Is the US Rotax Motor worth $500 more?

[Jon Andrews]

Extending the argument from an existing thread.....

quote:

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My point exactly. There is absolutely no differance between a UK and a USA motor except the "country code" and around $500.
-Chuck McCue

And tariffs and duties and taxes and .....
And marketing and rental fleets and importer support....Equals $500.
-Andy Seesemann

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So based on this argument

1. Import taxes are higher in the US than in Australia, UK and the rest of the world? US import tax is 2.5%, what is it elsewhere?

2. Marketing costs are absorbed by the distributer/retailer/importer in the rest of the world as part of the sales price of $1100-$1500, what is DIFFERENT in the US?

3. Why should a customer have to pay for the 'rental fleets' of the retailer? Isn't the concept of a 'rental' that the cutomer as least pays for 'running costs' of the equipment (not neccessarily any profit here)

4. What exactly is "importer support"?

As has been evident in the posts on this board, the vast majority of MAX racers are not interested in the RMC (here or the UK). Therefore US racers are padding the pockets of the importer/distributor to the tune of $500 for each engine and receiving NOTHING in return.

How long before clubs realize that the class can be grown significantly by allowing any sealed engine from ANYWHERE in the world and completely forget about the RMC?

As I have already posted on TKWS earlier in the year I can get a motor shipped from abroad to my door insured, incuding import tax, in less than 3 business days for ~$1350......

Jon.

[ August 02, 2001: Message edited by: Jon Andrews ]

[Stephen Burnstad]

We had the same questions here Jon,
One of the guys I race with bought 2 Max engines complete from Europe and saved about 1500.00 Cdn. All the dealers were choked becuase he didn't buy it from them. The racers on the other hand didn't have any problem with it. All he had to do was have it resealed here which one dealer finally did for him.

[Oscar Aguilera]

Hey why bash the importer. Maybe the manuf. is selling the motor to the importer from the US(SSC) at a higher price. This price helps differ the Free trip for the few drivers that will win it.

In order to protect the guy that has his $$ in inventory there have been rules made by the manuf. If I imported a chassis and worked out of my garage I sould sell chassis for less with less overhead. Would you buy form me? Of course you would, and the shop down the street that has the trailer and all the parts you need stocked at his expense, shows up to the races every race day will lose sales.

The mauf. in this case is out to protect the investor that is your Rotax dealer.

Ever notice how some parts or chassis have more than one representatve in your area? Why would a manuf let one co. duke it out with another and the manuf. expect's them both to stock all the parts needed?

[Nick Weil]

A little sidenote to this whole discussion is the fact that the Rotax Distributors are NOT ALLOWED to knowingly sell and export their motors to other countries.

Why is it so hard for karters to understand (and acknowledge) that the primary reason for being in business is to make money.

Do you really think that someone should go through the time and financial responsibility of setting up a business so that the karting community can buy their parts and equipment for pennies on the dollar?

What does anyone consider to be a fair amount of markup that dealers of any part whether it be tires, Chassis, engines, fluids or any of the other items you need to go karting?

Let me set a hypothetical here:

Kart dealer 'A' gets his 'part' from the manufacturer for $300 and pays for said part up front with cash out of his own pocket. That part sits on the shelf with 100's maybe thousands of others (not all $300) for over six months before someone needs it. When he sells that part what do you think is a fair price? $350? $400? $500? $600? Tell me what you think is fair and why. I think this could be a very interesting topic.

Let the games begin...


Nick

[Stephen Burnstad]

How far do you want to go with this?
What ever happened to free trade?
If I can buy a part from the US cheaper then in Canada are you saying that out of some miss guided loyalty I should pay more?

[Gemma]

What would happen if I wanted to move to the US, and wanted to bring my 2 Max karts with me? Does this mean that my engines are illegal in the US because they do not have the correct engine number?

On a different topic, I think the manufacturers are the ones who make the bulk of the money in karting. I know of a distributor who makes approximately US$150 on a full Rotax set-up ready to go, thats kart, motor everything.I think now that there are just far to many retailers in this industry,and the pie is not big enough for them all to make lots of $$$$. Everyone is trying to make more sales by reducing the costs to the karting people, and in the end, no-one makes any money. We have the same situation with the number of classes, here there are I think about 32 different classes, I would think that there are about 132 different classes in karting. The end result is less drivers in each class, less racing for each class, lower competition ijn each class, less promotion for each class,less sponsorship available for each class, less money spent by each class, and all this adds up to higher costs to the retailer in spare parts on the shelf, higher number of disappiontments from drivers when they find that the shop does not have the part they need on the shelf, higher cost to try and promote karting because of the number of different classes, absolute total confusion to any outside person who wants to become involved in karting, which means fewer competitors and the wheel starts again.What does everyone else think the answer to these problems are?

[Gemma]

Should have read, 132 different classes in the US, sorry about that.

[Nick Weil]

Stephen,

I guess it's only misguided loyalty, if your local kart dealer won't help you out at the track and in your time of need.
If the guy in the U.S. you buy your part from can give you all the answers to all your questions, all the time, and get you all your parts when you need them, i.e. 10 minutes after your heat race while you are trying to prepare for the feature because you broke something. Only then is your loyalty misguided.
If the cheaper guy is saving you $$ and you don't feel guilty when your local guy closes shop because no one buys parts locally, then yes your loyalties are misguided. You are saying your loyalty is to your pocketbook and not about support and help offered. That is your choice, not wrong or right. But who will scream the loudest when no one at the track will borrow you a part so that you can race? Since there won't be anyone there to sell you parts.

Ray,
If you moved to the US and wanted to run the RMC your motors could be resealed by that Region's Distributor and then you would be legal. If that Distributor wanted to do such a thing, it would be his discretion. If you did not want to run the Challenge it would be up to your local club. Chances are they would say race those motors. It would cost you nothing in that case.

Keep in mind too that with the RMC that if you are good enough to finish top five in the Challenge at the National level, Rotax pays for you and your mechanic to fly to Malaysia. And they are doing that in (34) regions...

(34) Regions x (5) top finishers = 170

(170) drivers + (170) mechanics = 340

(340) airfares to Malaysia x ?? = $ A WHOLE LOTTA CASH

Not a bad gamble for a $2000 motor. Not to mention the racing is fun once in a while

my pair of pennies

Nick

[Andy Seesemann]

Ray,

Now based on your $150 figure, don't you think a business should earn more than 3-5% profit? Don't you think that it is foolish for this distributor to make 3 pennies on the dollar? Unfortunately, for some reason we expect this from karting businesses. Does anyone else make a margin of this infintessimal amount in their businesses?

ANDY

[Glenn Holland]

Yes, racing websites.

Andy has an excellent point - karting needs to be an attractive proposition for any business or it will forever...blah, blah, blah.

G.

[Gemma]

In my humble opinion, a retail karting business should be making between 30%-35%. Give these guys a break, they also have families to support just like you and I. I was not saying that I would not buy 2 new engines, I was just asking the question. I think the price of some things are set by the country they come from, as an example, I know of a competitor in RMax,who has imported 5 new engines, the cases do no have our stamp on them, so he is unable to race them. He does use them for development, practice and spare parts. Total cost for the 5 engines in this workshop, US$4125

Ray

[Oscar Aguilera]

For any business to succeed year after year you need to NET no less than 25%. On some parts it is a 35% mark up and on some it is a 5% mark up. The problem lies in that the larger ticket items pay the bills(chassis) and the smaller ticket items make the money.(parts) If a dealer only sold parts and no chassis there would not be as great a problem for the dealer. You then won't however be able to go to that shop and see a chassis because the dealer will order as needed. IMO you can buy your chassis anywhere and come to me for help and parts. If the customer starts buying all there parts somewhere else than the dealer will have a bigger problem and his stock will start to be "I'm out of that part but I can order it for you". Why? You can order it yourself and have it delivered to your door.

The other area of making $$ in karting is labor. If every tom george and harry sells chassis and can not service the motors they will not succeed. If they can't set up a chassis and offer advise they will not succeed.
This is the main problem IMO in the current karting market today.
There are too many "little" guys that don't have the expertise to be a full service shop. In all fairness these shops can develop over time and offer competition to the existing shop which is great.(this is contingent on how deep their pockets are)

I can go out on my own right now and import any chassis that is not out in the US market today and would have limited success with out a large budget to put my chassis out in front or even on the track.(chassis don't go without the motor) If I was a chassis guru without the motor and parts end of it, all my work would be to break even if I was lucky.

People wanting to get into any business on their own need to know every facet of that business from cleaning the floors efficietnly to knowing all the laws and permits needed, to customer service and expectation. You have to know what it costs to put a $20 part on the shelf and hold it for 3 months. Only then can you make a mark up and only then can you learn inventory control.
Your distributor must protect you the dealer that he or someone else won't obsolete your inventory with lower prices or newer products. This is just the nature of any business.
Karting is a very competitve industry and without extensive knowledge of the product and the sport, a shop will not survive. You have to at least know how to "sub out" the areas of karting that you know the least of and still be able to mark this job up and be price competitive.

The price we sell Rotax motors for, is what we have been dealt. You can go anywhere in this country and buy one for the same price. If the chassis manuf. that you prefer is not offering a Rotax package than you should be up set. SSC offers an excellent package with a name brand and Brembo brakes to boot. If any other manuf were able to sell there kart as a Rotax package at a lower price than they should do so. If the price of the motor is to be a "fixed" one than the area of price needs to be addressed where it is variable, the Chassis.

You can count on one hand the number of importers that import one chassis brand exclusively. Any one that offers multiple lines of chassis or buys their chassis from a supplier here in the US is a Dealer, and maybe they also import limited quantities. To have the stock and parts to import any item is a great investment. To import for the country is a huge investment.

If you choose to import your own motor knock yourself out. You wanna race in our area we'll stamp seal it for you. As this series explodes than the price may come down in the states or the price in other areas will rise.

[bird]

quote

Quote:

The price we sell Rotax motors for, is what we have been dealt.

so you guys are in effect saying that Rotax sell you the engines for $500 more than they sell them to other countries? That is a disgrace.

quote

Quote:

Give these guys a break, they also have families to support just like you and I.

So do the retailers in every other country

[Bill Wright]

The price differential is easy, folks.....

IT'S CALLED THE EXCHANGE RATE!!

Let me say that again.....

IT'S CALLED THE EXCHANGE RATE!!!

How many times do we have to see this U.S. Max engine price thread? Hasn't anyone noticed that the SAME PEOPLE keep bringing it up over and over again? DUH?? Don't you wonder why?? It SHOULD be getting pretty obvious by now??


I can buy Italian chassis for $1000 U.S. all day. But only as long as the exchange rates stay at current levels.


When the guy from Australia told you folks about the $100 Bridgestone tires I didn't see ONE of you whining about that, yet you are paying almost TWICE that amount for the SAME tire? But hey, you only buy those for almost EVERY race you do, so why should you be worried about that, huh? I mean gosh, that would only save you THOUSANDS of dollars every year, year-in and year-out, why would you focus on THAT so called "overcharge" ??.

Tom, you were right!!

Support you local karting retailer!

Now, one more time, just in case you missed it.......

IT'S THE EXCHANGE RATE!!

Bill Wright www.formulakart.com
"Get on Course!" with FK

[Chad Stapleton]

Ok Bill, so explain how the EXCHANGE RATE causes 25% hike in cost ????