Jul. 13, 2009 – A season report on retail sales

By Karin Gelschus
Associate Editor
Abundant snow in many areas of the nation
wasn’t enough to get consumers to break out their checkbooks for new snowmobiles. U.S. retail sales are officially down 18-19 percent for this year’s riding season, says Ed Klim, president of the International Snowmobile Manufacturers Association (ISMA).
The United States sold slightly more than 61,500 snowmobiles this year.
Certain states were a large contributing factor to the decrease in sales.
“Michigan, Ohio and Indiana, where we used to make cars, those three states continue to decline,” Klim commented. “Most of the declines we see in the United States in the last few years have pretty much been centered on those three states.”
Klim adds those states have continued to get worse in recent years.
“We have more unemployment in those three states,” he said. “They used to make good money and buy sleds, and now a lot of them aren’t working or they moved to Tennessee to work.”
Dealership Bill Case Polaris in Beach Lake, Pa., felt the heat this year as well. Owner Craig Case said, “We had a not-so-best year. I probably have 50 percent of my machines leftover.”
On the other hand, he sold nearly every used sled he had in stock.
“That’s what everybody is looking for,” Case said. “The used market is very strong. I just had a couple of them left at the end of the season, but I actually got them at the end of the season.”
Despite his new snowmobile sales being down, he says the dealership overall stayed about flat.
“As far as parts and service and everything else, that brought the other end up. We didn’t know it was going to quite hit,” he said, referring to the economy. “With the good snow year, (we thought) people were going to bring it around. It was one of our better years (in terms of snow) that we had in the last couple years. Unfortunately, they were out looking for used stuff, but nothing new.”
New snowmobile sales, however, were fairly decent even after the holidays, says Klim.
“In February we were fairly optimistic because we were doing a lot better than we thought we were going to do,” he said. “The end of the year sales is when the economy plummeted. That basically stopped traffic. That’s what happened in March.
“We thought we were going to be in a little better shape, but people stopped buying everything across the board,” he noted, adding last year’s sales numbers in March were, “pretty good because we had a lot of snow on the ground, and it just stopped this year.”
Despite sales taking a downturn, Klim says overall the industry is in fairly good shape as far as inventory.
“We’ve been careful to watch build numbers,” he noted. “It’s certainly been manageable.”

International numbers
The world’s retail numbers, however, ended up considerably better than the United States.
There were about 49,500 sleds sold in Canada, which is down slightly more than 1 percent compared to last year’s riding season. Klim says he thought they’d actually be up somewhat.
“I talked to people in Ontario and Quebec and their sales were up in those providences,” he said. “They were up a little bit, but they were up. We had a slight weakening in Alberta and British Columbia. That brought it down.”
The rest of the world had an even better year. Klim says almost 36,000 sleds were sold overseas, which is an increase of 9 percent compared to the year ago period.

Staying positive
Industry officials remain upbeat about the snowmobile industry despite a dismal year.
“When you compare us to other product lines, we’re doing pretty good,” Klim noted. “I see other statistical reports: RV industry, the boat business; we did OK, relatively speaking. We’re doing better than the car business. A lot better.”
The optimistic views also were evident at the International Snowmobile Congress at Prince Edward Island in early June. Klim says there was a lot of support from snowmobilers and the tourism council.
There were approximately 300 people who attended this year’s International Snowmobile Congress in early June at Prince Edward Island, notes Klim.
“That’s a big turnout for PEI (Prince Edward Island),” he said, “especially with the state of the U.S. economy. The ISC rotates between regions every year. The country is broke up into three regions: Northeast, Midwest and West.”
Next year the International Snowmobile Congress will be held in Iowa City at the Marriott. The following year in 2011, the congress will be held in Calgary, and in 2012, it will be hosted in Massachusetts.
The ISC staff plans the event years in advance due to costs and more options. “(Clubs/organizations) can put in proposals to sponsor it,” Klim said. “We get some really good proposals.”