Issue link: https://read.dmtmag.com/i/422004
4 • December 1, 2014 • Powersports Business NEWS www.PowersportsBusiness.com www.powersportsbusiness.com Editorial and Sales: 763.383.4400 Subscriber Service: 847.763.9565 EDITOR IN CHIEF: Dave McMahon 763/383-4411 (dmcmahon@powersportsbusiness.com) MANAGING EDITOR: Liz Keener 763/383-4413 (lkeener@powersportsbusiness.com) DIGITAL SOLUTIONS MANAGER: Christopher Gerber DIGITAL PRODUCTION EDITOR: Heather Brown MANAGING ART DIRECTOR: Dodi Vessels ASSOCIATE ART DIRECTOR: Andrea Schneider PRODUCTION MANAGER: Angela Schmieg PRODUCTION DIRECTOR: Cherri Perschmann 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) CEO: Marion Minor SR. VICE PRESIDENT/FINANCE & OPERATIONS: Gerald Winkel SR. VICE PRESIDENT/MARKET DEVELOPMENT: Joanne Juda-Prainito VICE PRESIDENT/POWERSPORTS, MARINE, BEVERAGE: Amy Collins AUDIENCE DEVELOPMENT MANAGER: Tim Morgan MARKETING SPECIALIST: Geoff Christ SENIOR SALES ADMINISTRATOR: Bernadette Wohlman CONTRIBUTORS: COLUMNISTS: Steve Dodds, Sam Dantzler, Neil Pascale CONTRIBUTING WRITERS: Lisa Pelissier, David Crocker 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 2014 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. POWERSPORTS BUSINESS/RBC CAPITAL MARKETS Q3 DEALER SURVEY Strong side-by-side sales expected to continue Powersports Business recently conducted a quarterly joint dealer survey (114 dealer participants from 39 states and Canada) with RBC Capital Markets. RBC analyst Joe Spak reports that the "dealer business conditions index suggests an overall sequential decline from last quarter, but the new sales condition, which is most relevant for our powersports coverage, improved sequentially. We believe industry side-by-side retail sales growth in 3Q14 was modestly slower than 2Q14. Mean- while, ATV, motorcycle and PWC retail sales appear to have grown at a similar pace to 2Q14. Looking ahead, we didn't see much of a change in dealer expectations for NTM (next 12 months) sales from last quarter in the key categories (side-by-sides, ATVs, motorcy- cles). The economy and consumer may need to strengthen to see much stronger category demand. Amid flattish growth, innovation becomes even more crucial." Below, Spak looks at retail performance by seg- ment in Q3, according to the dealer survey: SIDE-BY-SIDE "We believe SxS industry retail sales grew high-single digits this quarter, below the low teens in 2Q14 but still a strong level. Dealers still expect NTM sales to be relatively strong; those expectations haven't changed since last quarter. Inventory concerns have eased since 2Q14 while promotional activity appears to have subsided since our 2Q14 reading." MOTORCYCLE "Overall, motorcycle industry sales growth seems similar to last quarter — up 1-3 percent. Survey respondents indicate that the metric brands have been disappointing especially as it comes to new product, so further share loses are likely (potential positive for HOG, PII). There is still some concern over the future of motorcycle industry growth, but our research shows this could cycle higher with construc- tion. Inventory concerns stepped up again this quarter, though it seems mostly centered around some of the metric brands — Ducati, Triumph and Victory while Harley and Indian inventories are better. Despite the inventory issues, promotional activity still mostly in check. We are keeping a watchful eye." ATV "Industry ATV 3Q14 sales growth and NTM expectations both look modestly better than 2Q14 but still fairly low levels." SNOWMOBILE "NTM expectations appear pretty upbeat with inventories as lean as they have been in over a decade." POLARIS TAKE "Dealer feedback on new ORV product lineup is very solid. New Ranger products very well received and excitement is high for Slingshot. Expectations for Indian retail sales over the next 12 months increased, likely as a result of the expanded product lineup." HARLEY-DAVIDSON TAKE "Destocking occurred with the announced shipment reduction and some attractive financ- ing programs. Dealers seem excited about the MY15 lineup (return of Road Glide, Street)." BRP TAKE "Dealer responses support our expectation for a stronger second half, with a solid NTM out- look for Spyder, SxS (SSV), ATV and especially snowmobiles. New models are driving the positive outlook — the new Spyder F3 (ship- ping FQ4), the 121-hp Maverick SSV, and the Outlander L ATV (a new entry in the midrange segment)." 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. Our major concern is land closures, find- ing and retaining quality long-term employees in our market. OEMs still trying to have dealers take unneeded inventory. The major difference in the powersports business now and 2007 is the present lack of retail financing. BRP Certification program is hard on deal- ers. Have to order PAC that does not sell for us. With credit being so tight, it's hard as a dealer to sell to people who do not qualify for a loan. Think it will keep at the level it is but concerned on side-by-side and the current land issues. If people mind their business and focus on the customers, they will be fine. hope 2015 more people walk in the door. Tri- umph needs to help dealers, or they will loose a lot of them. Still too much pressure from OEMs to buy and stock, especially on bikes. Yamaha street bike sales don't look positive. Hoping that Triumph finally gets back on track now that they fired that CEO and does something to help their dealers out. PSB Improved new sales conditions reported 57% 52% 45% 46% 46% 47% 50% 46% 49 53% 52% 51% 46% 41% 42% 39% 43% 47% 48% 49% 49% 51% 61% 60% 55% 55% 54% 54% 51% 51% 55% 55% 54% 30% 40% 50% 60% 70% Spring 2012 Summer 2012 Fall 2012 Winter 2012 Spring 2013 Summer 2013 Fall 2013 Winter 2013 Spring 2014 Summer 2014 Fall 2014 Overall Business Conditions New Unit Sales Used Unit Sales DEALER DIFFUSION INDEX: OVERALL BUSINESS CONDITIONS: NEW UNIT SALES, USED UNIT SALES Expansionary Contracting DEALER BUSINESS PERFORMANCE RELATIVE TO PLAN SPRING 2012 — FALL 2014 36% 35% 40% 41% 50% 51% 48% 40% 43% 40% 40% 30% 34% 40% 40% 34% 28% 33% 36% 40% 38% 40% 33% 31% 21% 19% 16% 21% 18% 24% 17% 22% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Spring 2012 Summer 2012 Fall 2012 Winter 2012 Spring 2013 Summer 2013 Fall 2013 Winter 2013 Spring 2014 Summer 2014 Fall 2014 Below Plan On Plan Above Plan Source: RBC Capital Markets, Powersports Business WINNING DEALERS The following dealers who completed the Power- sports Business/RBC Capital Markets Q3 2014 Dealer Survey were randomly selected to win a $100 Best Buy gift card, courtesy of RBC Capital Markets. Butch Miller, Honda Polaris of North Texas, Sherman, TX Pete Daniel, Ultimate Cycle, Pohatan, VA Mick Cawthorn, Kane's Harley-Davidson, Calgary, Alb. Dennis Revell, Honda of the Ozarks, S pringfield, MO Roger O'Hotto, Boomerang Sports, Melrose, MN 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.