After seeing business progress in the Q2, dealers remained cautious but positive heading into the next quarter. Varying customer traffic, weather and buying interest were among the reasons they’re feeling this way, based on results of the Q2 2015 Powersports Business/RBC Capital Markets Dealer Survey. A total of 141 dealers from 40 states and two Canadian provinces completed the survey.
The states not represented are Louisiana, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Vermont, Virginia, West Virginia and Wyoming. Dealers from those states who are interested in participating in the second quarter survey should send an email to PSB Editor in Chief Dave McMahon at email@example.com and request to be added to the list.
Overall, the responding dealerships sell more than 47 brands of motorcycles, ATVs, side-by-sides, snowmobiles and PWC. A total of 128 of the 141 respondents (91 percent) are single-store owners.
The majority of customer traffic responses in Q2 were “about the same” or “somewhat better” in comparison to the same period last year across all segments. Among motorcycle dealers, 31 percent of dealers thought that customer traffic was “somewhat better.”
Mark Moses, owner and general manager of Indian Motorcycle Charlotte in N.C., says as far as customer traffic is concerned, his dealership saw somewhat better door swings and was on plan for Q2.
From the responses of dealers in the survey, the majority reported inventory as “about right” across all segments, with heavyweight motorcycles and sport bikes teetering on “too heavy.” While customer traffic has been positive, Moses says that if inventory levels were a bit higher, the dealership would have been above plan and more able to meet the growing demand.
“It’s been a really good year for the Indian brand in general.” Moses said. “It’s an old brand that recently has gained notoriety, and people are starting to consider it as a viable alternative to the rest of the products that are in the market.”
Many dealers had similar experiences in this quarter. Fifty-eight percent of dealers reported their business performance was “above plan” or “on plan,” a nice change from Q1’s “on plan” or “below plan” majority.
Aaron Moon, sales manager for Southland Cycle Center in Garden Grove, Ca., experienced lower customer traffic despite consistent buying interest.
“We keep trying to gauge different things, and floor traffic has been a big one. There’s just not as many door swings as we normally see,” Moon said. “There’s interest, but people are less in the position to make those purchases.”
Moon explains that while interest is still high, the selling process has gotten longer with customers making multiple visits before buying any units. However, his plan for Q3 includes relying on the pre-owned ATV market. “We have had good luck selling pre-owned units. It seems to be a good market, if you can get them at the right price,” Moon said.
Unlike in Q1, when weather proved as a problem for several dealers, snow sales in select states brought some dealerships back up to plan in Q2. Dave Vincent, owner of Team Vincent Motorsports in Ayr, Ontario, says weather is main contributor to his Q2 above plan results.
Matt Gisch, parts and accessories manager at Danner Motorsports in Inver Grove Heights, Minn., experienced similar spring sales that led to an above plan Q2.
“The economy has helped. We’ve just had better sales than we’ve had in the past. Especially with our preseason snowmobile sales, and also with our service work in general, this summer is looking really good,” Gisch said.
Of the dealers surveyed, 71 percent reported their outlook was “somewhat better” or “about the same” heading into Q3, while only 26 percent said “somewhat worse.”
Vincent remains positive on how weather and sales will affect his dealership’s Q3 results. “Our spring break deals on snowmobile sales were through the roof; those sales aren’t going to come into the books until October through December,” he said. “They’re way above what we’ve ever had before and expected.”
“ATVs are kind of an odd deal; it’s not steady. We had a surge on them for a couple months,” Gisch said. “Our service business is going to definitely stay strong all the way.”
“We’re excited about new product,” Moses said, looking forward to the Q3. “Even though we’re headed toward the slower part of the year, hopefully the new product will carry us through to the next quarter well.”
The following dealers who completed the Q2 2015 Powersports Business/RBC Capital Markets Dealer Survey were selected at random to win a $100 Best Buy gift card each, courtesy of RBC Capital Markets.
Steve St. John, Deyer South Powersports,
Karen Shaw, Belleville Sport and Lawn,
Craig Kissell, Kissell Motorsports,
State College, PA
Karl Kegel, Kegel Harley-Davidson, Rockford, IL
Scott Schmidtman, Westside Motorsports,
All dealers who complete the survey receive a PDF analysis of the results from RBC Capital Markets and are eligible for $100 Best Buy gift cards.