Nov. 12, 2007 – PWC dealers staying afloat

By Jeff Hemmel
PWC Editor
While the PWC industry appears to have had a successful 2007 season, by the end of the summer sales season rumors persisted of a decline, particularly in two key states, California and Florida.
Powersports Business recently called on a random sampling of dealers nationwide to get their thoughts on the year. And while we did find legitimate reason to be concerned, the final impression is the industry’s ship appears to remain afloat.
However, just don’t expect it to break any speed records.

Status Quo
According to information gleaned from state registration data, Florida indeed took a hit early on. The data, which measures yearly registrations on a rolling 12-month basis from August to July, shows 8,932 vehicles registered in California from August 2006-July 2007. That closely compares to the 9,074 registered in the previous 12-month period. Florida, however, dropped nearly 10 percent, with 9,784 vehicles for the ’06-’07 period, compared to 10,668 in ’05-’06.
Despite that news, industry insiders confide that a slight surge in the latter half of the 2007 sales season, not reflected in these state registration numbers, should result in 2007 finishing at basically a dead heat with ’06.
“State registration data will show it’s pretty flat, and our internal sales numbers for the industry would confirm it,” confided one OEM source. “There was an uptick in the last couple months of the season, that brought it from slightly down to almost perfectly flat.”
“The OEMS stepped up over the past couple of months with some aggressive programs to help dealers clean their inventory levels and most are sitting in a good position heading into 2008,” added Tim McKercher of WaterTop Unlimited, the agency that handles much of Sea-Doo’s media relations. “As the season ends, overall both Sea-Doo dealers and the industry are in good-to-fair shape and are looking for a great 2008 with incredible new product to market.”

Finishing Strong
Certainly, there are success stories in 2007.
“The season actually went better than we thought,” offered Dave Heimes, sales manager at Rochester, New York’s McMillan Marine, a Yamaha dealership. “We actually ran out of product early. We ordered more, and before it even showed up, we sold those. We did the same as we did for the last four years, 50-75 watercraft and 12-14 jet boats. We were completely sold out of new, used, demos, everything, by the end of the season. It’s happened every year so far.
“We just ordered another 80 units and 14 jet boats, and they’re just starting to roll in now for the ’08 season.”
“We probably double in sales on those things every year,” added salesman Louis Savaglio at Kenosha, Wisconsin’s Ace Powersports, referring to the dealership’s Honda and Kawasaki line. “It’s pretty much taken over the snowmobile market.” Ace reportedly sells roughly equal amounts of the two brands and hopes sales to increase another 20 percent in 2008.
Even Florida dealers report success. “We’ve been sold out of watercraft since June,” said Arthur Godoy, owner of Beach Motorsports in North Miami Beach, who sold more than 50 units.
St. Petersburg, Fla. Barney’s Motorcycle and Marine finished as Sea-Doo’s National Watercraft Dealer of the Year and should sell nearly 500 Sea-Doo and Yamaha watercraft.
“The quality of the product has come up substantially in the past several years, since the introduction of the four-stroke product in ’02,” explained Sales Manager J.J. Person. “With the manufacturers continually upgrading the machines, they’re continuing to stay on top of what the watercraft customer demands.”
Individual models that have done particularly well include Kawasaki’s Ultra 250, a boat that numerous dealers admitted sold out very early … and fast.
“We probably could have doubled our sales if we had more of them,” admitted John Heale of Seattle’s Lake City Kawasaki Sea-Doo.

One-Two Punch
Weather was one factor in both strong — and weak — sales.
“We started out fairly strong, and then the weather went kind of south,” explained Lake City’s Heale, who notes the area had an exceptionally rainy summer. “We kept waiting for it to start, and it never did. As far as year’s past, I’d guess we’re down 15-18 percent.”
That same rainy weather, however, helped Max’s Cycle, a Kawasaki and Yamaha dealer in Abilene, Texas. “We’re in west Texas, so water is important,” said co-owner Al Miller. “You don’t have water, you don’t sell watercraft. We had a rainy season this year, all the lakes are full, so we’ll have water for a couple of years. That has a big impact.”
The economy, however, rated top mention, particularly in California and Florida. “There are always numerous factors to why sales are good or bad, but living in Florida I know the real estate boom and the following collapse affected a lot of people and took away a good amount of disposable income,” McKercher said.
“The year wasn’t good at all,” added Ryan Alexy at California’s Santa Clarita Motorsports, who also places the blame on the housing situation. “We were probably about 30 percent down from last year.” As Alexy explains, it’s not just a lack of money; in many cases, it’s bad credit. “The banks haven’t gotten any stricter, basically people’s credit is just getting worse. People do want to buy; they just don’t have the credit to buy. There’s some new models coming out that look pretty sharp, but they’re also more expensive.”
Advice? We’ll let Rick Anderson of Britt Motorsports, a five-location dealership in North Carolina that has more than 30 years of operation under its belt, have the last word. “I’d love to say it’s going to be better, but I think we’re like most places, we’ve got to just weather this storm right now. And I think this storm is going to blow for another 6-8 months.”

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