June 4, 2007 – U.S. sled sales drop 13 percent

Sales of new snowmobiles fell for the 10th consecutive year, with the U.S. market feeling the biggest hit, according to annual statistics compiled by the International Snowmobile Manufacturers Association (ISMA).
U.S. sales decreased this selling season by nearly 13 percent, from 91,670 units to 79,815. U.S. sales numbers have been on a steady decline. Since 2003, sales have dropped by 35,112 units.
The ISMA figures, which are tabulated from April to March, showed a worldwide decrease of 3 percent to 160,318 units. Last year, it was 164,800 units.
On the bright side, Canadian unit sales increased this year, up 6 percent to 45,477 units compared to 42,953 last season. However, sales are still not to the 2005 level of 46,304.
Europe, which includes Scandinavia and Russia, also was up. This season, 35,026 units were sold, compared to 30,237 units in 2006. Sales in Russia alone were up 15 percent in 2007, and 14 percent in 2006.
“If you combine Canadian and European sales, it’s bigger than U.S. sales,”?said ISMA President Ed Klim.
Overall, U.S. revenues are not on the same pace of decline. This is due to higher unit cost, Klim says. Revenues in the U.S. were $685.5 million, about 8 percent down from 2006’s $740.7 million. In Canada, revenues this year were $385.6 million, up from $364 million last year. It’s an all-time high in Canadian revenues, Klim said.
A Reason For The Season
Klim says several economic factors play into snowmobile sales, and points to demand determinants of income, tastes, related goods, the market and consumer confidence.
In the U.S., Klim says he doesn’t see consumer confidence as an issue. “I think we have plenty of confidence,” he said.
He wasn’t as optimistic in other categories.
Growing economies in Scandinavia, and especially Russia, have created new buyers, he said. Canada’s economy also has been out-performing the U.S., he adds.
Certainly the absence of good snow plays a role. Northern Europe and Canada had good snowfalls, he said.
“U.S. sales increased 31 percent in February,”?he said. “The reason was a four-letter word: snow. That leads me to believe that the related good snow, and its availability is the driving determinant of sales.”
As for trails, Finland especially has been building an expanded trail system on a government directive. Klim feels increased trail and snowmobile tourism development is on the horizon in Sweden, and he’s been in discussions with parties interested in developing a Russian trail system.
He notes that demographics also have played a role. “Has there been a change in the people who buy snowmobiles? In the U.S., if you look at it, the average age of a new snowmobile owner is 42,” he said. “Then, ask yourself if there are fewer 42-year-olds this year than last. The answer is yes. So we have to do a better job at expanding the market to the young and the old.”
Then there’s the matter of taste.
“Do younger people have the desire to go snowmobile? Is there a stronger urge for people in Canada to go outside?” Klim asked. “Some think that Americans are too busy inside playing on their computers. Is that influencing sales?”
Developing New Buyers
There are several efforts under way through ISMA and the snowmobile manufacturers to develop new buyers, Klim said.
“We hope that different pop groups show higher interest,” he said. “We hope that young folks take a good look at us and want to go out and recreate. We need to get new folks buying snowmobiles. We’ve got to get them interested in snowmobiling. We have to welcome them. Snowmobilers are a welcoming bunch, but people who don’t snowmobile don’t know that.”
ISMA is behind the development of a Go Snowmobiling marketing campaign, but Klim admits the process of developing it has been slow.
“We know it needs to be done, but there needs to be snow on the ground and there needs to be cold to get people to make that step,” he said. He hopes that if there’s December snow that he’ll be able to do some more test marketing on the program.
He’s also encouraging outreach to non-endemic markets, particularly snowmobile industry and association presence at nonsnowmobile-related consumer shows. He says the Ontario snowmobile tourism group has expanded its show schedule to include golf, general travel, hunting and fishing shows.
“We’re finding that people who are snowmobilers go to these shows, but that there’s also a lot of interest from nonsnowmobilers,” Klim said.
Another major collective effort will be to get potential buyers out on test rides. Klim says this could be a coordinated effort between ISMA, dealers, rental operators and state associations.
“We’ve found that this really works,” Klim said. “The manufacturers are all doing a bit more of the ride stuff, with their sneak peeks. I?think everyone is kind of delving into it, but doing it individually, not collectively. The key is to get the people out snowmobiling.” psb