By Jeff Hemmel
The arrival of summer has come at an interesting time for PWC dealers. Gas is at an all-time high, consumers have concerns about the economy and yet, studies indicate Americans are interested more than ever in making the most of their leisure time.
Powersports Business recently looked into how the OEMs are helping dealers not only make the sales pitch, but close the deal, in these tumultuous times.
All About The Financing
Like the automotive industry, the PWC industry is turning primarily to financing incentives to put customers on a new ride now, rather than later.
“Sea-Doo recently launched an advertising campaign where consumers showed a lot of interest to buy our products,” acknowledged Sea-Doo’s Louis Levesque. “However, consumers are waiting to see what is going to happen with the economy, therefore we need to invest to make them buy now.”
To that end, Sea-Doo has gotten aggressive. Buyers can choose between a trio of offers, including an interest rate as low as 0 percent APR for 36 months on either the GTI or GTI SE. Alternatives include a double warranty period (estimated at an $859 value for the top of the line 255 hp models and $759 for 215 hp and below), or an APR as low as 3.9 percent for a longer, 60-month term. The deals are good on any new 2006, 2007 or 2008 model and as always, are dependent on buyer credit.
The current promotion expires July 10. “Unfortunately I can’t share with you our upcoming plan,” Levesque said, “but you can count on Sea-Doo watercraft and sport boat to support consumers and our dealer network in this difficult economic time.”
Kawasaki is also in the tail end of its current promotion. The “Kawasaki Go Green Sales Event” is the company’s biggest sales promotion event of the year, says Russ Brenan, Kawasaki’s public relations supervisor. The promotion, which ends June 30, promises low monthly payments for new Jet Ski watercraft using the Kawasaki Good Times credit card. Dependent on consumer credit, the promotion offers 6.99 percent APR and low monthly payments for 24 months — a $39 payment for purchases up to $5,000, $59 from $5,001-$7,500, $89 from $7,501-$10,000, $109 from $10,001-$15,000 or $149 from $15,001-$20,000. Accounts that remain current after the 24-month period will be billed at 15.99 percent APR and require regular minimum monthly payments. The standard rate is 17.8 percent APR. For accounts that do not stay current, the promotion is canceled and the interest rate goes to the default 21.8 percent APR.
Like Sea-Doo, the company did not provide any details on what to expect after June 30.
Yamaha is likewise offering a credit card-based promotion, which is valid through July 31 on purchases of any new Yamaha WaveRunner. Dependent on credit, the promotion offers an interest rate from 6.99 percent-14.99 percent and payments from $59-$189 for 24 months. Beyond that period, the standard APR of 12.99 percent, 16.99 percent, 18.99 percent or 22.99 percent apply. Accounts not current cancel the promotional offer and are billed at the default interest rate of 24.99 percent. In addition, buyers of select models — the VX Sport, VX Deluxe and VX Cruiser — are eligible for $300 in free Yamaha Genuine Accessories.
Like many OEM reps, Honda’s Tim Patnode admits there is cause for concern, but also acknowledges the opportunities that currently exist in the market.
“Gas is high and the prices are a drag on the economy,” said Patnode. “However, we see great opportunity for us given the efficiency of our products and the very positive results of our current sales program, ‘Straight Deals.’ While this program has many elements, the flexibility and choice we have with our retail financing is a good example of the depth of our current promotions.”
Straight Deals offers consumers low fixed rates and fixed payments. Customers can choose an installment or a revolving program, and dealers earn participation on both programs. Interest rates are as low as 7.9 percent (dependent on credit) for loans of $10,000 or more for the life of the loan, and 8.9 percent under $10,000. No interest and no monthly payment are charged for the first 90 days. A 3.99 percent option is also available for 36 months to customers with superior credit. “When you combine our financing with dealer and customer cash incentives, all we need to talk about is creating footsteps and phone calls. To this end, dealers are benefiting from a strong national advertising and a generous co-op program.
“With the national advertising we are able to leverage our strength as a large company and the co-op helps dealers place their message in the best medium for their area.”
New interest rates and incentives are just one way to sweeten a sales pitch. Another is to showcase your product in a new light.
“Today’s customers are looking to make a smart choice by conducting more research, putting greater emphasis on factors such as fuel efficiency, and they are expecting great value,” said Yamaha’s Brian Ceti. “We have been addressing these areas by promoting Yamaha’s industry-leading fuel economy, the fact we have the only product line that is optimized to run on 87 octane fuel, and that our exclusive Low RPM mode can reduce fuel consumption by 26 percent.
“Having the largest tank is not an answer; customers want to see an impact when they are paying at the pump.”
Yamaha’s decision to tout the Low RPM mode as a method of fuel-conservation is an interesting marketing tactic. Originally designed as a way to keep speeds lower for young or novice riders, the concept followed Sea-Doo’s introduction of the Learning Key lanyard, a secondary safety lanyard that included a computer chip designed to limit the boat’s top speeds.