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Kart Racing Market: Not Suitable for Backyards

Can adding a kart line boost the bottom line?

Karting Industry Council executive director Ray Verhelst says that in a good year there are 80,000 kart racers in the U.S., and in a bad year about 60,000. But experts admit that putting a figure on the number of karters is difficult. Kart racing is a very diverse sport, but essentially, there are three different forms of kart racing with many variations of classes in between:

• Sprint racing is a sophisticated, yet affordable form of racing. The race courses are smaller-scale versions of car-type road courses. Closed-course karting facilities range in lengths from 1/4 to just over 1/2 mile, with an occasional race being held on city streets!

• Road racing, also known as Enduro racing, is the long-course version of karting. Enduro karts race on tracks like Daytona, Laguna Seca, Road America and Mid-Ohio. Some Enduro racers lay almost completely flat on their backs for a low center of gravity and better aerodynamics. Races typically last from 30-60 minutes. In road racing, as in sprint and speedway karting, there are classes for everyone from stock 100cc to pros using dual-engined or 125cc "shifter" motors.

• Speedway racing is what karting calls oval track racing, whether it’s on dirt or asphalt. Sideways racing action on specially built oval karts is what it’s all about here. Short ovals, 1/10 to 1/5 mile in length, look simple, but offer quite a challenge.

Karting and Powersports

John Giacomelli of J3 Competition, importers for Kosmic kart chassis and Vortex engines, says despite its apparent similarities, karting is not necessarily a natural fit for a powersports dealer. “One of the reasons I think it’s difficult is because you can’t take a kart out on the road like you can a motorcycle — you have to run on an appropriate kart track. You can’t easily test drive one unless you have a dedicated area for it. If you think about a motocross bike, for example, obviously you can ride on trails or in your backyard if you wanted. The bikes may be built for racing but you can ride them anywhere. A racing kart isn’t like that.” Giacomelli points out that many people buy motocross bikes just to ride them without planning to race them. “If I bought a bike, I might not race it but I would still enjoy riding it for fun.”

Verhelst says that KIC has expanded recently to include a wider range of performance karts. Indoor karting has been big business in Europe, and many karting centers have popped up in the U.S. as well. Verhelst says that performance karting is really the term for today’s higher-end karts, whether it’s an outdoor full-bred race kart or a speedy rental kart that can easily exceed the old fairground bumper-kart speeds.

Suzanne O’Neal says her husband Kermit has been in the dealership business for over 30 years. Currently, the O’Neals own Alamo-BMW/Triumph motorcycles, Alamo Karts and Alamo Sports Cars. Alamo started out as a European sports car dealership and service center (Alamo Sports Cars),  which featured such marques as Triumph, Fiat, Alfa Romeo and others. As the market evolved, and these brands left the U.S. market, the Alamo dealership took on motorcycles to broaden their range.

“We now sell BMW and Triumph motorcycles,” says Suzanne O’Neal. “Kermit has continued servicing European sports cars as well as restoring and racing vintage cars. A couple of years ago, we developed the project to build a new store with the go-kart track. As the vintage racing circuit is aging, it has been harder to attract youth to the sport and to find mechanics that can work on the old cars. Current race drivers are coming out of karting, hence the interest in having a track to bring youth into racing.”

The Alamo Kart track operates out of the same facility as the Alamo BMW-Triumph dealership, which features a 1/3 mile, 24-foor wide road course. Suzanne says they use Rimo Alpha karts with 9-hp Honda engines, which are very reliable.

“We run the karts on propane as it is cleaner and causes less wear on the engines,” says O’Neal. “We also sell Rotax/CRG karts. This is a smaller element of the go-kart business as kart sales have been affected by the downturn in the economy, but we maintain a club of kart racers who use our track for practice. We do not host points races, even though the track is large enough, as we do not have adequate paddock space, and we are in a neighborhood with noise abatement considerations.”

O’Neal says that having the kart sales and the track complements the motorcycle business. It brings traffic to the store that might otherwise not come, and it offers an additional attraction for our motorcycle clients who can combine waiting for service with some hot laps.

“We’ve got 20 karts that we rent, which is the bigger portion of what we do with karting,” says O’Neal. “We do arrive and drive programs, league racing, corporate events. We have club members who buy our Rotax karts and store them here and then come out and use the track. So it’s a club track, mostly. We don’t run any races because we don’t have paddock space to do it. The track itself is big enough, however, to run races.”

The rental karts Alamo uses are Rimo’s, a German brand that is sturdier than a racing kart, and can go about 35 mph. Alamo gets its karts and barriers from F1 Boston, U.S. distributors for Rimo. Sodi and Birel also offer rental karts and racing karts.  Alamo is also a CRG and Rotax dealer and an authorized Rotax rebuilder.

“I would say it is not a good fit for everyone to sell karts as well as traditional powersports, but since we have a track here it makes sense for us,” says O’Neal.

J3’s Giacomelli says he would definitely entertain the idea of a powersports dealer selling his products, but it would depend on the situation. He says there is traditionally a buy-in for getting started, which is pretty standard for most karting distributors.Giacomelli says they do have territories, but the market is so small and segmented that those lines are getting blurred. “Years ago, it was the norm to have a territory, but now most distributors sell to whomever they want,” says Giacomelli. “There may be two dealers at the same track, but they know different people and have a different circle of friends who may be interested in kart racing.”

Experts say that karting is essentially a cottage industry. Many kart dealers don’t operate as standard businesses, as they are often times running their karting business on the side or on weekends from their garages and trailers.

Giacomelli says the best dealers are able to go to the track to sell or have a presence there in some way. “A good kart dealer should be at the track or very near a track,” Giacomelli explains. “If a motorcycle dealer is located in Kansas, there’s really no tracks within 400 miles. But if a motorcycle dealer is in Pittsburgh, our area, or north of Pittsburgh, and Beaverun is 20 miles away, then it makes more sense.”

J3 Competition sells OTK (Original Tony Kart parts). Giacomelli says they sell to a lot of dealers even though they only have about 10 dealers for their Kosmic kart chassis line, and they also import Vortex engines. “Dealers might not buy OTK and have some other brand of chassis, but they want to sell Vortex so we do it,” says Giacomelli. “I sell a lot of OTK parts to Tony Kart dealers all over the country. The Kosmic chassis is identical to the Tony Kart, the only thing different is the colors and the decals, and it’s branded differently.”

Tony Kart is the biggest karting manufacturer followed by CRG and Birel. Most of the top sprint kart chassis are made in Italy, says Giacomelli.

KIC’s Verhelst says that powersports dealers don’t have to necessarily sell karts to be involved in the karting market. He says that during the summer on any given weekend there are 10,000 karters running an event in the U.S. Verhelst also points out that the No. 1 age group for karting is 9-15 and the No. 2 age group is 28-44. In addition, more than 60 percent of kart racers run 20 or more races a year. At a recent Rotax Grand National event, Verhelst says that there was over $25 million worth of vehicles in the parking lot including scooters, ATVs, golf carts and motorhomes. Verhelst believes there is a lot of opportunity for powersports dealers to capitalize on karting through things such as at-track promotions, sponsoring a class or simply adding a few karting accessories to your product mix. But the key is to get out to the kart racers and to be known as a kart-friendly powersports dealer. Kart racers may be looking to buy a lot more than karts from you. And with 100 outdoor kart tracks and 130 indoor kart tracks, there are enough opportunities for the right powersports dealer to get involved.

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