November 30, 2009: BRP in 2010: A positive outlook and new segment

By Karin Gelschus
Associate Editor
Despite a 5 percent decrease in its dealer network and a major decline in the marine market, BRP continues to push forward with R&D, new finance options, increased Spyder sales, entry into the trailer market and plans to enter the UTV segment.
While BRP CEO José Boisjoli said the number of dealer closures is “bothering me,” he went on to say, “We are past the bottom, and we’re starting to see some positive movement. Overall it’s not an easy time for any one of us, but we are happy with the progress we’ve made.”

Overcoming economic times
BRP’s anticipation of coming out of the recession in a better position than when it entered comes from sticking to its forte of R&D. Although Boisjoli says they’ve slowed down slightly, they’ve continued to push product innovation and new technologies with the 2010 watercraft lineup and the product expansion of the Spyder.
“We have slowed down compared to our planning two years ago,” he said in an interview with Powersports Business, “but we’re maintaining product innovation in each product line.”
Since BRP did its planning in July, Boisjoli says they’ve stayed on track the past couple months, and have a positive outlook for next year.
“We plan on having a small growth in 2010 and more momentum in 2012. We believe it’ll be three years before full recovery,” he said. “Dealers are getting better. We can expect a few more (dealer closures) in the next six months. Since the beginning of the crisis, we lost about 75 dealers in the United States, but I think the worst is behind us.”
Helping with sales is more financing options for consumers. In September 2008, BRP signed on U.S. Bank and in December 2008, it signed on Sheffield.
“The approval rate is still lower than what it was before we had the recession. We’re significantly above what it was last year at this time,” Boisjoli said. “In the U.S. we’re happy with those two (institutions). In Canada we also appointed one earlier this year. We intend to stick with those three for the time being.”

Entering new segments
The manufacturer also is sticking to its plans of entering the UTV business. Boisjoli says expect to see the new model(s) some time in the second half of 2010.
“There are many players already in this industry, and we had a chance to look at the trends in the industry,” he said. “It will be a slow introduction like any of our other product lines. It will be a phase approach. Not every ATV dealer will have a side-by-side.”
The phase approach will be much like what BRP did with the Spyder, explains Boisjoli.
The company also entered the trailer industry, featuring the RT 620 for the Spyder.
“It was extremely well received by the dealers and consumers,” Boisjoli said, adding they might come out with another one for the touring Spyder. For now, BRP is sticking to the sport Spyder trailer and the Sea-Doo trailer.

Three-wheel expansion
Practically unheard of this year, BRP had a sales increase for its Spyder in the ’09 season compared to the prior-year period.
“The Spyder did grow, small numbers, but we’re happy with the results. The Spyder should continue to grow. Don’t forget we now have two platforms instead of one,” Boisjoli said, referring to the addition of the Spyder touring model, which was introduced in September. “We believe this industry could become as big as snowmobile and watercraft for us.”
BRP has no plans in its short- or mid-term plans to expand its on-road division beyond three wheels, notes Boisjoli.
“For the time being, we will focus on three wheels,” he said. “We intend to continue to expand the lineup. We plan to grow. We prefer to focus on three wheels for the time being and do a good job instead of going to two wheels.”

Snowmobile outlook
Boisjoli says Ski-Doo has the best platform in the industry, Rev X, and they’ll continue to expand on that.
“BRP has always been there to push technology and we have a good plan going forward for our product line,” he said. “We’re the only company with a direct injection. We want to continue to expand on those successes.”
To help kickoff snowmobile floor traffic in Ski-Doo dealerships, BRP expanded its Million Dollar Club Support program to the United States. While the company did not have final program information at the time of the interview, Boisjoli says they’ve received a lot of positive feedback. “I’m hearing a lot of good comments from most of the dealers,” he said. “It’s something that worked well. It’s something we could expand on another product line.”
The other segments, including three-wheel and UTV, will have more business to consumer marketing campaigns next year, notes Boisjoli.
“Our philosophy is based on bringing traffic into the dealership,” he said. “You’ll see more marketing in 2010, more marketing campaigns direct to the consumer.”
Along with marketing, Boisjoli says BRP plans to do a bigger push in PG&A.
“We’re pushing a lot to bring more parts, accessories and clothing to the industries,” he said. “It’s a good source of revenue for dealers and us. It also improves the customer experience.
“The average amount of accessories for (a Spyder unit) is about $1,500, which is very, very good,” Boisjoli noted. “We’re going to continue to grow those numbers. You have to come out with the right accessories and programs, and after that, you need to share the best practices with the dealers. That’s what we’ve done, and it’s working well.”

Marine slide
The PWC market has been as hard hit as the rest of the marine markets, says Boisjoli. Therefore, BRP plans to reduce its inventory in the 2010 season.
“The marine industry is very, very tough,” he said. “We feel that it’ll get better next year, but we have plenty of inventory. That’s why we’re planning to produce less marine product than last year. We will reduce our build for watercraft and sports boat, and outboard (production) will be about the same. Dealers can clean out their inventory as much as they can.
“Consumer demand in North America and Europe are still low compared to what it was two years ago,” Boisjoli said, referring to all powersports segments. “We believe at the end of all this, we’ll come out stronger than before the recession because of the decisions we’ve made.”

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