Dealer Sentiment Index: New vehicle intros drive optimism

Publish Date: 
Nov 5, 2013
By Mary Slepicka

Three-to-five-year outlook strongest since Dealernews/Baird Research started Dealer Sentiment Index one year ago.

NEW PRODUCT introductions have been driving much-needed unit sales at dealerships across the country, but again, the mood you’re in depends on the brand you’re selling, according to results from the Q3 Powersports Dealer Survey conducted by Baird Research and Dealernews.

58.4

Dealer Sentiment Index Q3 2013

Vehicle manufacturers producing fresh and innovative products are helping dealers to weather overarching market headwinds – bad riding weather earlier in the year, a volatile economy and more aggressive competition, among others. Dealers reported mixed inventory status, with lower inventory levels largely correlating with brands that successfully released new products during the summer, according to researchers.

That said, the Baird/Dealernews Powersports Dealer Sentiment Index rose for the second consecutive quarter, indicating that dealer outlooks are actually improving. This seems to be because many franchised dealers are now able to look past short-term challenges and are growing more encouraged over future opportunities, said Craig Kennison, director of research operations at R.W. Baird.

New model intros
Dealers continue to report that innovative new-model intros are driving customer traffic and retail sales, often at the expense of other brands. “Polaris is hitting on all cylinders,” Kennison noted. “The 2014 Harley bikes represent the best upgrade in years. BRP dealers love the new Spark PWC [see image], and Honda appears to [have] spurred strong demand with the Pioneer.”

In late October, both Polaris and Harley-Davidson posted strong third-quarter financial reports, with Motor Co. posting a 20 percent sales gain in third quarter and Polaris Q3 revenues exceeding $1 billion. 

Dealers acknowledged that inventory is slightly high, except in the SxS category, but it has improved over previous quarterly reports. Motorcycle and PWC inventory levels remain higher than dealers’ goals.

Traffic still up and down
Dealers attribute lower than desired showroom traffic to an uncertain economy, lack of new products with some brands, and increasing competition from online retail, especially in gear,  accessories and in used vehicles. There was a “slight lift” in parts and service, researchers reported.

Several brands emerged as winners with compelling new product intros during the summer. “Dealers indicated a good response to products from Honda (Pioneer; see image), Polaris (Indian, RZR XP1000, Ranger), Harley-Davidson (Project Rushmore) and BRP (Spark, Spyder, Maverick),” Kennison said. Many Yamaha dealers noted strong demand for the new Bolt.

“The introduction of many new models has made it a pretty solid summer,” noted one multiline dealer.

“Across the board business was up in July and August,” said a BRP dealer. “In September, sales traffic slowed and major units were down, but parts and service were up year over year.”

“The introduction of the Brutus line of commercial-oriented side-by-side has helped demand in this dealership, as I am in an agricultural market,” said a Polaris dealer. “Also, the introduction of the RZR 1000 has doubled the traffic.” (continued)