Powersports dealers are anticipating strong sales of new model-year 2012 side-by-sides, according to a third quarter survey by RBC Capital Markets and Powersports Business.
Nearly two out of three side-by-side dealers expect to see the line grow by at least 5 percent for new model-year 2012 side-by-sides. Less than 20 percent of side-by-side dealers foresee negative growth in the 2012 product. Twenty-one percent of dealers expect to see growth of 5 percent-plus; 22 percent of dealers plan on growth of 10 percent-plus; 9 percent foresee growth of 20 percent-plus; and 4 percent plan on 30 percent or better growth.
The fall survey also found that 54 percent of powersports dealers view overall business conditions as either somewhat weak or very weak. The online survey of 129 dealers from 38 states and Canada showed that 21 percent of the respondents described overall business conditions in early October as either somewhat strong or very strong.
The bulk of the survey respondents were single-location owners. In fact, 85 percent of the dealers fit that description. The other 15 percent had at least two locations. About 65 percent of the survey takers described their annual revenue as less than $5 million. About 20 percent of the respondents have revenue of $5-10 million, and the remaining 15 percent of the survey participants have annual revenue of at least $10 million.
About 75 percent of the survey respondents sell motorcycles at their dealership. Traditional ATVs (81 percent), side-by-sides (72 percent), PWC (36 percent) and snowmobiles (35 percent) rounded out the powersports makeup of the dealers who took the survey.
About 55 percent of respondents called new unit sales either somewhat weak or weak. About 25 percent said new unit sales were average, and 21 percent said new unit sales were either somewhat strong or very strong.
Pre-owned sales were rated as average by 35 percent of respondents, with 35 percent calling pre-owned sales either somewhat strong or very strong. The other 30 percent reported pre-owned unit sales were either somewhat weak or very weak.
More than 40 percent of participating dealers said P&A sales were average, with about 1 in 4 dealers calling P&A sales somewhat strong or very strong.
Three out of four dealers ranked their service department sales as either average, somewhat strong or very strong. About 1 in 4 called service either somewhat weak or very weak.
Conversely, fewer than 1 in 4 dealers said called their F&I department either somewhat strong or very strong. About 35 percent said F&I was average, with 45 percent deeming F&I either somewhat weak or very weak.
Customer traffic in the third quarter compared to the year-ago quarter was viewed as split among the respondents. About 30 percent each described traffic as somewhat better, about the same or somewhat worse than it was a year ago.
About 35 percent of dealers said customer buying interest was somewhat better than in the year-ago quarter, with 30 percent calling it somewhat worse. About 20 percent said customer traffic was average compared to the same time in 2010.
Retail financing was rated as either about the same (40 percent) or somewhat better (34 percent) by nearly 3 out of 4 dealers for the third quarter, compared to a year ago. Twenty percent said retail financing was either somewhat worse or significantly worse than it was in the fall of 2010.
Dealership profit margins compared to the year-ago quarter were rated as about the same by 1 out of 3 dealers. About 35 percent of dealers said that profit margins were somewhat better or significantly better compared to the year-ago quarter.
When answering the question “In general, to what extent has your business outlook changed compared to six months ago?” 36 percent of dealers responded “about the same.” About 35 percent said somewhat better or significantly better, and 1 in 3 responded somewhat worse or significantly worse.
2012 model forecast
Dealers have high hopes for moving new model-year 2012 side-by-side units. Less than 20 percent of respondents think they will see negative growth in the segment. About 26 percent view growth as flat; 21 percent forecast a 5 percent increase in growth; 22 percent see a 10 percent increase; and 13 percent see growth of at least 20 percent.
About 35 percent of PWC dealers expect flat sales of new 2012 models, with more than
40 percent anticipating growth.
On a strong note, 57 percent of snowmobile dealers expect growth with new 2012 models, and 20 percent anticipate flat sales.
ATVs are viewed as prospects for flat growth by 34 percent of dealers. About 35 percent of ATV dealers are anticipating negative ATV growth, with about 1 in 3 dealers forecasting positive growth with 2012 new models.
Heavyweight motorcycle growth is viewed as either flat (28 percent) or growing (39 percent) by more than half of the respondents. About 1 in 3 dealers anticipate negative growth with 2012 new models.
Sport bike growth is expected to be flat by 1 in 4 dealers. About 1 in 3 dealers expect to see negative growth in the sport bike segment for 2012 new models, and another 1 in 3 dealers expect to see positive growth. About 20 percent of respondents expected to see growth of 5-10 percent, and an equal percentage foresee negative growth of 5-10 percent.