Vehicle Margins Take A Hit

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For about 350 dealerships across the country, profit margins on motorcycles aren't what they used to be. RPM Group reports that vehicle margins for its network of 20 Group dealers shrunk an average of 2 percent between 2006 and 2007.

The RPM 20 Group dealerships skew toward larger stores and include about 80 Harley-Davidson retailers. Preliminary sales data collected by RPM reveal that new-vehicle sales margins declined to 16 percent in 2007 versus 18 percent per sale in 2006. "Inventories are really high, and it's harder to drive people in the door," says Sam Dantzler, president of RPM. "Dealers have accepted the fact that they're going to have to take less margin."

Honda dealers, he says, have been particularly hard-hit. "Several of our Honda-only dealers are in the single-digit gross profit percentage," he notes. "They're running 6, 7, 8 percent gross profit on Honda."

Arlo Redwine