Feb. 8, 2010: Dealer Q&A: Banking on pent-up demand

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?

Mike McGrath, owner of McGrath Powersports, believes the multiline metric dealership will see improved new unit sales in 2010 over the previous year. However, he’s being conservative fiscally, and has budgeted for 2010 to mimic the previous year in new unit sales. “If I have to bet, I would say no question it will be better,” McGrath said of new unit sales. “I think there is some pent-up demand. We’re already seeing a loosening up in the credit markets, which I think drove a lot of the softness in the business.”

In your opinion, what department in your dealership stands the best chance to make sales gains in 2010 over 2009?

McGrath believes the new unit sales department has the best chance to improve over the previous year. Part of that belief comes from his area’s continued interest in powersports — McGrath’s store saw little decrease in traffic compared to the previous year. As well as additional new unit sales, McGraph sees potential increases in parts and service as well. “I don’t think we’ll have a department that won’t grow,” he said. “New units can’t stay this soft.”

As you enter the spring and summer selling season, what is your plan for staffing levels in comparison to last year?

The dealership will be comparable in terms of staffing compared to the previous year. McGrath said they have made some staffing changes, including in the parts department where they no longer have a full-time apparel person but instead have a parts-to-service staff member. McGrath says the dealership maintained its service department staffing throughout 2009, even as the market slowed.

If the economy picks up, what area are you likely to add staff to first?

McGrath would start by adding to the new unit sales force and then add to the parts and service departments. The company previously has had a full-time apparel person and would look at doing so again if the market picks up. McGrath also would consider adding a service tech if the service department picks up this selling season.

If the economy picks up, what would be the first action you would do outside of adjusting your staffing levels?

“We’ll review our marketing plans,” McGrath said. The dealership already has budgeted for its event planning but better-than-expected sales could entice them to look at spending more on the promotion of those events. McGrath said the other spending area that could be increased is vehicle inventory.

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