Issue link: https://read.dmtmag.com/i/360137
6 • August 11, 2014 • Powersports Business NEWS www.PowersportsBusiness.com BRP "Retail snowmobile sales were a highlight for BRP, consistent with recent commentary. Snowmobile inventories are low, supporting a solid NTM outlook. 2Q performance for ATVs was encouraging, with PWCs also surprisingly strong. Dealers indicate slowing growth in the SxS segment, with responses pointing to BRP SxS sales at/slightly below industry levels. Importantly, dealers indicated relatively solid growth for Spyder sales." Spak's 26-page analysis of the PSB/RBC Capital Markets dealer survey is provided to all North American dealers who complete the survey. Dealers interested in being added to the sur- vey list can send an email to PSB editor in chief Dave McMahon at dmcmahon@powersports- business.com. The survey also found that 60 percent of deal- ers were either "above" or "on" plan for the quarter, with 40 percent below plan. That's a 3 percent increase for those who reported being "above" or "on" plan in Q1, and a 11 percent increase from the same responses in Q2 2013. Overall business conditions during the quarter were characterized as "average," "somewhat strong" or "very strong" by 68 per- cent of the dealers responding. Service depart- ments once again had positive ratings, with 49 percent of dealers responding that service was either "somewhat strong" or "very strong." Conversely, new unit sales were reported as "somewhat weak" or "very weak" by 38 per- cent of respondents, while used unit sales were deemed "somewhat weak" or "very weak" by 28 percent of dealers. Among segments of the industry, 49 per- cent of side-by-side dealers reported growth of at least 5 percent, while 10 percent reported growth of at least 20 percent. PWC sales con- tinued to surge, with 34 percent reporting sales growth of at least 10 percent. Of the PWC deal- ers surveyed, 23 percent reported PWC sales growth of 10 percent. Here's how select dealers answered our ques- tion: Please tell us anything you wish to add about the current powersports business envi- ronment and your outlook. Responses are and always will be anonymous. Everything seems positive. Scary. Losing young buyers, especially motorcycle! There are still way too many Polaris deal- ers and profit margins are at historical lows. The average Polaris deal is 2-3% (after hold- back). Harley-Davidson gross profits are up siginificantly (both new and used). Honda and Yamaha UTV margins are much higher than Polaris margins (12-15%). During the summer months; it appears that everything depends on location and the ability of the dealership to be flexible in pricing; delivery & service. We seem to be seeing a little improve- ment in sport bike sales-especially EX300 & ZX636, but cruiser sales have been dismal, especially Suzuki. We have had an unusual amount of rain this season so far, which has held back floor traffic. Insurance and payroll expenses are kill- ing us. ATV business is dwindling, SxS is good, Can Am Spyder is outstanding. Overall motor- cycle business is down appreciably. Sales in 2014 have been good. Just hop- ing the farmers have a good year. They drive the market. Business here was hurt this year with the long cold winter. People spent a lot more money to heat their homes than normal and it has taken a toll on business. ATV and Cycle market just isn't there. The economic conditions are grim for the next 12 months, local and national. Much better this year. I believe the Powersports industry has a good outlook going forward as long as the economy is able to stabilize. Some of the OEMs need to continue to provide lower end afford- able units in order for growth. Used touring Harley-Davidson values have dropped considerably due to the Rush- more rollout. Manufacturers need to improve floorplan financing for dealers. Current floorplan financ- ing is extremely high cost. Slow start to season this year. Concerned about buyers delaying purchase until next year. New President of USA. Honda management is not very good at this time, who is guiding the ship? OEMs need to place stronger focus on cleaning up dealer inventories to give new exciting product best chance to accelerate the industry. Between the Internet and the OEM over- production margins are almost non-existent. The price war and dealer vs. dealer behavior is killing this industry. With out inventory cor- rections used products will continue to be more profitable. Inventory, inventory, inventory… the OEM's are pushing too much of the wrong stuff on the dealers, BRP and Polaris especially. Yamaha needs to get with the program and build more of what's selling like FZ-09 and Bolts and less ancient Star models. The job market and overall economic outlook needs to improve. I don't believe that will happen until we have a political change. We need a different president. Midwest- erners cautious with disposable income due to uncertainty. Customers are getting older, younger buyers are not replacing the old customers on an equal basis. PG&A inventory too high, insurance cost is outrageous. Working harder to make less margins. Constantly have to be on the throttle, no coast- ing or cruising allowed... Weather and economics has competitors reacting to suit their own individual situations, (e.g., cash flow needs or inventory overstock), which has resulted in a buyers market and less margin. Very competitive marketplace. PSB SURVEY CONTINUED FROM PAGE 4