May 23, 2011 – First quarter sales bring optimism

Dealers throughout the country expressed a range of results in the first quarter. Here’s a look at what a few dealerships experienced from January through March.

37 PERCENT INCREASE

PJ’s Triumph Ducati Husqvarna in Albuquerque, N.M., saw a total gross increase of 37 percent during the first quarter as compared to the first quarter of 2010.

Dealership owner PJ LaMariana attributed the rise in sales to a strong December that never let off the gas pedal.

“We do have a good amount of new product coming from the manufacturer, but we also got a nice early spring. Pretty much from March 1, things started to roll. January and February weren’t good, and they’re typically soft. This year was no exception.”

The sunshine had a way of warming things up in the southwest.

“It was a nice, strong March weather-wise,” he said. “We’re rolling still. It’s the best April we’ve seen through the last three years. The interest in buying seems to be back, for sure. A lot of new product is certainly driving that interest.

“It seems like traffic is high. I couldn’t necessarily say that [consumer] confidence is back; buyers are back. We saw that to some degree with all the pent up energy from the third and fourth quarter. We had a very solid third quarter and a quite good fourth quarter. People are getting used to what they’re seeing and saying ‘I’m not going to deny myself something I want. They’re getting comfortable with where we are with the economy.”

“Stunning,” is how LaMariana described his dealership’s sales as a percentage of margin. “Our margin increase was up 6 percent in the first quarter — really positive stuff. And April was ridiculously trending in the right direction.”

LaMariana noted that the dealership was still in its peak decline in sales for the first half of 2010. “We started to climb in the second half of the year, and we’re still climbing,” he said. “We haven’t seen an increase like this in a long time. We don’t know when it’s going to hit a ceiling.”

While the first quarter was strong for LaMariana, the second quarter is off to a strong start.

“Unit sales were up 100 percent from last April to this April,” he said. “We’re not seeing the same growth in P&A and service, but it’s alarming what we’re seeing in units. Inventory is an issue. Demand is so high for the product that we sell. We have to create a sense of urgency with the customer.”

LaMariana has weathered the storm that began in 2008, but he’s not willing to look too far ahead.

“I don’t want to get too excited, but indications are very strong that we can maintain,” he said.

LaMariana also saw triple-digit percentage increases from November and December of 2009 to the same time frame in 2010.

“The economic adversity led us to being a lot more savvy,” he said. “It was like ‘Why are we sitting back near death?’ We did Black Friday, pre-Black Friday sales. It allowed us to further expand on purging inventory and head into the new year with low inventory so that we could buy current inventory.”

LaMariana reached his customers during this surge via Facebook and email for the successful holiday sales campaigns.

“We don’t even do traditional marketing anymore. We only do what we can control,” he said. “On Black Friday weekend, by noon on Friday we had made our sales from the previous weekend. And we opened at 10. We’re a retailer, and we had gotten the crap kicked out of us for so long, we had to get aggressive.”

NEW UNIT SALES UP 22 PERCENT

New unit sales were up 22 percent in the first quarter compared to a year ago at RPM Cycle in the Dallas suburb of Farmers Branch, Texas. The dealership lines include Triumph, Aprilia, Moto Guzzi and KTM.

“We’re not having a whole lot of problems moving, but my clientele is a little different, with the average median age about 37 years old and looking to buy their second and third bikes,” said Cliff Couch, RPM sales and finance coordinator. “It’s not the 16- to 21-year-old looking to buy their first sport bike.

“Triumph and the other guys have really helped us with the motorcycles they’re coming out with. They’re making bikes that customers are willing to wait for to get. Then they know what they want and come in and buy it.”

Couch says the dealership’s track days help to generate traffic. A Triumph open house event in April figured to give sales another boost in the second quarter.

SLOW ON THE ATV FRONT

John Jenkins, who owns Moto City in Avondale, Ariz., with his father, Wade, did not experience a retail sales increase in the first quarter.

“Four-wheel units continue to suffer,” Jenkins said. “Dirt bike sales are steady and scooters are obviously going up, and that might offset some of the four-wheel stuff in the second quarter. Service seems to be pretty steady, and parts are decent.”

Lines at Moto City include Arctic Cat, KTM, KYMCO and Genuine. Jenkins added the Husqvarna line this year. “The main deciding factor to add them was the financing package that BMW provides,” Jenkins said.

BMW Financial Services is offering 2.99 percent APR financing for 60 months on new 2011 Husqvarna models and 0.99 percent APR on 2010 and prior models. The deals are through May 31.

WEATHER SLOWS OHIO SALES

New unit sales at Apex Powersports in New Philadelphia, Ohio, are down about 12 percent compared to the same quarter of 2010, dealership general manager Matt Russell said. The dealership lines include Honda, Yamaha, Kawasaki, KTM and Tomos.

“The street bike sales never took off because we’ve never had more than two days of sunshine in a row,” Russell said. “The weather killed our floor traffic. We’re competing for people’s dollars at tax season, too, not just with other dealerships. People went out and bought the new flat-screen TV or something like that instead. Last year it got nice on March 1 and stayed nice the rest of the spring and summer.”

A few weeks of sunshine could be the missing sales ingredient.

“Spring-wise, I’m looking for what I hope to be a lot of pent-up buyers who are looking to buy as soon as the weather breaks,” he said. “I’m looking for it to take off here in the middle of [May].”

Russell has seen moped sales rise, thanks in part to some word-of-mouth advertising.

“One thing that’s helping us out is my son just turned 14 and he has one. Now his friends are bringing their dads in to get one. Our geographic location is helpful for moped sales because we’re somewhat rural. Most kids can’t just hop on a bike to get where they want to go.”

TRAFFIC BACK TO PRE-2008 LEVELS

Tousley Motorsports in White Bear Lake, Minn., is seeing traffic into its dealership increase at an impressive rate.

“Our traffic is way up,” Tousley president Dave Glassman said. “We’ve had 5,116 people through the door in 2011 [through April].”

The same traffic patterns for April in recent years pale in comparison. In April 2010, 2,710 customers came through the doors. In April 2009, there were 3,450, and in April 2008, there were 4,988.

“We’re back to ’08 pre-recession traffic,” Glassman said.

In major unit sales, an average April at Tousley includes 146 motorcycles sold. Here’s how recent motorcycle sales in the month of April have fared at Tousley:

2008: 112; 2009: 63; 2010: 82; and 2011: 131.

The ATV business has been “a hair soft,” he said. Here’s a look at Tousley’s recent April ATV unit sales numbers:

2008: 46; 2009: 41; 2010: 25; and 2011: 34.

Going back a few more years, Tousley sold 147 ATVs in April 2003 and 114 in April 2004.

“The ATV business has been getting softer for us since 2003,” he said. “That year we sold 1,221 units for the year.”

Here’s Tousley’s ATV volume since then:

2004: 990; 2005: 914; 2006: 833; 2007: 699; 2008: 459; 2009: 350; and 2010: 261. psb