Issue link: https://read.dmtmag.com/i/499779
8 • May 4, 2015 • Powersports Business NEWS www.PowersportsBusiness.com Despite being off to an average start, dealers looking forward to 2015 sales BY KATE SWANSON ASSISTANT EDITOR It takes dedication, hard work and sales skills to go the distance, and dealers from all over North America are seeing how they measure up in early 2015. Weather, economy and loca- tion had varying effects on dealership success, but dealer outlook remains positive moving forward, based on results of the results of Q1 2015 Powersports Business/RBC Capital Markets Dealer Survey. A total of 119 dealers from 40 states and six Canadian provinces completed the survey. The states not represented are Georgia, Idaho, Maine, Nevada, Oklahoma, Rhode Island, South Dakota, Vermont, West Vir- ginia and Wyoming. Dealers from those states who are interested in participating in the second quarter survey should send an email to PSB Editor in Chief Dave McMahon at dmcmahon@powersportsbusiness.com and request to be added to the list. Combined, the responding dealerships sell more than 45 brands of motorcycles, ATVs, side-by-sides, snowmobiles and PWC. A total of 109 of the 119 respondents (92 percent) are single-store owners. SLOW START OUT EAST Donald Meyers Jr., partner and president of Harley-Davidson of Baltimore in Maryland, told Powersports Business that weather was a big issue for the dealership in the first quarter. "Spring has finally hit here, but it's just been one of those years. Temperature and wet weather have been an issue," Meyers said. "We're a little bit slower getting out on the season." Jody Cole, owner of Headingley Sport Shop in Headingley, Manitoba, agreed that the win- ter had affected her dealership's sales as well. "We had a milder winter than most, which meant we had a terrible year in snowmobiles. We had hardly any snow, but that kind of helped the motorcycle business get started off a bit earlier." Many dealers experienced the same results from the winter months. Forty-seven percent of dealers reported their business performance was "below plan" in the Q1 survey. Of those surveyed, only 21 percent of dealers responded that Q1 business was "above plan." Headingley Sport Shop was among the deal- erships that were on plan for the year. "Some areas of the business were up, and some parts were down, but they all kind of leveled out," Cole said. "I think the main thing is always being positive and putting your best foot forward." The success trade-off between different prod- uct segments was a trend seen in multiple dealer- ship profiles. While one area, i.e. snowmobiles, suffered from a mild winter, another area, i.e. motorcycles, benefitted from an earlier season start. Survey results found that 24 percent of dealers reported snowmobile sales were down 30 percent or more in Q1, while the majority of dealerships experienced flat sales or small per- centage increases in motorcycles. CUSTOMER INTEREST POSITIVE Despite the varied weather effects, the majority of dealers also reported that customer interest seemed to be moving in a positive direction, with 34 percent reporting it was "somewhat better." Mark Holmes, owner of FDR Honda Kawasaki in Paducah, Ky., attributed this inter- est to falling gas prices and a resulting rise in the economy. "Gas prices have gone down quite a bit, so people have a little more spending money. We've had a couple businesses come into our area and provided more jobs. So it looks like spring is going to be better; I just hope it contin- ues," said Holmes. Holmes wasn't the only dealer to remain cautious of the economy. Raymond Walters, general sales manager of Got Gear Motorsports, in Ridgeland, Miss., says that OEM incentives and activity within the dealership has helped customers commit more to buying. Got Gear, which sells Polaris side-by-sides, among other vehicles, has had to deal with heavy inventory in its first quarter. "The incentives from Polaris helped big RATE THE FOLLOWING: TO WHAT EXTENT HAVE YOUR CONCERNS ABOUT THE FOLLOWING EXTERNAL RISK FACTORS CHANGED OVER THE PAST FEW MONTHS? Q1 below plan overall, but a positive outlook Source: Powersports Business/RBC Capital Markets Q1 Dealer Survey 6% 6% 10% 6% 8% 7% 30% 31% 24% 19% 21% 22% 29% 23% 39% 41% 44% 45% 29% 29% 17% 26% 20% 16% 7% 12% 9% 8% 7% 11% 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 weak Somewhat weak Average Somewhat strong Very strong 21% 4% 6% 1% 18% 12% 28% 8% 23% 16% 36% 28% 45% 43% 56% 65% 35% 52% 4% 32% 14% 15% 6% 7% 3% 13% 2% 3% 5% 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 less concerned Somewhat less concerned About the same Somewhat more concerned Significantly more concerened the morning] everybody got geared up; they road out to the dealership here, and one of my partners and I jumped on a couple of new Ultra Limiteds — with heated grips — and we were given a brick each to carry along for the last leg of the ride into Sturgis." Once in Sturgis, Sturgis mayor Mark Carstensen and Bill Davidson, great-grand- son of Harley-Davidson founder William A. Davidson and vice president of the Harley- Davidson Museum, revealed the final design and renderings of the Rally Point. Riders on three Harley-Davidsons — a 1978 Super Glide with a Shovelhead engine, a 2015 Street 750 and a Project LiveWire — broke ground on the plaza, and an announcement was made that Second Street has been renamed Harley- Davidson Way. The riders who completed the journey in Sturgis also delivered their bricks to Mayor Carstensen and motocross star Carey Hart, who has been named the Grand Marshall of the 2015 Sturgis City of Riders Mayor's Ride. "It was cold. It had a little bit of snow. The speeches were great; I had all of them video- taped. And the breaking ground was fun," Wilcox said of the ceremony. THE RALLY POINT The Rally Point, a name that was chosen from dozens of suggestions from Harley-Davidson fans, will include a stage for events, con- certs and weddings, as well as an elevated area for riders to take photos on their bikes with the iconic Stur- gis sign in the back- ground. The 74 bricks will be integrated into the plaza to represent H a r l e y - D a v i d s o n ' s commitment to the city and its rally. "Since the Harley- Davidson Rally Point will be our official headquarters all year round in Sturgis, it was vital to make sure we brought a piece of our history to be an element of the construction. We want customers to use this as a gathering spot and to make a connection to our brand," Hoyer said. The Rally Point became a focal point of Harley-Davidson's 75-year commitment as the official motorcycle of the annual Sturgis Rally. The new plaza is set to be ready by the time the 75th annual rally begins Aug. 3. As the local dealer, R y m e r s a i d h e ' s e x c i t e d f o r b o t h H a r l e y - D a v i d s o n ' s long-term contract with the Sturgis Rally and for the Rally Point to be a year-round offering to the city. "What I like about this best is it gives consis- tency. We know they're going to be back; we know they're the offi- cial sponsor. It's going to be looked forward to year after year," he said. He then added, "Throughout the year so many people travel into downtown Stur- gis because this is where it happens, and there isn't really anything there. That [Rally Point] helps at least give those tourists and out-of-town visitors something to get their head around." Even as an out-of-towner, Wilcox was excited for what Harley-Davidson unveiled, and he said the people of Sturgis seemed recep- tive to the plan and were friendly throughout his time in the city. "You start seeing the plans of the pavilion, and you see what they've got, and it's some- thing bikers will be able to utilize and be part of for decades to come." For Wilcox, who has been working at his family's dealership since 1978, the brick ride was special. Not only did he get to deliver a Harley-Davidson headquarters brick to Sturgis, but he also got to experience things like being photographed by an on-bike photographer, among other adventures. "I'll treasure that memory forever," he said of the trip. And it's likely he wasn't the only one who will permanently bookmark moments from those few days in March. "It was very cold with lots of snow and freezing wind and temperatures," Hoyer said. "But as all road trips do, memories were made to last a lifetime." PSB BRICK CONTINUED FROM PAGE 6 WINNING DEALERS The following dealers who completed the Q1 2015 Powersports Business/RBC Capital Mar- kets Dealer Survey were selected at random to win a $100 Best Buy gift card each, courtesy of RBC Capital Markets. Robin Clark, Leisure Time Sports, Tomah, WI Dan Notte, Cross Country Powersports, Metuchen, NJ Mick McCreary, St. Joe Harley-Davidson, St. Joseph, MO Randy Martin, Cycle Center of Denton, Denton, TX Bryan Moen, Big Sky Harley-Davidson, Great Falls, MT All dealers who complete the survey receive a PDF analysis of the results from RBC Capital Markets and are eligible for $100 Best Buy gift cards. See Survey, Page 10 Renderings from FourFront Deisgn, Inc., show the plans for the Harley-Davidson Rally Point, a year-round plaza for the city of Sturgis. The Rally Point is projected to be open before the 75th annual Sturgis Rally begins Aug. 3. POWERSPORTS BUSINESS/RBC CAPITAL MARKETS Q1 2015 DEALER SURVEY