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www.PowersportsBusiness.com NEWS Powersports Business • May 5, 2014 • 5 4 • May 5, 2014 • Powersports Business NEWS www.PowersportsBusiness.com www.powersportsbusiness.com Editorial and Sales: 763.383.4400 EDITOR IN CHIEF: Dave McMahon 763/383-4411 (dmcmahon@powersportsbusiness.com) MANAGING EDITOR: Liz Keener 763/383-4413 (lkeener@powersportsbusiness.com) SENIOR EDITOR: Tom Kaiser 763/383-4424 (tkaiser@powersportsbusiness.com) ASSOCIATE DIGITAL EDITOR: Christopher Gerber DIGITAL PRODUCTION EDITOR: Heather Brown SENIOR ART DIRECTOR: Dodi Vessels PRODUCTION ARTIST: Kelsey Houle (khoule@epgmediallc.com) PRODUCTION MANAGER: Angela Schmieg VICE PRESIDENT/TRADE GROUP: Amy Collins NATIONAL SALES DIRECTOR Allison Gruhn 763/383-4467 (agruhn@powersportsbusiness.com) NATIONAL ACCOUNT MANAGER Mark Rosacker 763/383-4433 (mrosacker@snowgoer.com) NATIONAL ACCOUNT MANAGER David J. Voll 763/383-4421 (dvoll@ridermagazine.com) ADVERTISING SALES REPRESENTATIVE: Barbara Reynolds 603/588-2086 (breynolds@powersportsbusiness.com) VICE PRESIDENT/FINANCE: Gerald Winkel VP/AUDIENCE DEVELOPMENT & CIRCULATION: Joanne Juda-Prainito DIRECTOR OF MARKETING: Tim Morgan MARKETING SPECIALIST: Geoff Christ PRODUCTION SPECIALIST: Cherri Perschmann GROUP SENIOR SALES SPECIALIST: Bernadette Wohlman CONTRIBUTORS: COLUMNISTS: Brian Gallmeier, Neil Pascale, Sam Dantzler DEALER ADVISORY BOARD: Hooksett Kawasaki-Polaris, Jim Whalley; Hacker's Yamaha & Honda, Rick Hacker; Honda/Polaris of Lubbock, Morris Baker; All Action Water Sports, Ray Leps POWERSPORTS BUSINESS (ISSN #1522-7944) is published 15 times per year – monthly except twice in May and December, the Market Data Book in September – by EPG Media, LLC, 3300 Fernbrook Lane N #200, Plymouth, MN 55447. Periodicals postage paid at St. Paul, MN and additional mailing offices. SUBSCRIPTION INFORMATION: Free to qualified members of the motorcycle, all-terrain vehicle, snowmobile and personal watercraft industries. Annual subscription rate is $56 per year for U.S residents, $76 for Canadian residents and $96 for residents in other countries. All paid subscriptions must be paid in advance and in U.S. funds only. POSTMASTER: Send address changes to Powersports Business, P.O. Box 2123, Skokie, IL 60076-7823. CUSTOMER SERVICE: Visit www.PowersportsBusiness.com, email PowersportsBusiness@halldata.com, call (847) 763-9565, fax (847) 763 9569 or write to Powersports Business, PO Box 2123, Skokie, IL 60076-7823. CANADIAN RETURN ADDRESS: EPG Media, LLC, 4960-2 Walker Road, Windsor, Ontario N9A 6J3. Publication Sales Agreement #40012332. EDITORIAL: All manuscripts, materials, photographs and artwork submitted are at mailer's risk and must include self-addressed envelope with sufficient postage for return. Send editorial materials to EPG Media, LLC, 3300 Fernbrook Lane N, Suite 200, Minneapolis, MN 55447, 763/383-4400. No responsibility will be assumed for unsolicited materials. Powersports Business is a registered trademark of EPG Media, LLC. Copyright 2013 by EPG Media, LLC. All rights reserved. Reproduction in whole or part is prohibited unless expressly authorized by publisher. REPRINTS: For more information on e-prints or reprints from Powersports Business, contact Bernadette Wohlman, 763/383-4400 x2464. Printed in U.S.A. industry's first end-to-end business manage- ment platform. DX1 debuted earlier this year and already has been installed in dealerships across North America. It gives dealerships the unique ability to manage all parts of their busi- ness from one launchpad. "To succeed in today's environment, dealers must spend more time running their business and less time managing their systems," said Jeff Littlejohn, president of Dominion Pow- ersports Solutions. "That's why we've invested as much time developing and fine-tuning the installation and service aspect of DX1 as the platform itself." The new DX1 members include powers- ports veterans Mark Wilson and Brett Ernen- putsch. Wilson worked for a number of years with Maxxis International, helping build the brand's industry tire sales. He also is a former off-road motorcycle racer, having competed in enduro and motocross. In his new position, Wilson will be the customer support manager scooter dealers reported the same. However, the weather wasn't bad for all stores. BRP-only dealer Dave Vincent, owner of Team Vincent Motorsports in Ayr, Ont., reported that still-falling snow led to a surge in his Ski-Doo sales in Q1. "Q1 sales are up; profit is up, net margin is up. Everyone was happy; people were filling the store," Vincent said. "We had snow — that was the difference." GOOD FOR SLEDS While many motorcycle-focused dealers had a difficult first quarter, snowmobile dealers overall saw positive results for the first three months of the year, with 58 percent reporting sales increases of 5 percent or more. However, like many dealers, Vincent is ready for warmer weather, so he can start moving Spyders and Sea-Doos. "We had a great Toronto Boat Show. The Sparks are sold out. I wish I had another 20 of them. ATVs are soft, so I'm a little worried about that. And Spyders are just kicking off," he said. Though dealers are hopeful sales will pick up over the rest of 2014, they're being cautious with their outlooks. "I expect us to probably be probably near equal with last year or maybe a 5 percent increase," Holmes said, adding that he expects ATVs and side-by-sides will carry the load for his dealership in 2014. Hollink is also being conservative, with concerns looming about how the economy is affecting his area's blue-collar workers. PSB / RBC CAPITAL MARKETS Q1 DEALER SURVEY RATE THE FOLLOWING WHERE APPLICABLE, WHAT TYPE OF GROWTH ARE YOU EXPECTING BY LINE OF BUSINESS (NEW PRODUCTS ONLY, MEASURED IN UNITS) OVER THE NEXT 12 MONTHS? HOW WOULD YOU CHARACTERIZE YOUR CURRENT INVENTORY LEVELS BY LINE OF BUSINESS? TO WHAT EXTENT HAVE YOUR CONCERNS ABOUT THE FOLLOWING EXTERNAL RISK FACTORS CHANGED OVER THE PAST FEW MONTHS? 7% 8% 12% 8% 13% 7% 23% 30% 25% 25% 30% 17% 39% 23% 36% 38% 33% 46% 23% 27% 22% 21% 19% 21% 8% 12% 5% 8% 5% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall Business Conditions New Unit Sales Used Unit Sales P&A Sales Service Department F&I Very strong Somewhat strong Average Somewhat weak Very weak 22% 10% 9% 6% 19% 14% 33% 31% 21% 13% 33% 27% 40% 46% 55% 59% 39% 48% 2% 9% 13% 19% 7% 9% 3% 4% 2% 3% 2% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% U.S. political environment High/rising gasoline prices Financing costs/ availability Housing market Economic and/ or political issues outside of the U.S. Employment outlook Significantly more concerned Somewhat more concerned About the same Somewhat less concerned Significantly less concerned 5% 2% 5% 2% 3% 3% 15% 5% 7% 6% 6% 6% 10% 3% 28% 19% 17% 13% 12% 19% 29% 25% 28% 28% 29% 29% 28% 21% 26% 25% 19% 31% 29% 30% 39% 44% 25% 27% 2% 6% 1% 6% 4% 3% 2% 6% 1% 5% 5% 6% 7% 2% 3% 4% 1% 2% 5% 6% 1% 2% 3% 1% 2% 2% 2% 3% 5% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Side-by-Sides ATVs Heavyweight Motorcycles Sport bikes Off-road bikes Scooters PWC Snowmobiles +30% or better +20% 10% 5% Flat -5% -10% -20% -30% or worse 30% 29% 35% 32% 23% 25% 26% 36% 60% 67% 60% 63% 72% 72% 67% 52% 10% 4% 5% 5% 5% 3% 7% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Side-by-sides ATVs Heavyweight Motorcycles Sport Bikes Off-road bikes Scooters PWC Snowmobiles Too heavy About right Too low HOW WOULD YOU CHARACTERIZE CUSTOMER TRAFFIC IN THE LAST THREE MONTHS COMPARED TO THE SAME PERIOD LAST YEAR? HOW WOULD YOU CHARACTERIZE YOUR DEALERSHIP'S PROFIT MARGINS NOW VS. A YEAR AGO? IN GENERAL, TO WHAT EXTENT HAS YOUR BUSINESS OUTLOOK CHANGED COMPARED TO SIX MONTHS AGO? Significantly better 7% Somewhat better 25% About the same 33% Somewhat worse 29% Significantly worse 6% Significantly better 8% Somewhat better 26% About the same 38% Somewhat worse 22% Significantly worse 6% Significantly better 8% Somewhat better 29% About the same 41% Somewhat worse 19% Significantly worse 3% WINNING DEALERS The following dealers who completed the PSB/ RBC Capital Markets Q1 2014 Dealer Survey were randomly selected to win a $100 Best Buy gift card, courtesy of RBC Capital Markets: Brad Boswell, Careys Cycle Center, Riverdale, UT Kim Keen, Donelson Cycles, St. Ann, MO Corey Lamarre, Montgomery & Son Sales, Gull Lake, SASK Jim Teate, Dothan Powersports, Dothan, AL Barry Usher, Beartooth Harley-Davidson, Billings, MT All dealers who complete the survey receive a PDF analysis of the results from RBC Capital Markets and are eligible for the $100 Best Buy gift card. HOTNEWS "I think it will be about the same as last year, maybe slightly up," he said. "In a normal economy usually with a cold winter like this, when the weather breaks, it gets crazy, but we haven't seen that yet." Dealership survey-takers also were careful with their predictions for the year, as 39 per- cent rated overall business conditions as aver- age, and 41 percent said their business outlook remains unchanged compared to six months ago. But there's always hope for a good season, as 39 percent of respondents reported buying interest in Q1 was somewhat or significantly better than the first quarter of 2013. As for Vincent, his positive first quarter leaves him excited for what's to come in the remainder of the year. "I'm looking forward to a really good '14," he said. DEALER REFLECTIONS The following are comments dealers left on our Q1 survey. All comments are shared anonymously. "Weather was a challenge in Q1 for us in Indiana. However, ATV & SXS was increased quite a bit. As soon as the weather breaks, we predict 2014 will be significantly higher than 2013 due to pent-up demand." — Multi-line Midwest dealer "The metric OEMs could phase out cruiser production as the new 500 and 750 HD will be the nail in the coffin. In oil field country, riding a metric cruiser is akin to showing up at a Ferrari meet with a Kia, it just isn't cool. Rid- ing a [metric cruiser] to the local Buffalo Wild Wings here and parking it in the bike section next to all the real cruisers will probably end bad for you." — Multi-line South dealer "Average people are being priced out of industry. Machines are getting too expensive." — Single-line West dealer "New units sales are down from prior YTD due to lack of current model allocations (we have multiple sold incoming units with depos- its and simply can not get enough of the new product for stock), which is driving up our pre- owned sales." — Single-line Northwest dealer "Seems like there are less tire kickers and lower overall traffic this quarter, but those who come in are buyers. Sales staff are generally closing on 80 percent of customers." — Multi- line Canada dealer "Sales & prospects are looking good for 2014." — Multi-line Northeast dealer PSB SURVEY CONTINUED FROM PAGE 4 See Survey, Page 5 Source: Powersports Business / RBC Capital Markets CONTINUED FROM PAGE 3 SURVEY CONTINUED FROM COVER P01x10-PSB6-News.indd 4 4/23/14 9:54 AM