FLOOR TRAFFIC AND SALES: HARLEY BUCKS Q4 TREND
Dealers reported mediocre floor traffic, citing weakness around the November election and December holidays. Dealers in the Northeast reported weaker trends, while traffic was stronger in the South.
Harley dealers indicated better customer flow than the rest of the industry, with traffic trends remaining positive in each month of the quarter. (Click on the comparison bar charts to see enlargements.)
Dealers again reported sluggish demand for new vehicles, but unlike last quarter, areas such as used vehicles and PG&A did not provide a compensating lift.
“Service has changed to customers buying their own oils and filters,” a dealer said. “We are handling problems (like neck bearing, wobbling issues and tire issues) arising from customers continually doing their own services.”
Harley dealers fared better, reporting strong retail trends across all areas of the dealership. But there were exceptions. “October was the worst month for new and used motorcycle sales that I have experienced in years,” one Harley dealer said.
Side-by-side sales remained healthy. ATV sales remained weak, with market leaders Polaris and Honda trending slightly positive while the other brands struggled.
“Side-by-side sales are ‘OK,’ but we are not selling a side-by-side for every ATV we have lost,” a multiline dealers said. “In my market, big cruisers and sportbikes are very soft. Profits are from used inventory. … The buyers we do have are bargain hunters and come armed with an armload of Internet prices to beat the sales staff with.”
Many dealers expressed frustration with margin compression due to OEM pricing, local competition and Internet discounters. “Internet sellers have a sales tax advantage that is crushing the tradition in store retail,” a dealer said.
“Local price competition on our No. 2 brand is driving prices to wholesale levels,” a dealer claimed. A BRP dealer said: “Our main competitors are other dealers of the same brand not holding MSRP.” And one dealer was “tired of seeing items that we buy through our suppliers at places like Amazon, offering them on the Internet below dealer costs.” (Story continues.)