FRANCHISED DEALERS reported higher consumer demand July through September, but sales remain sporadic -- and depend highly on where the dealer is located and the vehicle brands it carries, according to the results of the Baird/Dealernews Q3 Powersports Dealer Survey.
“Big picture, we believe consumers are becoming slightly more confident and may become more willing to spend if monetary policy creates the impression of equity in the housing market,” said researchers. “Dealer sentiment indicates the environment remains difficult – with skinny margins and a reluctant consumer – but fresh products from some manufacturers have fueled optimism.”
The main findings:
- Retail is up slightly, if you have the right products. “Dealers reported mixed retail as the economy sputters, but fresh and innovative products had no trouble finding buyers,” Baird said. Dealers reported choppy sales, while others reported regional strength but largely in rural markets. Service revenues are up, but PG&A sales fell.
- UTV/SxS market continues healthy. As more quads came to market in Q3, led by the Polaris Ranger and RZR, the Arctic Cat Wildcat and Can-Am Commander, dealers reported strong consumer interest. The ATV category, researchers said, remains depressed “but appears to be close to a bottom. Can-Am and Polaris products enjoyed the most ATV growth.”
- North American and European brands remain strong. Harley-Davidson, BMW, Can-Am and Polaris dealers posted better growth rates than their Japanese-brand counterparts, according to the survey.
- Dealers are mostly comfortable with inventory. “We believe unit inventory is trending slightly higher, but better retail and a brighter outlook left dealers more confident than three months ago” when the previous survey was conducted, Baird noted. Brand often determined a dealer’s comfort level. “Polaris dealers want more SxSs, BRP dealers want more Can-Am ATVs, and Harley dealers want more bikes,” researchers noted.
- Sentiment remains mixed. “The Baird/Dealernews Powersports Dealer Sentiment Index indicates a mixed outlook in which brand matters,” researchers said. “Based on current conditions, Harley-Davidson and Polaris dealers are the happiest.”
SALES UP, BUT UP AND DOWN.
Dealers responding to the survey reported up-and-down traffic in July, August and September and cited a variety of economic and local factors for it. "I’ve seen people spending money this past quarter, but as September went on I saw the floor traffic slipping away fast,” said one dealer. “[We have] had some days as if it were January-type business. Still, profit was up in all three months compared to last year… but we worked our ass off for it.”
“It’s a very different year,” noted one ATV, motorcycle and scooter dealership. “One month we will be way down in sales compared to a year ago, but then the next month (or two or three months later) we will be way up. Overall, we are slightly up, but month to month is still quite scary.” (continued)