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Tailpipe dragging on car market


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02:09 PM PDT on Thursday, May 1, 2008

By JAHMAL PETERS
jpeters@thebizpress.com

First quarter new-car and light-truck registrations were down almost 19% in the first quarter from the same period a year earlier, according to the California New Car Dealers Association.

Few local car dealers hawked their wares at the Inland Empire Auto Show April 24-27 in Ontario.

But not every vehicle maker is feeling the pinch of the slow market.

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Photo By Dan Elliott
Joseph Shiller, national director of sales for Quicksand Performance with a sand rail at the Inland Empire Auto Show in Ontario.

Zero Motorcycles in Santa Cruz builds electric off-road motorcycles and began shipping them in January.

"With gas at $4 a gallon, it's perfect timing to come out with an electric vehicle of any type," said Gene Banman, chief executive officer. "We're in production, we're shipping and the market is being very receptive."

The company expects to ship "several dozen" units in the upcoming months and several hundred by the end of the year, Banman said.

Zero Motorcycle's clientele consists of individuals with large disposable incomes, Banman said.

"Middle-age wealthy guys with five motorcycles, Zero being their sixth one," he said.

While Zero is optimistic despite the state of the economy, other companies have seen their sales decline.

"As far as our market is concerned; it's soft, it's down by about 25% of where it was two years ago," said Joe Shiller of Quicksand Performance Products.

Quicksand sells high-end off-road vehicles as well as parts and kits.

While sales are in steady decline, the bulk of the company's clients are international, Shiller said.

"We actually sell the majority of our cars overseas in Dubai and Saudi Arabia," he said. "We sell about 350 cars a year in Dubai, that's where our biggest business is. In the U.S., we hit 100 last year. It pales in comparison to the overseas market."

"It's a different breed out there, they have a lot more sand, a lot fewer restrictions for EPA and CARB, and they have a lot of money," Shiller said.

Quicksand customers include firefighters, police officers and independent business owners.

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Jer Stewart, events manager and marketing communications director for Zero Motorcycles, stands in front of an electric motorcycle that can run on both street and off-road conditions.

"We get people all the way from Oregon down to Mexico out to Arizona, Nevada and Utah, he said.

The Midwest and East Coast have little sand. "We don't really get them in our market as much."

Quicksand sand rails retail for $28,000 to $101,000. Local buyers shy away from the higher-end vehicles, Shiller said. To boost domestic sales, Quicksand partnered with Yamaha to introduce an all-terrain vehicle designed and manufactured by Yamaha but sold under the Quicksand brand.

"We started marketing quads to bring in lower-dollar items," Shiller said. Quicksand designed an all-terrain quad based on the Yamaha Raptor 250 but it's $1,000 less."

Despite waning domestic sales, Quicksand's foreign sales have bolstered several expansions.

In July, Quicksand moved to a 100,000-square-foot plant in Long Beach following five years in Santa Ana and another nine years in Huntington Beach.

"We've had to continually make the facility larger and larger," Shiller said. "People are still definitely making sales, it's not horrible, it's just not as good as the best times we've had."

Zero plans to market its electric motorcycle overseas in the coming year to meet demand.

"The dirt bike business is huge in Europe and they're very green-oriented there," Banman said. The Euro is so strong, a product exported to Europe will have a low price."

Large car makers have felt the economy's pinch.

At the Inland Empire Auto Show at the Ontarion Convention Center, manufacturers touted hybrids and smaller, fuel-efficient vehicles.

The Ford Focus has seen a 35% increase in sales, said Octavio Navarro, a spokesman for Ford Lincoln Mercury.

"The housing market created a credit crunch, so now getting a car loan is a lot more difficult," Navarro said. "Because of mortgages people have less disposable income to buy new vehicles, a lot people are delaying purchases right now."

For 2010, Ford plans to introduce a new Fiesta, which is even smaller than the Focus, Navarro said.

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