Issue link: https://read.dmtmag.com/i/626951
10 • January 25, 2016 • Powersports Business FINANCIAL www.PowersportsBusiness.com CDF to become exclusive floorplan provider for Arctic Cat GE Capital's Commercial Distribution Finance business announced that Arctic Cat has chosen CDF as an exclusive pro- vider for dealer inventory financing across North America. The financing will con- solidate all of Arctic Cat's North American dealers onto one technology platform and provide them leading edge tools to help manage their businesses. Chris Eperjesy, CFO at Arctic Cat, said, "We're consolidating our North American dealer-inven- tory financing under CDF because of their expertise in our industry and their leading tech- nology solutions." Headquartered in Minnesota, Arctic Cat has been manufacturing snowmobiles, ATVs and side-by-sides since 1960 and has had a long-standing relationship with CDF in the U.S. The new, exclusive dealer financing agreement extends the U.S. relationship and establishes a new financing relationship covering Canada. "We are excited and honored that Arctic Cat has chosen to bring its entire North American dealer network onto the CDF platform," said Jeremy Jansen, president of CDF's motorsports group. "We look forward to delivering a best-in- class financing experience for Arctic Cat's Canadian dealers," said Howard Shiebler, president of CDF Canada. POLARIS, SYNCHRONY EXPAND CONSUMER FINANCING PROGRAM Synchrony Financial earlier this month announced a multi-year renewal and expan- sion of its program to provide consumer financing for Polaris powersports products. Synchrony Financial has provided financing for Polaris motorcycles since 2006. Qualify- ing buyers will now have access to special financing options and exclusive offers for nearly all of Polaris' products through its more than 1,500 dealers in the U.S. "The availability of financing is important for consumers making major purchases and for the continued growth of our powersports partners," said Glenn Marino, executive vice president and CEO, Payment Solutions, Synchrony Financial. "Polaris' powersports enthusiasts now have more flexibility to purchase the vehicle they want through new financing options." A 2014 study commissioned by Syn- chrony Financial of powersports customers explores the path to purchase and shows that, while value is important, the major- ity of shoppers choose a brand based on quality and trust. It also confirmed the importance of financing with 76 percent of survey respondents who have used dealer financing saying it helps make large purchases more affordable and 52 percent saying they would not have made the purchase, or gone to another retailer, had financing not been available. "We're pleased to expand our relation- ship with Synchrony Financial due to their deep experience and insights into customer trends in the powersports industry," said Michael T. Speetzen, executive vice presi- dent and CFO, Polaris Industries Inc. "They clearly understand our customers and know how to provide the right financing for them to get the vehicles they want and need." CFMOTO SELECTS NORTHPOINT COMMERCIAL FINANCE FOR FLOOR PLANNING Alpharetta, Ga.-based Northpoint Commer- cial Finance (Northpoint) announced that CFMOTO has selected Northpoint as the exclusive provider of floorplan financing for its U.S. dealers. The partnership will ensure dealers have access to competitive rates and terms, a cutting edge inventory management system and exceptional customer service. CFMOTO is a premier off-road and on-road vehicle manufacturer based in Hangzhou, China, with strong market share in more than 60 countries. The company's North American headquarters is located in Plymouth, Minn. "We are excited to bring CFMOTO a world class inventory finance program that provides dealers with flexible financing solutions. In addition, our online inventory management system allows dealers to man- age their business easily and efficiently from anywhere while providing data and analyt- ics to help grow their businesses," said Dan Radley, Northpoint's CEO. The partnership is a result of CFMOTO's dramatic growth and need for a single technology platform with online tools and monitoring capabilities for dealers. Northpoint will replace the existing floorplanning program offered by CFMOTO Finance Corp. "In looking for a partner that would be as committed to supporting our dealers as we are, we found Northpoint offered the right combination of service and experience in developing and managing exclusive finance programs for global companies," said Dave Auringer, vice president of sales and dealer development at CFMOTO USA. "They offer a dedicated team, quick decisions and importantly, a unique flexibility that pro- vides a significant advantage in today's often inflexible banking environment." ZERO MOTORCYCLES HELPS DELIVER TAX CREDITS FOR ELECTRIC MOTORCYCLES Zero Motorcycles announced that the company's complete 2016 model line of electric motorcycles will again be eligible for a 10 percent federal tax credit for plug-in vehicles. The tax credit was included in the "last minute" tax extenders bill approved by Congress on Friday, Dec. 18 and signed into law by President Obama that afternoon. Zero Motorcycles took the lead in work- ing with Plug-In America and a coalition of other electric motorcycle companies to ensure the plug-in tax credit would be extended and include electric motorcycles. The coalition rallied Congress to take action and expand green jobs in this excit- ing and emerging industry. Zero Motor- cycles dealers, customers and fans weighed in as well. "Tax credits for electric motorcycles are not only an effective way to create jobs, they are also an investment in clean energy technology. We think that America can and should lead the world in electric motor- cycle technology," said Richard Walker, CEO of Zero Motorcycles. "The electric motorcycle industry is rapidly responding to our country's need for affordable and environmentally responsible transporta- tion. We're naturally excited to combine our passion for motorcycles with some- thing that benefits everyone." PSB DIGEST About 2 of 3 dealers call F&I average or somewhat strong The Powersports Business/RBC Capital Markets Q4 survey of 123 dealers from 42 states and Canada representing 49 OEM brands showed that business in the F&I department has trended toward the average-or-under side of the ledger. About 39 percent of respondents said F&I business was "average," with 28 percent declar- ing the revenue stream as "somewhat weak," and another 10 percent saying F&I was "very weak" in the fourth quarter compared to the year-ago quarter. Some 20 percent of dealers said their F&I department was "somewhat strong" in Q4, while only 3 percent declared F&I "very strong" in the quarter. Those sentiments correspond to the follow- ing responses from the Q4 2014 survey, which included 139 dealers from 40 states and Canada: Very strong: 2 percent Somewhat strong: 21 percent Average: 46 percent Somewhat weak: 21 percent Very weak: 12 percent Looking at the Q4 2015 survey, one of the ques- tions asked: "To what extent have your con- cerns about the following external risk factors changed over the past few months?" In regards to "Financing costs/availability," 57 percent of respondents said their concerns were "about the same," with an additional 21 percent at "somewhat more concerned." About 11 percent were "somewhat less concerned," and 7 percent were "significantly less concerned." Only 3 per- cent were "significantly more concerned" with financing costs/availability in Q4 2015. Also, 46 percent of respondents noted that profit margins in Q4 2015 were "somewhat worse" or "significantly worse" than in Q4 2014. One in three dealers said profit margins were "about the same" as the year-ago quarter, with 17 percent saying dealership profit margins were "somewhat better" than Q4 2014. Only 4 percent report profit margins as "significantly better" in Q4 2015 compared to Q4 2014. PSB Survey shows F&I business mostly level CHRIS EPERJESY DAVE AURINGER How would you characterize your dealership's profit margins now vs. a year ago? Significantly better 4% Somewhat better 17% About the same 33% Somewhat worse 35% Significantly worse 11% Please rate the following: 2% 4% 5% 3% 7% 3% 24% 20% 20% 20% 33% 20% 28% 22% 35% 34% 37% 39% 34% 34% 31% 33% 21% 28% 12% 20% 9% 10% 2% 10% 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 To what extent have your concerns about the following external risk factors changed over the past few months? 20% 2% 3% 2% 17% 9% 35% 3% 21% 13% 48% 24% 39% 24% 57% 68% 28% 59% 4% 39% 11% 11% 5% 8% 1% 32% 7% 6% 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 TO WHAT EXTENT HAVE YOUR CONCERNS ABOUT THE FOLLOWING EXTERNAL RISK FACTORS CHANGED OVER THE PAST FEW MONTHS? HOW WOULD YOU CHARACTERIZE YOUR DEALERSHIP'S PROFIT MARGINS NOW VS. A YEAR AGO? PLEASE RATE THE FOLLOWING: Source: Powersports Business/RBC Capital Markets Q4 2015 dealer survey Source: Powersports Business/ RBC Capital Markets Q4 2015 dealer survey