JOSE BOISJOLI, BRP’s president and CEO, admits that the recent perfect storm of economic conditions caught his company by surprise. But at the same time, he says its diversification in products and international markets is helping the company survive the current downturn better than some competitors.
The company continues to invest in new product development, including a new SXS vehicle due out next year and its successful three-wheel on-road Spyder product line.
During a lengthy interview with Dealernews recently, Boisjoli discussed the impact of the current downturn on the company, changes in BRP’s dealer network and the company’s plans to assist dealers, BRP’s product portfolio, and his outlook for 2010 and beyond. Here are some of the key points:
A RECREATIONAL SXS, the company’s first side-by-side vehicle, will be launched in Q2 of next year. Boisjoli was tight-lipped about details but said the product will support the company’s Can-Am positioning. That means a high-performance machine that appeals to experienced, aggressive riders, one built upon the company’s championship racing heritage. When asked if BRP’s new machine would remind people of the very popular Polaris RZR, Boisjoli declined to answer directly. “We want to be No. 1 with customers in products that support our Can-Am brand positioning,” he replied. Look for a hot rollout similar to the sophisticated marketing campaign that accompanied BRP’s Spyder launch back in the spring of 2007.
SPYDER SALES STRONG. This year, U.S. sales of Spyder will exceed 5,000 units, although Boisjoli wouldn’t provide further details. He did say that it sells at about the same level as Polaris’ Victory, which sold about 4,000 units through September and about 6,500 units last year. Interestingly, close to 20 percent of Spyder buyers are new to the powersports industry, having never rode a powersports machine before riding the Spyder. That’s about four times what BRP expected. “We expected 5 percent would be new to the industry,” Boisjoli says. “This is a very good thing for us because it brings new clients to our network, and it proves that Spyder has a place on the road as an alternative product.” The Spyder also is drawing more women buyers than the on-road motorcycle segment, he says, which draws nearly 13 percent women. BRP has no intention in the short-term of adding a two-wheel on-road vehicle, he says.
Boisjoli was surprised by the suddenness of the widespread downturn around the world, something he says hasn’t happened in 30 years. The problems were compounded by the lack of credit for dealers and consumers and the drop in consumer confidence. BRP responded by cutting production, reducing employment, consolidating operations, closing a marine manufacturing plant in China, helping dealers clean out inventory and buying back debt at a discount.
OUTLOOK FOR 2010. “In a situation like this, you need to focus,” Boisjoli says. “I need to choose my battles. We decided to invest in new products. We’ll continue to invest in the Spyder, and we’ll invest in the new SXS. Cash flow is not infinite; we need to be careful.” In March, BRP will begin small outboard engine production in Wisconsin. This year will be somewhat better than 2008 and 2009, he says, but BRP will ship fewer products to dealers than it did in those years — about 30 percent fewer than the dealers will retail. BRP will continue to help dealers clean out inventory with aggressive promotions. Dealer inventories across all categories have dropped by about 20 percent this year, and Boisjoli sees them dropping another 25 percent or so next year. Inventories, he says, are worst in marine and ATVs, “but I’m pretty confident about snow, outboard and Spyder.” BRP’s dealer network shrank by about 8 percent to fewer than 1,200 dealers in the U.S. and Canada over the last year. About half of those departed dealers dropped the BRP line and half went out of business, Boisjoli said.
This story originally appeared in the January 2010 issue of Dealernews.