Issue link: https://read.dmtmag.com/i/303681
www.PowersportsBusiness.com MOTORCYCLE Powersports Business • May 5, 2014 • 31 MOTORCYCLE American Heritage Motorcycles owners listening to customers BY DAVE McMAHON EDITOR IN CHIEF It would be easy for the industry's five latest investors to sit back and watch their first Indian and Victory dealership thrive in Chicago's far western suburbs. Instead, members of the newly formed American Heritage Motorcycles, LLC are taking a deep dive into the daily operations of the shiny store. Located alongside the highly trafficked Randall Road in South Elgin, Ill., AHM Chicago West held its grand opening in April. And just to be sure, the new owners know that the phones work well. In fact, when the dealership makes follow-up calls after unit sales and even service work, the former consultants take turns mak- ing the calls. Making those calls, they say, is the best way to get a handle on how the store is performing. "Every call we've made, we found that every one of the customers knew the name of the person they worked with," AHM dealer principal Jeff Sinclair told Powersports Business during the April VIP grand opening party, complete with a catered hors d'oeuvres and an open bar. "I found that to be unique. Another thing that I found that was unique is that I never got an answer the first time I called. So I would leave a message and nearly every one I called returned my call. That's a real strong indicator that our staff is involved and engaged with the customers." And because all employees are salary-based, the calls allow the owners to learn more about which employees are standing out in their day-to-day operations. "We want to create a special work environment, which means making a commitment to our core team," Sinclair said. "So we're hiring our core team on a salary basis, with bonuses provided based on objectives they reach. Custom- ers want to have a relationship with their dealership, and we can foster that by creating an environment where employees don't want to leave." MORE PREPARATION In the early going of their start-up dealership group, the quintet checks at the door their MBAs from distinguished universities such as Chicago Booth, Har- vard and Michigan. And watching them interact with folks ranging from the store's service man- ager to customers stopping in to wish them well to local dignitaries, they seem to be enjoying life as motorcycle dealership owners. Granted, they bring a business acumen that includes more than 65 years combined of management consulting, including several years with Polaris, the Indian/Victory parent company. The AHM team consists of Dan Finkelman from Columbus, Ohio; Rob McNish from New York; husband and wife Celia Sinclair and Jeff Sinclair, both from Cleveland; and Terry Sullivan, also from Cleveland. And while it's their first foray into dealership ownership, Jeff Sinclair admits to being a lifelong gearhead. "If it had an internal combustion engine, I was messing with it growing up," said Sinclair, whose father was a VP of GE Capital CDF seeing key indicators flat or positive BY DAVE McMAHON EDITOR IN CHIEF Sameer Gaur, president of the GE Capital Com- mercial Distribution Finance (CDF) motor- sports group, recently provided Powersports Business with an update on the status of floor- plan financing, and other key metrics involving inventory. The overall take is that floorplan financing for dealers appears to continue to be on a pace of steady improvement. PSB: Looking at the first quarter of 2014, how would you assess the state of floorplan financing among powersports dealers com- pared to Q1 2013? Was there any drastic dif- ference in those two periods? SAMEER GAUR: All-in-all, it feels more upbeat compared to the year-ago period. Our volume is up 11 percent in the U.S., which is an important indicator for us. That shows a combination of OEM confidence and dealer confidence, because the dealers are doing the ordering and the OEMs are doing the shipping. Outstandings are up, slightly more than the volume. Overall, things are looking positive. PSB: Based on that summation, what's your assessment of the financial strength/outlook for the dealer body at large? SG: We're seeing the consumer starting to engage more in recreational activities. So it's a healthy dealer body overall, which is what we're seeing in other industries that CDF finances, including marine and RV. When you look at Q1, for snowmobile deal- ers, it was great. The weather helped the snow product line do well. Both Canada and the U.S. were up about almost 11 percent in retail sales in both regions. The last two winters did not allow snowmobile sales to go that deep, so this winter was important. It helped dealers go through a lot of inventory, which makes the next order cycle appear positive. There was sell-through on the snow product. It was nice to see inventories getting to a healthy low, and it's good for the reordering cycle, which started March 31. That's one aspect of the deep winter. The other aspect is it feels like spring is still to come. So we all handled a deep winter, and all powersports segments are either up or worst-case is flat. So the outlook is still strong. PSB: How did turns look in the first quarter, compared to the year-ago quarter? SG: Turns are just shy of 2.5, pretty much the same as Q1 of 2013. So turns remain in good shape, and aging (focusing on new model units older than 540 days) also remains in the same range, just around 5 percent, the same as Q1 2013. If I see volumes up, outstandings up, turns steady and aging tight, that's a decent spot. We are pretty optimistic about it. Throw in what we're seeing from an OEM product intro- duction standpoint in all product lines and across the price-point spectrum, which is also a very important health indicator, and yes, it feels pretty good. We've seen some nice introductions at the higher end of pric- ing and at the lower end. The snowmobile product turns helped the overall powers- ports turns get to flattish for the quarter, but as the spring season kicks off, those turns will likely improve. PSB: In what ways are you seeing floorplan financing help dealers improve their inven- tory mix, and thus their potential to grow their bottom line? SG: We consistently support the industry by onboarding more manufacturers. We added 10 in 2012 and another 10 in 2013, and we've added four so far this year in terms of new OEMs. It's bringing more mix to the table. We do work with many manufacturers, so it makes it that much simpler for a dealer to source product from multiple customers that work with one provider and one system. Views on KBB.com decline by 1 percent in Q1 Overall web hits for powersports vehicles on KBB.com were down an average of 1 percent compared to the first quarter of 2013, accord- ing to data provided to Powersports Business from Kelley Blue Book senior powersports analyst Lisa Pelissier. "This seems insignificant, except that the first quarter of 2013 saw an astronomical rise in powersports vehicles web hits on KBB.com, with many vehicles gaining more than 100 percent in quarterly page views," Pelissier said. Investor group banking on Indian, Victory success Floorplan financing continues steady progression in Q1 Pre-owned views show strong, healthy market 30 • May 5, 2014 • Powersports Business www.PowersportsBusiness.com See Indian, Page 35 See GE, Page 36 American Heritage Motorcycles, LLC owners (from left) Celia and Jeff Sinclair, Dan Finkelman and Rob McNish are joined in their latest venture by Terry Sullivan (not pictured). AHM has been approved by Polaris to open 15 Indian/Victory dealerships. Industry types were well represented at the American Heritage Motorcycles Chicago West store's VIP grand opening. (From left) Jason Mroz, sales, American Heritage; Rob Shipinski, sales rep, Tucker Rocky Distributing; Dave Yeargin, Dominion Powersports; Amanda Blackstone and Duncan Butler, principals, The Butler Group Atlanta LLC; Mike Farrell, sales, American Heritage; and Matt Strader, Com- mercial Technology Leader at GE Capital, Commercial Distribution Finance. 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