Wheego shops for dealer network

Inland SoCal (The Biz Press)
By Chris H. Sieroty
August 9, 2009

As local auto dealerships continue to close their doors because of declining sales brought about by the recession, Wheego Electric Cars is looking to acquire select dealerships for The Whip, its new plug-in,
electric low-speed vehicle manufactured in Ontario.

Company executives will embark on a nationwide tour beginning Aug. 18 to promote the launch of their new product.

The company has scheduled stops in 40 cities, including Ontario and Palm springs in September, according to Jeff Boyd, president of Atlanta-based Wheego.

Over the past 18 months, 15 dealerships have closed in the two-county region.

“We already have approximately 15 dealers committed to the Wheego brand around the country,” he said. “We are reviewing applications from several dealers in Southern California right now.”

Boyd admitted that it will cost his company a “substantial amount” to establish a dealer network, but the budget was “confidential.” He also declined to identify any potential dealerships in Riverside or San
Bernardino counties.

“The reaction from dealers who have driven the car is that it’s the best electric car in its class,” he said. “I believe that every dealer who sees the car will want to secure a Wheego franchise in their area, and
we plan to make it easy for them to do so. Dealers need product, and dealers want to go green.”

Boyd said potential dealers have understood that “we have cars to sell today” and they don’t have to wait until 2012 to receive an order of electric cars.

Both Tesla Motors and Fisker Automotive have established dealer networks to sell their electric vehicles.

Based in Irvine, Fisker has begun production of its 2010 Fisker Karma, a four-door, four-seat sedan that is the world’s first luxury plug-in hybrid car.

The emission-free Karma can travel up to 50 miles on a full charge from any 110-, 220- or 240-volt electric outlet. A total range of up to 300 miles is estimated in Sport Mode, which utilizes a gasoline engine to turn a generator that powers two electric motors.

With a starting price of $87,900, about 1,000 orders have been placed for the luxury plug-in hybrid, according to the company. Fisker, which was formed in September 2007 as a joint venture partnership with Quantum Technologies, anticipates its initial production to be 15,000 vehicles annually.

So far, Fisker has a nationwide network of 45 premium-brand retailers, including Serra Automotive in Pasadena, “but nothing in Riverside or San Bernardino as of now,” said Russell Datz, vice president of sales and marketing. Other Southern California locations include Marvin K. Brown Auto Center in San Diego, Shelly Automotive Group in Irvine and Sullivan Luxury Cars LLC, with locations in Beverly Hills and Santa Monica.

Datz said there are always challenges to establishing a dealership network for a new vehicle, especially a high-end, luxury brand.

“The Fisker Karma looks like a traditional luxury sedan which has helped us tremendously in terms of interest from potential dealers,” he said. “But it’s a new vehicle, and it’s unproven in the marketplace, which carries some risk for potential dealers.”

Datz said the company was successful in signing dealership agreements thanks to Vic Doolan, Fisker’s director of retail development.

“He was instrumental in bringing on dealerships,” he said. “Vic has had years of experience as president of BMW North America and Volvo Cars North America. He’s been our biggest asset and has used a lifetime of relationships to establish relationships with dealers.”

Priced at less than $19,000, The Whip has a range of 50 miles on a full charge and offers a full-size interior with air conditioning and heater, front wheel drive with four-wheel disc brakes, and a stereo system. The cars are 118.5 inches long, 63.2 inches wide and 62 inches tall with a top speed of 20 mph to 25 mph and are limited to streets with 35 mph or lower speed limits.

Boyd said with a well-established electricity infrastructure nationwide, consumers should have no problems recharging their electric vehicles.

“The Whip requires a 110- or 120-volt charging from any standard electrical outlet,” he said. “Most people will drive The Whip during the day and recharge it at night when they get home just as they do with
their cell phones.”

There is also a 10 percent federal tax credit on the purchase price of the car as a low-speed vehicle this year. When The Whip is eventually certified and sold as a full-speed car, the federal tax credit will be
$7,500, the company said in a statement.

“We don’t believe we have any competition for a car-chassis-based low-speed vehicle or medium-speed vehicle,” Boyd said. “We also think we’ll be first to market with a highway-speed vehicle next year.”

The company expects to sell 500 to 1,000 electric cars per year. Wheego expects to sell a similar number of highway-speed electric vehicles when they are introduced next year. The numbers seem achievable considering that 77,000 low-speed electric vehicles have been sold nationwide in the last 10 years, according to the company.

Wheego Electric Cars is the second electric automobile company to produce vehicles in Ontario. Phoenix Motorcars Inc. established its Ontario manufacturing facility and design center in 2002. Messages left with Phoenix spokesman Bryon Bliss were not returned.

Phoenix produces zero-emission, freeway-speed all-electric vehicles that use lithium titanate batteries, which eliminate toxic vehicle emissions, according to information posted on the company’s Web site. The company plans on introducing two models next year priced around $50,000 — a four-door electric sport utility truck and a four-door sport utility vehicle.

The company’s marketing strategy targets fleet operators in California, particularly electric utility companies, universities, and municipal and state fleet operators. California represents a $10 billion market with 225,000 new passenger cars and light-duty trucks sold as fleet vehicles annually, according to information posted on the company’s Web site.

“We chose Ontario to produce The Whip because of (local) engineering expertise and it’s close to the port of Long Beach,” Boyd said. “It also is located in the heart of a large potential market in California for
electric cars.”

CEO Mike McQuary said the company assembles the electric car at a facility in Ontario from components sourced from suppliers around the world.

“We consider The Whip an American-made car,” he said in a statement. “It is made with American technology and ingenuity, and more than half of the cost of the car is from North American parts suppliers.”