Weather aside, outlook strong

Cold and snow yield different results for different dealers

For most of North America, a cold first quarter had a big impact on unit sales, but the effects ranged from awful to fantastic, depending on where dealerships are located and what they sell.

Mark Holmes, owner and sales manager of FDR Honda Kawasaki in Paducah, Ky., wasn’t happy with the seven inches of snow that fell in the first two weeks of March.

“We had such bad weather; it was really slow. Winter just didn’t seem to want to go away. We had fair January and February, but March was really poor,” he told Powersports Business.

Bill Hollink of Hollink Motorsports in Spencerport, N.Y., described his Q1 as bad to very bad due to “mostly weather here in the north, and I’m not really impressed with the economy in New York State,” he said.

And they weren’t alone. Forty-three percent of dealers reported business was below plan in the Powersports Business and RBC Capital Markets first-quarter survey of 197 dealers from 44 states and Canada. Only 17 percent reported performance that was above plan.

Most motorcycle dealers reported being on-par or below last year’s first quarter in unit sales, with only 30 percent of heavyweight motorcycle dealers and 25 percent of sport bike dealers reporting sales increases of 5 percent or more. Only 20 percent of scooter dealers reported the same.

However, the weather wasn’t bad for all stores. BRP-only dealer Dave Vincent, owner of Team Vincent Motorsports in Ayr, Ont., reported that still-falling snow led to a surge in his Ski-Doo sales in Q1.

“Q1 sales are up; profit is up, net margin is up. Everyone was happy; people were filling the store,” Vincent said. “We had snow — that was the difference.”

Good for sleds

While many motorcycle-focused dealers had a difficult first quarter, snowmobile dealers overall saw positive results for the first three months of the year, with 58 percent reporting sales increases of 5 percent or more.

However, like many dealers, Vincent is ready for warmer weather, so he can start moving Spyders and Sea-Doos.

“We had a great Toronto Boat Show. The Sparks are sold out. I wish I had another 20 of them. ATVs are soft, so I’m a little worried about that. And Spyders are just kicking off,” he said.

Though dealers are hopeful sales will pick up over the rest of 2014, they’re being cautious with their outlooks.

“I expect us to probably be probably near equal with last year or maybe a 5 percent increase,” Holmes said, adding that he expects ATVs and side-by-sides will carry the load for his dealership in 2014.

Hollink is also being conservative, with concerns looming about how the economy is affecting his area’s blue-collar workers.

“I think it will be about the same as last year, maybe slightly up,” he said. “In a normal economy usually with a cold winter like this, when the weather breaks, it gets crazy, but we haven’t seen that yet.”

Dealership survey-takers also were careful with their predictions for the year, as 39 percent rated overall business conditions as average, and 41 percent said their business outlook remains unchanged compared to six months ago. But there’s always hope for a good season, as 39 percent of respondents reported buying interest in Q1 was somewhat or significantly better than the first quarter of 2013.

As for Vincent, his positive first quarter leaves him excited for what’s to come in the remainder of the year.

“I’m looking forward to a really good ’14,” he said.

Dealer reflections

The following are comments dealers left on our Q1 survey. All comments are shared anonymously.

“Weather was a challenge in Q1 for us in Indiana. However, ATV & SXS was increased quite a bit. As soon as the weather breaks, we predict 2014 will be significantly higher than 2013 due to pent-up demand.”
— Multi-line Midwest dealer

“The metric OEMs could phase out cruiser production as the new 500 and 750 HD will be the nail in the coffin. In oil field country, riding a metric cruiser is akin to showing up at a Ferrari meet with a Kia, it just isn’t cool. Riding a [metric cruiser] to the local Buffalo Wild Wings here and parking it in the bike section next to all the real cruisers will probably end bad for you.”
— Multi-line South dealer

“Average people are being priced out of industry. Machines are getting too expensive.”
— Single-line West dealer

“New units sales are down from prior YTD due to lack of current model allocations (we have multiple sold incoming units with deposits and simply can not get enough of the new product for stock), which is driving up our pre-owned sales.”
— Single-line Northwest dealer

“Seems like there are less tire kickers and lower overall traffic this quarter, but those who come in are buyers. Sales staff are generally closing on 80 percent of customers.”
— Multi-line Canada dealer

“Sales & prospects are looking good for 2014.”
— Multi-line Northeast dealer