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From the Editor: Surveyed dealers report soft Q1 vs. their business plan

By Dave McMahon

Thanks to the 127 dealers from 38 states and five Canadian provinces who participated, we wrapped the Q1 Powersports Business/BMO Capital Markets Dealer Survey just before this issue went to press. We’ll get into further detail about the survey results in the next edition, but it’s worth noting that 46 percent of dealers replied that their Q1 2017 business performance was below plan (compared to 41 percent in both Q4 2016, and Q1 2016).

In addition, 40 percent of dealers reported that they were on plan for Q1 2017 (compared to 36 percent in Q4 2016, and 38 percent in Q1 2016). Finally, a total of 14 percent of dealers said that they were above plan for Q1 2017. That number was 22 percent in the same quarter a year ago, and it was as high as 23 percent in Q4 2016.

Overall business conditions for Q1 were reported as strong or very good by 46 percent of respondents. Average business conditions were reported by 35 percent of dealers, and 20 percent of dealers reported either poor or very weak conditions. A total of 42 percent of dealers reported good conditions, up from 35 percent in Q4 2016 and up from 28 percent in Q3 2016.

New unit sales, meanwhile, remained on the down side of flat compared to Q4 2016, with 36 percent of dealers reporting either very strong or good unit sales, compared to 37 percent in Q4 2016. For the third quarter in a row, 32 percent of dealers reported average new unit sales. And an additional 32 percent called new unit sales either poor or very weak, up from 31 percent in Q4 2016.

You can read about the inventory overstock at snowmobile dealerships on Page 30 of this edition, but it’s worth noting that 63 percent of dealers characterize their overall new unit inventory as about right, with the other 37 percent saying it’s “too high.” There were a total of 0 dealers who said their overall inventory level was too low.

Using the data points we often turn to gauge the retail marketplace, it all adds up to a generally poor start to the year in Q1. CDK Lightspeed Same Store Sales data showed overall gains of 0.5 percent in January and 1.2 percent in February, followed, as you can see on Page 8, by a dramatic 5.5 percent decline in March. It’s the largest year-over-year decline in a month since an 11.3 percent drop off in March 2013 vs. March 2012. March 2017 also was the worst showing for major units since an 11.4 percent decline in March 2013. It’s the sixth time in the past 24 months that all four of the Lightspeed data points (parts, service, major units and overall) have overall pointed downward.

Suffice to say, the upcoming key months of sales leading into and during the riding season will be awfully important to many dealers.

Key products to consider

With the idea that a rising tide lifts all of us industry ships, we’re always trying to find ways to unearth products that can help dealers grow their bottom line. We’ve done it for 18 consecutive years with the Nifty 50, which recognizes the top products to consider adding to your lineup in 2017.

Big Bike Parts and Great Day, Inc., are two of the latest companies to recognize the people behind their innovative products. Haven’t seen your winning photo here yet? 

Send me a pic to join Barnett Clutches and Cables and National Cycle right here on these pages next month. 

Dave McMahon is editor in chief of Powersports Business. Contact him at 763/383-4411 or dmcmahon@powersportsbusiness.com.

 

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