Dealer Sentiment Index: Long winter blamed for lower Q1 retail sales

Publish Date: 
Apr 10, 2013
By Arlo Redwine

FIRST-QUARTER SALES for most dealers declined in the first quarter on a year-over-year basis, primarily due to much cooler weather compared with the early spring in 2012, according to the results of the Baird/Dealernews Q1 Powersports Dealer Survey and Dealer Sentiment Index. 

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“Retail trends reported by dealers indicate demand fell across all product categories,” said Craig Kennison, senior research analyst with Baird. “After an early spring last year, it’s not surprising that trends slowed this period, and over half of the general retail comments mentioned weather as a key reason for disappointing results.”

Yet, he added that “while many dealers also noted economic concerns, the weather impact left many encouraged that customers would return to dealerships as temperatures warm. And we continue to believe that consumers may be more willing to spend with improving equity in the housing market.”

SLED SALES RISE. Colder temperatures benefitted snowmobile sales toward the end of the snow season, according to surveyed dealers. After a slow start to winter with very little snowfall, sled dealers in Q4 2013 survey reported dreadful retail demand. Though the trend remained negative this period, dealers reported that the late-season snowfall helped clear some units from inventory.

Compared with other brands, stronger retail trends for Ski-Doo product have left the brand’s dealers more comfortable with their inventory. “Ski-Doo product is on fire,” said a multiline dealer.

Commenting on stock levels in general, Kennison said: “We continue to believe inventory is near balanced in many categories, but a slow first quarter and continued apprehension about consumer spending have left dealers less comfortable with inventory positions. Dealers continued to express frustration with lackluster products from many manufacturers and concern that OEMs may be pushing too much inventory into dealerships without clarity on retail demand. Snowmobile stocks remain heavy but improved from the prior survey.”

SENTIMENT INDEX FALLS. The Baird/Dealernews Powersports Dealer Sentiment Index fell slightly, indicating a mixed outlook that is likely hindered by recent weak trends.

Floor traffic at dealerships in the South remained slow but was relatively better than at dealers in the Northeast and Midwest.

“It’s spring, but it’s snowing!” complained a multiline dealer. “I would like to shoot that groundhog!”

After a nearly flat trend last quarter, motorcycle retail trends turned slightly more negative. Again, not surprising given the strong results last year when, for example, Harley-Davidson retail sales rose 26 percent in the first quarter.

As during the final quarter of 2012, used-unit sales and PG&A didn’t provide dealers a compensating lift. (Continued)