Despite being off to an average start, dealers looking forward to 2015 sales
It takes dedication, hard work and sales skills to go the distance, and dealers from all over North America are seeing how they measure up in early 2015. Weather, economy and location had varying effects on dealership success, but dealer outlook remains positive moving forward, based on results of the results of Q1 2015 Powersports Business/RBC Capital Markets Dealer Survey. A total of 119 dealers from 40 states and six Canadian provinces completed the survey.
The states not represented are Georgia, Idaho, Maine, Nevada, Oklahoma, Rhode Island, South Dakota, Vermont, 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.
Combined, the responding dealerships sell more than 45 brands of motorcycles, ATVs, side-by-sides, snowmobiles and PWC. A total of 109 of the 119 respondents (92 percent) are single-store owners.
Slow start out East
Donald Meyers Jr., partner and president of Harley-Davidson of Baltimore in Maryland, told Powersports Business that weather was a big issue for the dealership in the first quarter. “Spring has finally hit here, but it’s just been one of those years. Temperature and wet weather have been an issue,” Meyers said. “We’re a little bit slower getting out on the season.”
Jody Cole, owner of Headingley Sport Shop in Headingley, Manitoba, agreed that the winter had affected her dealership’s sales as well. “We had a milder winter than most, which meant we had a terrible year in snowmobiles. We had hardly any snow, but that kind of helped the motorcycle business get started off a bit earlier.”
Many dealers experienced the same results from the winter months. Forty-seven percent of dealers reported their business performance was “below plan” in the Q1 survey. Of those surveyed, only 21 percent of dealers responded that Q1 business was “above plan.”
Headingley Sport Shop was among the dealerships that were on plan for the year. “Some areas of the business were up, and some parts were down, but they all kind of leveled out,” Cole said. “I think the main thing is always being positive and putting your best foot forward.”
The success trade-off between different product segments was a trend seen in multiple dealership profiles. While one area, i.e. snowmobiles, suffered from a mild winter, another area, i.e. motorcycles, benefitted from an earlier season start. Survey results found that 24 percent of dealers reported snowmobile sales were down 30 percent or more in Q1, while the majority of dealerships experienced flat sales or small percentage increases in motorcycles.
Customer interest positive
Despite the varied weather effects, the majority of dealers also reported that customer interest seemed to be moving in a positive direction, with 34 percent reporting it was “somewhat better.” Mark Holmes, owner of FDR Honda Kawasaki in Paducah, Ky., attributed this interest to falling gas prices and a resulting rise in the economy.
“Gas prices have gone down quite a bit, so people have a little more spending money. We’ve had a couple businesses come into our area and provided more jobs. So it looks like spring is going to be better; I just hope it continues,” said Holmes.
Holmes wasn’t the only dealer to remain cautious of the economy. Raymond Walters, general sales manager of Got Gear Motorsports, in Ridgeland, Miss., says that OEM incentives and activity within the dealership has helped customers commit more to buying. Got Gear, which sells Polaris side-by-sides, among other vehicles, has had to deal with heavy inventory in its first quarter.
“The incentives from Polaris helped big time,” Walters said. “That’s what helped us stay flat. I think they realized that they were heavy on inventory in those side-by-sides. Incentives give a reason to drive customers to the storefront.”
Walters wasn’t alone, as 49 percent of dealers reported that their side-by-side inventory was too heavy in the first quarter.
Meyers agreed the OEM incentives can be a useful tool to get customers through the door, but they don’t necessarily make or break a sale.
“You’re not going to pay all of your bills with incentives; you’re just trying to create traffic. [Customers] will come in, look and apply. They may not qualify, but at least it got them to come in to see if they did,” said Meyers.
Fifty-four percent of dealers reported that new unit sales were “average” to “somewhat better” in comparison to the previous year.
Heading into the rest of 2015, most dealers expect to see increases in every segment, except scooter. Meyers, like many others, is excited to see how his business performs during the rest of 2015. “We’re going to be up. If we’re up 5 percent I’d be happy. If we’re up 10 percent, I’d be happier,” he said.
The following dealers who completed the Q1 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.
Robin Clark, Leisure Time Sports, Tomah, WI
Dan Notte, Cross Country Powersports, Metuchen, NJ
Mick McCreary, St. Joe Harley-Davidson,
St. Joseph, MO
Randy Martin, Cycle Center of Denton, Denton, TX
Bryan Moen, Big Sky Harley-Davidson,
Great Falls, MT
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.