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Title: Tricycles for Grownups? Cross a motorcycle with a small car, and you get a new kind of hybrid -- the three-wheeler
Source:
bizweek
URL Source: http://www.businessweek.com/autos/c ... os_autos+index+page_autos+lede
Published: Feb 27, 2006
Author: Serrill-Robins is an intern for Business
Post Date: 2006-02-27 08:11:47 by continental op
Keywords: three-wheeler, motorcycle, Tricycles
Views: 11559
Comments: 1
Auto makers -- even some big ones, like Daimler-Chrysler's (DCX) Mercedes-Benz -- have been developing car-motorcycle hybrids and other three-wheeled vehicles for years. But what's different now is that some of these concepts, such as the Volkswagen GX3 unveiled this month at the Los Angeles Auto Show, could actually make it to the marketplace (see BW Online, 1/12/06, "Concept Cars Are Getting Real"). And the GX3, backed by VW's global distribution capability, would stand a chance to develop a niche market. Advertisement Three-wheeled vehicles of one kind or another are quite common in the developing world, and were familiar sights in European countries as recently as 20 years ago. In emerging markets, three-wheel vehicles are basically large mopeds, according to Sam Fiorani, forecast manager of research firm AutomotiveCompass. The concept of three-wheelers is, in fact, as old as the modern car itself: The first gas-fueled car as we know it today, patented in 1886 by Karl Benz, had only three wheels. The jet-powered Spirit of America three-wheeler recorded a time of 566.27 mph in 1964. Three-wheeled and other small vehicles rose in popularity in Europe when the 1956 Suez crisis made gas prices soar. "THE FUN FACTOR." British manufacturer Reliant was one of the last Western auto makers to offer three-wheelers in developed countries, something it ceased to do in 2001. Before that, its three-wheeled offerings had sold largely because of their low price, Fiorani says. The new wave of three-wheel concept cars is different, however, in that these are described as motorcycle-car hybrids -- the best of both worlds -- with the speed of a motorcycle and the stability and cornering of a car (see BW Online, 1/6/06, "VW's Three-Wheeler: For Real?"). According to Volkswagen of America spokesperson Tony Fouladpour, the GX3 is officially classified as a motorcycle. Operating one would require a motorcycle license and could qualify the rider for carpool-lane access, a privilege afforded to all motorcycles in California. A motorcycle classification allows vehicles to make it to market without some of the complexity cars face due to environmental and safety standards. Joachim Ebert, vice-president of automotive practice at management consulting firm A.T. Kearney, is skeptical. "These vehicles combine the disadvantages of the motorcycles with the disadvantages of the car: They are not as agile as motorcycles, and they don't offer the comfort of a four-wheel passenger car," he explains. "It's certainly not something you could use every day. It has the fun factor: You could enjoy it on the weekends." BRAND REINVIGORATION. In fact, Ebert says that uncovered moto-car hybrids have a very specific target buyer: men in their late 20s or 30s (or older men going through a midlife crisis), with a fair amount of disposable income, living in warm, not-too-rainy climates. The three-wheeler would be a third or fourth vehicle -- a fashion item. VW's Fouladpour says that Southern California is certainly the GX3's primary market, although, if produced, the vehicle would be available at VW dealerships all over the country and probably the world, with some differences in price and options. Ebert predicts that even if Volkswagen gets enough support for its entry to the three-wheel race to go ahead and mass-produce the GX3, it will be a limited-release item that may sell a few thousand units. Other manufacturers are unlikely to follow the mass-production move - they've all probably done the market research and decided against it. According to Ebert, Volkswagen has its own reasons for releasing the three-wheeler: Lots of GX3s on the road would generate excitement in the first year, and VW needs that attention to reinvigorate its brand, which many auto buyers perceive as boring (see BW, 7/25/05, "Volkswagen Brakes for Epic Change"). Fouladpour agrees that after 2005, a year in which VW sales fell 12%, it was important for the company to make a statement early in 2006. VW did just that, presenting its prototype and giving a ballpark price of $17,000. Chairman Wolfgang Bernhard has said that a final production decision on the GX3 won't be long in coming. Still, despite the need to breathe life into the brand, VW wouldn't build a product unless it believed the new vehicle would create profit for the manufacturer and dealers. According to Fouladpour, since the GX3 really is a motorcycle, VW expects its primary competition to be high-end motorcycles rather than cars. TINY-CAR INVASION. The recent past shows that comparable concepts that make it to market are not the heavy hitters their manufacturers expected, including the ZAP Smart Car convertible (which faced similar problems to the topless GX3) and BMW's roofed motorcycle. Ebert suggests the three-wheel moto-car may compete with the BMW Mini, another vehicle bought by many as a fashion item rather than a primary source of transportation. As the popularity of gas-guzzling SUVs ebbs, other tiny cars are slated to hit the American market, including the Toyota (TM) Yaris, which has become popular in Europe since its 1999 launch. The Yaris will arrive in the U.S. this spring, with prices starting at $10,950. Fuel-conscious Americans may take to the small four-wheelers, but whether they'll be willing to give up one of those wheels to satisfy the need for speed is another question entirely.
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#1. To: continental op (#0)
Our pResident is setting the standard.
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