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Q3 dealer survey shows increased sales, optimism

By Dave McMahon, Editor in Chief

Hope you all valued your time during the Powersports DEALER Seminars @ AIMExpo and the Power 50 Awards Dinner, both held in Las Vegas during the most important industry event of the year, AIMExpo.

We’ll be off to EICMA in Milan next week, we’ll report on recent travels to Paris for the launch of new Kymco scooter in an upcoming edition, and you can read all about staff reporter Abby Larson’s China debut for the CFMOTO dealer meeting. But after spending some serious quality time alongside exhibitors and dealers at AIMExpo, it still is far and away the most important show for the U.S. market of dealers and those who aim to sell their wares through dealerships.

And while reflecting on the importance of those two days for dealers who attend, OEMs can join in an exercise with me. If you are a part of a worldwide organization — yes, that’s all of you — do us all a favor right now and block out Sept. 26-29 on your collective calendars. Location? Columbus, Ohio. It gets tiresome year after year to learn of the myriad of OEM events that are taking dealers away from their most important trade show of the year.

As always, we were excited to see so many familiar faces in the seats at both the seminars and the Power 50 dinner. These are two of the most important days of the year for Team PSB, as we try to provide profit-building seminars that fit a range of dealerships — from large to small, Harley to single-line metric. The conversations we have with dealers before and after the seminars are some of the most important of the year. Often, those chats become fodder for stories that you will be reading in upcoming editions of PSB. How’s this for starters? What are dealers doing from a sales staffing standpoint to appease both the in-store customer as well as the one who wants his or her online lead replied to right now? One dealer remarked that he had a longtime customer come in recently, only to not be greeted in typical fashion. The problem? There were four salespeople on staff, but all four of them were tending to online leads and no one greeted the in-store customer. That’s a problem, but one that’s not easily remedied with online leads now providing dealerships with half of their total sales leads.

And there were plenty of others stories of dealership challenges and successes in 2018 that we’ll be sharing in upcoming editions. The good news, for all of us, is that our recent Q3 Dealer Survey that we conduct with our partner at BMO Capital Markets shows that the retail environment was pretty darn good in July through September.

Only dealers who complete the survey receive the results. This quarter, we are highly appreciative of the 95 dealers from 40 states and four Canadian provinces who took the survey. Yamaha (38 dealers) and Polaris (35) had the greatest representation, followed by Honda (34), Kawasaki (28), and BRP brands (26).

Johnson reports that “performance results continue to be very strong, with solid year-over-year gains. Dealers saw improvements in sales and reported stronger outlooks. Underlying metrics like inventory and profitability continue in the right direction. However, concern about tariffs is beginning to weigh on dealers, both from a supply and a demand perspective.”

Johnson continues to offer that “still, despite growing concern over the impact of tariffs, the business of selling powersport products appears very good. Not only did our survey reveal strong current sales (77 percent reporting growth compared with 54 percent last year), but also solid outlooks (41 percent said their outlooks improved vs. 19 percent who said they deteriorated, and up from 32 percent who said their outlooks improved last year). Channel inventory continues to improve, with only 20 percent of dealers calling out inventory as too high compared with 34 percent last year. Profit margins are better, with 44 percent of dealers seeing an improvement compared with 27 percent who said margins were worse. This ratio improved compared with last year when 32 percent saw margins improve and an equal amount, 32 percent, saw margins compress.”

As for brands segments, Johnson offers that the marine segment “continues to be the strongest performer, with personal watercraft (PWC) leading the way and the few boat dealers we have in our survey following close behind. Side-by-sidevehicles are also strong performers, while motorcycle sales continue to lag.

"The best-performing OEM continues to be BRP … with extremely strong readings on Can-Am off-road and Sea-Doo PWC, good performance in a weak snowmobile category, and an improving outlook for Spyder with the new value-priced Ryker. Polaris … seems to have received an uptick in approval from dealers while CFMOTO and Mahindra continue to make upward progress. The Japanese OEMs score poorly.”

And for the second consecutive survey (and only the second time overall), more dealers said sales were above plan (31 percent) than said they were below (26 percent). This compares with 33 percent/31 percent in 2Q18 and is much better than 17 percent/49 percent in 3Q17.

"We find that dealers tend to be more optimistic about the future than current results would indicate, and thus, results tend to fail to live up to high expectations. However, a second consecutive month of results exceeding expectations is a very bullish indicator for the powersports industry,” Johnson reports. PSB

Dave McMahon has been editor in chief of Powersports Business since 2012. Contact him at 763/383-4411 or dmcmahon@powersportsbusiness.com.

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