Dealer optimism? Depends on the brand they sell, says Baird/Dealernews study

Publish Date: 
Aug 16, 2012

MILWAUKEE, Wis. - Franchised dealers selling North American and European brands report stronger consumer demand and leaner inventories than dealers carrying Japanese brands, according to the results of a survey conducted by Milwaukee-based Baird Research and Dealernews.

After strong months in May and June, sales began to slow in July, dealers said. But a deeper look into the data reveals important differences among key brands and product types.

“Brands with fresh and innovative products are doing well, but products that rely mostly on a better economy are struggling,” said Craig Kennison, senior research analyst with Baird.  Across the board, however, Service and Parts departments were reporting strong traffic, and that’s “a notable bright spot for hard-working dealers,” he noted.

Franchised dealers reported that:

  • Store traffic slipped in July following stronger sales in May and June;
  • Service and Parts department sales are up;
  • Retail sales are solid in key vehicle categories such as UTV/SxS; and
  • Used inventory is at a level dealers feel is too low for demand.

Dealers reported that store traffic dipped in July following stronger performances in May and June. Some dealers cited the extreme heat in many sections of North America this summer, while others blamed the volatile U.S. political climate and sputtering economy. Brands with fresh products or strong consumer demand for used products fared better, researchers noted.

Dealers appear comfortable with new inventory, but their outlook depends largely on the brand and product category, said Kennison. “Dealers crave more SxS inventory as the category remains hot, but would prefer to sell more ATVs and scooters before restocking,” he noted.

Used inventory is becoming scarce. “Nearly every dealer told us that used inventory is tough to come by,” Kennison said.

Total powersports retail trends improved, led by robust demand for SxS vehicles. “ATV demand appears close to a bottom,” researchers noted. Dealers cited particular upward momentum with the Polaris Ranger and RZR, and the Arctic Cat Wildcat.

BMW, Ducati, Harley-Davidson and Polaris appeared to be the better-performing motorcycle brands, according to the survey. “Harley-Davidson sales remain very strong with excellent margins,” one dealer noted. “Polaris sales are extremely strong, but margins are very low. Honda and Yamaha sales have not improved and are at historic lows. Used metric bike sales are very strong.” (story continues)