Taking the Pulse of Powersports Retailers

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Joe delmont Mike Brugioni powersports trends staff reductions

MIKE BRUGIONI PROBABLY will talk with more dealers this year than anyone in the country, something like 7,500 interviews with more than 4,000 individual dealers.

Brugioni is the top dealer analyst at Power Products Marketing (PPM), the Minneapolis research firm that tracks production and retail sales of powersports companies in North America. (Brugioni and other PPM analysts regularly prepare reports on industry segments that appear in Dealernews.)

Brugioni understands what he's talking about. He's responsible for all the phone surveys done at PPM, a post he's held for more than five years. In addition to talking with dealers, he helps develop the questionnaire and writes the summary report. He also conducts personal interviews on major projects. His research helps collect product information on powersports units and agricultural equipment. An experienced sales manager, he has more than 15 years of experience in producing sales programs, phone surveys and sales questionnaires.

I asked Brugioni what he's heard from dealers and how those comments compare with what he heard last year. As you might expect, he had some interesting observations.

Financing. One of the most common subjects brought up by dealers is financing, both for customers and their business. "'Where are people getting money,' they ask me," says Brugioni. "It's one of the biggest issues they have, and I hear some really crazy ways they work around financing."

Brugioni says that it's obvious when an OEM offers attractive financing because retail sales jump. "Rebates to dealers work well," he says. Some OEMs like Kubota work very hard at this. In addition to rebates, retail promotions and incentives have worked very well this year, he says. "Customers are much smarter this year," he says, "and they shop around a lot more, dealers tell me. They wait and look for promotions and they ask better questions, too."

Customer relations. Somebody is talking to dealers about being nice to prospective customers, and they seem to be listening. "The phone manners are much better this year than they have ever been. Now, when someone answers the phone, no matter what time of day it is, they are a lot more interested in helping me." And when he gets put on hold, he's more likely to hear public service messages or messages about promotions and products rather than silence or loud music.

In general, salespeople are much more helpful, too. "They're more willing to take time to talk. It used to be, they would give me a [sales] number, and that would be it. Now, they will talk about business in their area, and what they are doing [in their market area], and they are much more willing to help analyze sales and talk about their market situation and their customer relations." Of course, they're also interested in finding out what Brugioni hears from other dealers.

Government intervention. Brugioni sees a continuing shift in sales from ATVs to UTVs. But at the same time, dealers are concerned about how sales in both of these categories might be affected by government intervention in two areas: safety regulations that would increase costs and reduce demand, and restrictions on the ways and the places that these vehicles can be ridden. "It's much more of a concern this year than last year," Brugioni says. On the safety issue, there's been more discussion about the CPSC and the Consumer Product Safety Improvement Act (CPSIA), passed last year, which limits lead content in children's machines.

Staff reductions. It's obvious to Brugioni from his dealer calls that they are cutting staffs. "It used to be very difficult for me to get through to the sales manager or owner because I had to go through maybe four or five people," he says. "Now, often I get right to my person because there's just a couple of them at the store."

OTHER OBSERVATIONS

  • Inventories are down because dealers say they can't afford to be warehouses for the OEMs. In relation to this inventory situation, dealers say they are cooperating more with each other to reduce OEM orders. For example, if three dealers determine that their market can sell 20 ABC models of XYZ brand, they might split the order three ways. Then they'll trade the bikes among themselves as the bikes sell.
  • Reducing Lines. Multiline dealers tell Brugioni that they are considering dropping lines to cut their costs. "'It's not like I have money in the bank to play this inventory game with all of these lines,' dealers tell me," Brugioni says.
  • Cheap, cheap. Dealers say they are looking now, more than ever, for low-price options to satisfy consumer desires. "No matter what kind of survey I'm doing," he says, "the cheapest things available are going the fastest. It's true across all categories." Perhaps somewhat surprisingly, this doesn't apply to Chinese brands. "I haven't heard people talking about adding Chinese lines," he says. "Dealers aren't talking about them as much now as they used to."

Joe Delmont can be reached at jdelmont@dealernews.com or 952-893-6876.