In a recent article for Industry Week, Paul Ericksen, a veteran of supply chain management and a self-described executive level consultant, points out that “strategic changes do not always happen from the top”, which actually is the tile of his article, which you can access here. In this column, I suggest that Club Car has taken a turn that could be strategically significant: Going outside the confines of Augusta to partner with AER Technologies in bringing AER’s 4ll to market under the Club Car brand name.
I interviewed Brian Rott of Cart Mart (based in San Marcos, CA) who is introducing the 411 into his product lineup, with regard to market segments he foresees as fertile ground for sales growth. Brian is one of the most innovative dealers Club Car has and a clear of example of creating and promoting a step change in small vehicle strategy.
Innovation, new strategic direction, and the problem at the top
In the article referenced above, Eriksen’s thesis is that, contrary to conventional thinking, very often it is top management that restrains company growth. He states, “…executives at large corporations are reluctant to pursue significant change,” and further notes, “…and they set tactical organizational metrics that stifle significant change.” (Emphasis is mine.) Note, they, top management, set out tactical, not strategic metrics.
Eriksen differentiates between increment changes and step changes. The former are small, safe adjustments, whereas the latter are more fundamental directional changes involving considerably more risk. By nature, we as humans and we, as collective functionaries, are risk averse, which makes new strategic direction all the more difficult to achieve.
A momentary blip or new market approach?
As readers of this column will know, I have been consistently pointing out the potential of the urban mobility market, encompassing both consumer and commercial vehicles. So, it was with great interest that I read of Club Car’s partnership with AEV Technologies, based in Austin, TX.
The genesis of the vehicle—with the Club Car nameplate–is also interesting and a departure from Club Car’s usual, in-house product development and manufacturing strategy. Here is the overview, followed by an exclusive interview with a major Club Car dealer on the West Coast, Brian Rott, giving his thoughts on how the vehicle fits into his sales and service strategy.
Club Car 411 Overview
Earlier this year Club Car introduced the Club Car 411 utility vehicle, an all-electric vehicle for cargo services and low speed logistics. As noted, the 411 is the result of a partnership between Club Car and AEV Technologies, a manufacturer of light-duty battery-electric vehicles. The partnership combines AEV’s expertise in design and manufacturing with the dealer network and brand power of Club Car.
The question is, is this a blip on Club Car’s strategic radar or the beginning of an entirely new approach for Club Car’s product and market development strategy? It can be noted that AEV Technologies also produces the 311, a three-wheeled “commuter” vehicle for the consumer market, and the 511, a 4WD upgrade in capabilities relative to the 411. Will the Club Car connection extend to these vehicles, as well?
Interview with Brian Rott, President of Cart Mart, Inc.
Under the guidance of CEO Brian Rott, Cart Mart has expanded from its beginnings in San Marcos, CA to now four dealerships throughout California’s Southland. Cart Mart is an authorized dealer for Club Car, Yamaha, Garia, and Polaris GEM. Cart Mart will be adding the 411 to its vehicle offerings.
NEW DIRECTIONS: Brian, what is it you particularly like about the 411 as a utility vehicle product?
Brian: The new Club Car 411 addresses a market of commercial users seeking a more automotive fit and finish, packed inside a small electric LSV. For short distance loads the 411 provides a great solution to a car or truck.
NEW DIRECTIONS: Brian, I know you have a well-developed business on the commercial side. How does the 411 extend or enhance this side your business?
Brian: We’ve been selling into the commercial space since Day 1 and have always taken great pride in aligning ourselves with innovative manufacturers who understand what the customers need and where the industry is headed. The 411 enhances our product lineup to the LSV category which is growing steadily.
NEW DIRECTIONS: What are the market segments that, in your opinion, the 411 would appeal to in particular (e.g., municipalities, warehousing, construction, agriculture, etc.)?
Brian: We will likely see the 411 thrive in the educational vertical (colleges and universities) but also a vehicle like the 411 could open up new markets for the delivery of goods and services in urban and high density neighborhoods.
NEW DIRECTIONS: Do you see the 411 substituting for ICE vehicle, i.e., pickup trucks, primarily, or do you see a unique market niche developing for it?
Brian: Absolutely. The category of small task oriented vehicles is growing fast and small vehicles, especially LSV’s like the 411, are eating the automotive industries lunch. Albeit we are only taking the crumbs, but soon it will be a larger bite of the sandwich.
NEW DIRECTIONS: And what about gated communities, will the 411 have a market in this segment?
Brian: I’m not betting the 411 will start showing up in my neighborhood, or yours, anytime soon. Unless of course, it’s carrying my wife’s Amazon prime packages.
NEW DIRECTIONS: Have you had any early customer reaction to the vehicle?
Brian: Most of the response we’ve received has been very positive. Most notably, the styling, capacity and features are all impressive.
NEW DIRECTIONS: I believe the vehicle is powered by six 12-volt, VRLA sealed batteries. Is there a lithium battery option for the vehicle? If not, would it not be desirable to have one? (Reduces weight, adds to range, faster recharge.)
Brian: Lithium Ion is the wave of the future and most certainly will be available in time, hopefully by 2020.
NEW DIRECTIONS: Brian, you have been supporting recent California State legislation, which encourages local communities and municipalities to include low-speed vehicles in their transportation systems planning. How might the 411 enhance the prospects for the adoption of LSV-friendly systems?
Brian: The 411, and other vehicles like this, will grow to become more relevant in both commercial, consumer and municipal uses. So, it’s only a matter of time until we see these vehicles showing up on street corners throughout America. It’s going to take a little time, and a lot of work, but there’s no doubt that governments everywhere, including California, will make room for these vehicles. It only makes sense.
NEW DIRECTIONS: Thanks Brian, and best of luck with the 411. We will be checking back with you at next year’s PGA Show.
SVR’s evaluation of the 411
Pros: Nicely configured for college campuses and industrial/corporate parks, and gated community utility vehicle functions, and is fully weatherized for all season use.
Cons: Does not feature lithium power, possibly because of cost considerations. The lead acid battery pack has only a two-year warranty, as well.
Success in the marketplace will depend on the sales efforts of local dealers. Many dealers in the Club Car dealer network have as their principal focus the consumer market, largely a walk-in sales experience. The commercial segment is, by contrast, a “go-to” type of market. External salespeople will be required. Success will also depend on Club Car management’s willingness to put an investment into dealer training and liberal inventory financing.
Brian’s vision and new strategy direction from the bottom up…
Brian’s vision can be summed up in his words, “…we see these vehicles showing up on street corners throughout America.” And when the 411 is delivering Amazon Prime packages to Brian’s wife, you can bet this type of vehicle will be doing just that.
This an example of an unusual partnership that may well be develop into a full-fledged, new market direction for Club Car. With creative dealerships, such as Cart Mart, pushing the envelope, the possible new direction could become a major reality.
