gone above and beyond to drive to brand’s growth. In the past 12 months, we’ve also supported a few racers and can already boast some Outright or two-stroke class wins – at the 2018 South Australian 24-Hour Trial, Yellow Mountain Enduro, and Mad Max Hard Enduro, for instance.

“It’s not until they ride one that they really appreciate the level of the motorcycles and what they’re capable of doing straight out of the crate.”

The recent growth in Gas Gas dealerships has actually been astronomical.
It has. In 12 months, we’ve gone from a virtually non-existent dealer network to 28 dealers across Australia and New Zealand. We plan to add several more in the coming six months, and our objective is to have around 40 dealers across the two countries by the middle of next year. We’re confident we have the software packages and dealer support capabilities necessary to meet those targets. The nice thing is that the demand is there for the new-generation models; so much so that we sold out of inventory in the past few months. I think the new motorcycles are testament to what the brand is all about, and after the launch of the 2018 models a year ago, the rave reviews we got across the board certainly helped our cause. Winning a bike shootout with ADB and the Enduro Bike of the Year gong with BikeSales.com.au also helped keep the momentum going.

Looking ahead, what growth targets do you project for Gas Gas in Australia and NZ?
In the next 12 months, with the upgraded 2019 models, we’re confident that we’ll see another 50% growth in sales. We’re also very optimistic about how the all-new ECRanger will sell here. It’s a slightly detuned version of the EC300 and EC200. That model represents unchartered territory for us, so we’re not sure what sort of market penetration we can get. But if we get our pricing right and can appeal to a much larger audience, I think we’ll be on a real winner and scale our growth targets up significantly.

How does that 50% growth translate in terms of units sold?
I’d rather not divulge those numbers yet.

Too early to make the substantial investment required to run a race team?
Yep. For the time being anyway. We’ve been supplying bikes to a few key riders. They’re flying the flag for us, and we give them technical support in return. That’s likely to evolve into something more significant, but whether that’s in 2019 or 2020 remains to be seen. In the meantime, we plan to look at our options for getting involved in some grassroots-style trail events and definitely invest pretty heavily in a demo bike program for 2019.

Because, demo programs indicate a confidence in the product?
Absolutely. It’s all about getting butts on seats and letting people experience first-hand how good these new-generation Gas Gas models are. It’s not until they ride one that they really appreciate the level of the motorcycles and what they’re capable of doing. Whether it be a racer, or a person jumping across from another brand, or a rider returning to the sport, or someone who’s new to enduro, the feedback we get from everybody is now well the bikes handle straight out of the crate, which makes them very user-friendly. And from a pricing perspective, we’re on point.

More than on point, your pricing appears pretty damn sharp compared with the other comparable enduro bikes.
It is. In spite of the exchange rate between the Aussie Dollar and Euro moving against us by about 7% in the past year, we only put the retail prices of the 2019 models up by $200. Which is nowhere near 7%. And when you factor in the additional features that come on the 2019 models – such as the dual-stage mapping – you’d expect a significant price increase. So we’re confident the bikes offer exceptional value. In other words, we’ve been prepared to wear a lot of the exchange rate movement because we’re intent on building the brand by getting more people aboard the bikes. For us, the core focus is not to make a serious margin on the bikes at this point; the money will come in due course when the volumes are up.

Then Gas Gas’ cross-country models – the XC250 and XC300 – will be about $500 cheaper than their EC counterparts, right?
There abouts. The only differences between the homologated enduro models and the stripped-back cross-country models is the headlight versus front plate, the electrics, the expansion chamber and the suspension’s clicker settings. Whether you’re talking about the enduro or cross-country models, you only have to look at the Kayaba suspension packages they come with to reinforce the exceptional value they represent. We see that KYB twin-cartridge fork, in particular, as a step above what the other brands come with. When you look at the component spec across the board, our bikes are more feature-rich than most of the others in the class. Several European brands are making great enduro models, but I like to think that the extras you get out of the crate – and the affordable price tags – will ensure Gas Gas bikes are now on the radar for a lot more riders.

“In 12 months, we’ve gone from a virtually non-existent dealer network to 28 dealers across Australia and New Zealand. Our objective is to have 40 dealers by the middle of next year.”

Getting the pricing right will be key for the all-new ECRanger too.
Absolutely, it will. The ECRanger – what we’re calling the ‘ECR’ – runs the same chassis as the EC models. In fact, it’s very much the same motorcycle with a few down-specced components and a detuned engine, but we’re going to ensure we get as close to that $10,000 price point at the dealer as possible. If we can achieve that, we believe we’ll be able to attract a lot of people who are currently looking at $6000 to $7000 second-hand motorcycles. Secondly, we think that giving people access to a race-spec, user-friendly bike at this price point will attract riders back into the sport. Both the 200cc and 300cc versions will be available in fully homologated – that is, registrable – spec, and will be here around Christmas.

And there’ll be some Six Days models arriving in the meantime?
Yes, albeit in limited numbers. They’ll be $400-$500 more than the standard EC models, which is not a lot when you consider they come with additional features such as the FMF expansion chamber, the NG oversize floating front brake disc, front axle puller, Renthal TwinWall handlebars, special seat cover and cool-looking ISDE graphics kit. Again, we’re about making the pricing sharp and working on slim margins to make all Gas Gas products accessible to a much larger audience.

What does the future for Gas Gas in Oz and NZ look like in, say, five or 10 years?
Gas Gas is investing heavily to position the brand for long-term growth, and there are some very exciting developments in the pipeline. The exceptional bikes Gas Gas has produced for this new platform has made our job a lot easier, so all I can say is that we’re very positive and excited about where the brand is heading. And based off how they sold last year, the ‘GP’ models – which we’ll see early in 2019 – are likely to be snapped up before they even arrive here!