May retail demand update provided by analyst
Not surprisingly, powersports vehicle manufacturer promotions during May have been minimal, “as retail demand has remained strong and channel inventory is scarce. Our channel checks have indicated that May retail demand is stronger than April retail demand and that buyer credit quality remains very strong,” according to a research note provided to Powersports Business from BMO Capital Markets analyst Gerrick Johnson.
Johnson also reports that overall “May promotions are lower y/y (vs. May 2020) and also slightly lower sequentially (vs. April 2021). Continued strong retail demand and low inventory levels have once again led to less promotional activity y/y from both OEMs and dealers. When there are offers, OEMs are still significantly favoring financing offers rather than rebates.
“PII was less aggressive on a y/y and m/m basis in May. PII’s Spring Sales Event continued into May, but offers were minimal, particularly across its ORV lineup, which only had financing offers. Motorcycles still have an owner loyalty credit offer, with some additional incentives on prior-year Heavyweight bikes.
“DOO continued to rely on financing offers across most of its line-up in May, with lower offers year over year across the board. The primary offers across most of DOO’s ORV line-up were either 3.99% financing for 36 months or 6.99% financing for 60 months. Agricultural and commercial businesses can still potentially save up to $1,750 per unit when purchasing multiple Defenders but DOO dropped the $3,000 rebate on select prior-year Defenders offered last month. Prior year Spyder three-wheel vehicles had rebates up to $2,000 — but down significantly compared to $5,000 last May.
“Textron/Arctic Cat had no offers in May as the company’s Snowmageddon Pre-Order Sales Event ended April 30. Arctic Cat is still offering its ‘Dealer to Driveway’ program, which allows consumers to complete all aspects of the buying experience from the comfort of their own home.
“Honda, Suzuki, and Kawasaki were all less promotional than last May while Yamaha was only more aggressive promoting its motorcycles. Offers were almost exclusively financing-focused, but we saw a few rebates on prior-year Suzuki ATVs, prior-year Yamaha snowmobiles, as well as prior-year Honda, Suzuki, and Kawasaki motorcycles.
“HOG offers continued to be minimal in May. Dealers are continuing to concentrate on advertising the arrival of the new MY2021 motorcycles, particularly the Pan America, as well as relentlessly trying to get customers to trade in their current motorcycles; a by-product of depleted inventory levels. Offers on P&A were minimal as well this month. Our most recent spot check of 30 geographically diverse dealers indicates overall inventory is down -30% y/y (-45% new, -16% preowned).”
— Dave McMahon, editor, dmcmahon at powersportsbusiness.com
