The Sea-Doo Spark has proven to be a double-edged sword for retailers, according to a new Dealernews/Baird research survey of BRP dealers.
BRP Dealer Sentiment Index
The Spark, introduced in 2013 as an entry-level personal watercraft and priced at $4,999, has been selling briskly, dealers reported, but at the expense of other models and used PWC sales.
“Spark is the only [new product driving demand] but can't make any real money with it,” one dealer said.
“All advertising by BRP is for Spark only,” another dealer said. “Sparks sold out. Have lots of regular in line machines to sell.”
Dealers saw growth in the personal watercraft segment – attributable largely to the Spark – and in the snowmobile segment, with 51 percent of dealers reporting a gain in Sea-Doo share, and 68 percent of dealers reporting a gain in Ski-Doo share.
In the side-by-side market, BRP dealers were generally positive about the company’s products, but said they would like to see a utility SxS vehicle offered by the company, as well as an entry-level ATV. Can-Am’s ATV 2015 lineup includes a new 6x6 Outlander.
Dealers also said that to maintain their certification with the company, they were feeling forced to take on more inventory than they needed – sometimes with the compounded problem of mistakes in the company’s computer system.
“BRP is gaining ground right now because of good consumer demand,” one dealer said. “However, BRP is going to lose many of its good dealers because of unreasonable orders. Let us order what think we will need, not what you think we need. It is very frustrating to be micromanaged by BRP and to see it eat away at our profits.”
Dealers also said one of the byproducts of excessive inventory is discounting, which can cut into their profit margins. And at least one dealer expressed concern that BRP’s initial public offering in May 2013 won’t help.
“I fear the pressures of being a public company will make this worse,” the dealer said.
But overall, dealers held a favorable opinion of BRP, led by a 93 on the 100-scale sentiment index when it comes to innovation.
“BRP is an industry leader when it comes to innovation,” one dealer said. “Their slogan ‘The Ride Says it All’ is 100 percent true: amazing products that customers purchase because of what it is, not because of the price.”
A total of 131 BRP dealers participated in the survey. The company will report its first quarter sales and earnings on June 12.