Powersports Business: What are you budgeting for in terms of new unit sales for 2010? Do you believe it will increase or decrease in comparison to 2009?
Irv Fosaaen, owner of Waukon Harley-Davidson, says the dealership is looking for either flat sales to a 5 percent increase. “We didn’t have a bad year last year,”?he said. “We ended down slightly in new unit sales but not markedly. We haven’t seen any decrease in interest in Harley-Davidsons.
“The thing that hurt us is the decrease in the availability in financing. Everybody was much more cautious about who they bought this year. Down payment requirements were much higher. It took awhile for consumers to get their minds around that, and we had some instances of people being upside down in their trade. In the past it hasn’t been an issue, and it was a major issue this year. Our feeling is now a lot of those people have been paying on them for another year so they’ve built some more equity into them.”
In your opinion, what department in your dealership stands the best chance to make sales gains in 2010 over 2009?
Fosaaen believes used vehicle sales will be up substantially because of the availability of product and financing. “A lot of the product has got lower priced,”?he said of used bikes. “It’s easier to trade with people now so we’re not having to put quite so much money into the trades. There is a better value proposition, and we have a lot more people coming in and looking at used bikes because when times are a little tough I think they feel like, ‘Well, I can’t justify a new bike, but I think I can justify a used bike.’ So we’re seeing a lot of that. So we are expecting a fairly substantial — 10 to 15 percent — increase in used bike sales this year.”
As you enter the spring and summer selling season, what is your plan for staffing levels in comparison to last year?
“We added more salespeople last year than we’ve had previously,”?Fosaaen said. “We’ll be at least at that level and if we’re going to add people, it will be (major unit) salespeople that we’ll be adding. We didn’t really cut back in anything last year (in terms of personnel). We changed hours a little bit, especially this winter, but we haven’t had any big reductions in staff.
Fosaaen increased his sales staff because new unit sales are “harder to come by, so it takes a lot longer to make a single sale than it did in the past. So if you’re going to do that, you’re going to have to do a lot more prospecting and it’s going to take more salespeople to do that. We’ve come to grips that it’s going to cost us a greater percentage of revenue to sell something than it did in the past so we have salespeople on the phones a lot more. If you don’t increase your staff, I think you limit yourself to what you can sell.”
If the economy picks up, what area are you likely to add to first?
Fosaaen said the store is currently in a good place in terms of new and used bike inventory. “We would add it as we saw fit, but the next step would probably be to add more parts and accessories salespeople, what Harley likes to call ‘chrome consultants,’” he said. “If we’re doing a poor job of anything in the industry right now, we follow up with people from a sales standpoint, like ‘how do you like your new bike or used bike?’ But we don’t follow up from a parts and accessory standpoint. Harley has given us some statistics that the majority of money people spend on their bike, whether it’s new or used, they are going to spend within the first 90-120 days of ownership, and we need to have more parts and accessory people following up with them, inviting them back in and showing them all the options. Right now, staffing levels being what they are and our system being what it is, we’re mostly clerks and we need more parts and accessory salespeople.”