Issue link: http://read.dmtmag.com/i/772602
FOCUS PSB Outlook 2017 14 • January 23, 2017• Powersports Business www.PowersportsBusiness.com 6% 3% 4% 5% 11% 8% 11% 3% 30% 22% 8% 22% 24% 29% 29% 24% 25% 68% 24% 38% 68% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall economic conditions Government regulations Weather Consumer confidence The new presidential administration 1 - Not important at all 2 3 4 5 - Very Important HOW IMPORTANT DO YOU EXPECT THE FOLLOWING TO BE TO YOUR COMPANY'S SUCCESS IN 2017? PLEASE RANK ON A SCALE OF 1 TO 5, WHERE 1 IS NOT IMPORTANT AT ALL AND 5 IS VERY IMPORTANT. "Consumer confidence with the political chaos that might happen." "Electronic marketing need for consumer. Youth addictions to cell phones and social media. Guarded optimism. Zinger from the president." "Uncertainty with government change." "General lack of consumer confidence and flagging enthusiasm for powersports products." "People, especially young people, don't care." "Our customers are getting very old." "We are an Arctic Cat dealer, and the factory is struggling with everything from delivery quality, up to date product, as well as their image is tarnished." "Cold winter to start the new selling season." "Government regulations." "Buyers with good credit." "Less and less people seem to be riding motorcycles." "Consumer confidence." "The younger (40 and under) generation has left our older generation's (50 and above) way of life." "Motorcycles/ATVs seem to be 'invisible' as a market to the consumers under age 50. Motorcycle companies need to work together to promote motorcycles to the U.S. consumers." "Japanese OEs need to get better product in the two-wheel business. They lack the ability to make a product that attracts Gen Y customers." "Getting customers back to work." "Farm economy." "Economic changes and conditions, and internet sales." "Too many competing dollars in my market area." "Government regulations, being scared to want to even grow and take risk." "Dealer profitability — due to extreme price discounting by several major Polaris dealers and eroding pricing in the G&A." "Exposure to potential qualified customers." "Continued hype of the new administration." "Dealers selling into holdback, a problem that gets worse every year." "Trying to keep the OEM from overloading me with inventory and trying to maintain a fair profit margin on what I sell." "Keeping qualified people." "Arctic Cat trying to overload me and put me out of business." "Trying to get out of business with Arctic Cat." "Not having enough interested consumers in the product in the first place." "OEM leadership, the economy, engaging more people to ride." "Getting younger buyers." "Expense control, i.e. health care, salaries, etc." "King Donny is going to do 3 things: 1. Raise the price of fuel; 2. Raise mortgage rates; 3. Start a war." "Is this side of my business even worth bothering? It has become nothing but a cutthroat business." "People." "Staying in business." "Finding help that wants to work." "All the recalls and reliability issues with OEMs, especially Polaris." "Demographic shifts and sustainable growth." "Trained employees." "Winning the consumer's dollar. Not only is our industry changing to internet retailers, there are so many options for our customers to spend their discretionary income." "Finding help that has a good attitude and work ethic." "Baby boomers starting to pass." "What the OEM will do with pricing and margins. They are finally posting the shipping cost of the vehicles, but they are also making profits off them, and we cannot make anything." "Interest rates and finance options." "Distribution companies change management who believe this industry is same as selling soap or clocks. Tight credit." "Product availability." "Companies trying to control dealership operations." "Given our Minnesota location and niche, the weather always has a large impact on our spring rush." "Competitiveness of our OEM." "Extreme discounting on major units." "Kawasaki's lack of new product in the ATV, side-by-side and cruiser segments." "OEMs (Honda) not being in tune with retail wants and demands." "Democratic lefties." "Lack of large cc bike sales." "Profit." "I am starting to gain more confidence daily; My biggest concern for 2017 I think will be rising interest rates and consumers' ability to borrow." "Dealer vs. dealer competition." "Economy and weather." "Motorcycle business is dead. ATV is dying. Side-by-side is good, but profits are bad." "The stability of the marketplace as a whole." "Local economy." "Lack of interest in bigger motorcycles on the street side." "Internet competition and shrinking margins." "We don't need a trade war, which would drive up prices." "I'm feeling pretty optimistic at this point." "Low profit margins, especially on Polaris product." "Finding good employees. Most of the ones that quit left the industry, and young people are not that interested in motorcycles." "Ag income." "Attracting business to a new store location." "Lack of new entry level customers." WHAT IS YOUR BIGGEST CONCERN HEADING INTO 2017? WHAT ARE YOUR REVENUE EXPECTATIONS FOR 2017 COMPARED TO 2016? Up more than 25 percent 5% Up 10 to 25 percent 31% Up less than 10 percent 39% Flat 19% Down less than 10 percent 1% Down 10 to 25 percent 5% Source: Powersports Business "Not competing with exporters on purchasing powersports for our dealership." "Value of the dollar." "OEMs keeping up with changes." "[It's] getting more and more expensive to ride." "Economy and not enough disposable income." "Keeping up with our high level of growth (staffing, capacity, etc)." "Moving to a new location." "The economy and governmental regulation." "Affordability." "Insurance rates on street bikes and ORV." "Kids don't seem as interested in riding as in the past. Heavy discounting from competitors." "Pricing on the new units." "Finding and keeping good employees." "Increase in interest rates and slimmer profits." "Pricing is getting so high that many can not afford a powersports product." "Changing demographics." "Sales need to increase, or our dealership will not sustain another year." "High concentration of dealers. OEMs setting up new dealers in their quest for increasing market share. [It] erodes dealer profitability." "Keeping inventory levels correct to capitalize on sales however not become a liability." "Yamaha's lack of anything exciting." "Economic changes/politics." PSB