Dealer survey finds 2 of 3 dealers saw new sled sales decline in quarter
The Q4 2017 Powersports Business/BMO Capital Markets Dealer Survey found that snowmobile dealers had a decidedly tough time matching their year-ago quarter sales of new snowmobiles.
When asked to characterize the Q4 year-over-year sales performance of snowmobiles (new products only, measure in units), 23 percent of the respondents said their snowmobile sales were down 10-19 percent compared to Q4 2016, and another 30 percent said their snowmobiles sales were down 20 percent or more. A total of 13 percent of dealers said they had a flat to minus-9 percent decrease in sales of new snowmobiles. A total of 15 percent had flat to 9 percent growth, and 18 percent had 10-19 percent growth. One dealer replied that the store had seen 20 percent growth or greater of new snowmobiles.
“It’s going to be a very interesting Q1 in most of the west with winter conditions and snowmobile inventory,” one dealer wrote.
Another said: “Outlook isn’t optimistic. Coming off the slowest December we have seen in 15 years and can’t pinpoint the exact reason why. Economy, lack of snow, rising interest rates, political situation, online Christmas shopping, OEM programs, or a combination of all them?”
Finally: “First off sled-related, no snow and [rear end] cold weather means no service work. Service side has been the quietest I’ve seen in years. As you well know, that’s our meat, potatoes & gravy side of the business. Sales add very little to the big picture, other than F&I….”
Dealers from 15 states and five Canadian provinces completed the survey. Minnesota, New York, Wisconsin and Ontario were the most represented states and provinces from snowmobile dealers who took the survey. All but one of the dealerships (98 percent) are single-store operations. One in three generates more than $10 million annually in revenue. Another 22 percent generates $1-3 million in revenue annually. All of the snowmobile dealers who took the survey also carry ATVs, and all but one dealership carries side-by-sides. A total of 71 percent of the dealers also carry off-road bikes.
Broken down by brand, half of all dealers reported that their Arctic Cat sales were either flat to up 20 percent or greater, and the other half reported Cat sales as flat to down 20 percent or greater.
Three out of four dealers who sell Polaris snowmobiles reported that their sales were flat to down 20 percent or greater. A total of 41 percent said their Polaris snowmobile sales were down 20 percent or greater. A total of 28 percent said their Polaris snowmobile sales were flat to up 19 percent for Q4, compared to the year-ago quarter.
Two out of three dealers said their Ski-Doo sales were flat to up 20 percent or greater. Another 46 percent called their Ski-Doo sales as flat to minus 19 percent compared to the year-ago quarter.
Yamaha dealers at the rate of 62 percent said their snowmobile sales were flat to down 20 percent or greater. Another 38 percent said they were flat to up 19 percent.
The outlook for the next 12 months is somewhat mixed, with pockets of expected growth. When asked what type of growth they are expecting in their snowmobile new unit business in the coming year, one in three expects to see new unit sales drop 10-20 percent or greater. Another 29 percent expects flat to minus-9 percent sales, and 18 percent are looking at new snowmobile sales of flat to plus-9 percent. A total of 19 percent foresee sales from 10-20 percent or greater.
Three out of four dealers described their Q4 2017 inventory as too high.
A total of 54 percent of the snowmobile dealers who took the survey reported their Q4 2017 business performance relative to plan as below plan. About 37 percent were on plan and 10 percent were above plan.
When asked to rate business conditions, sales of new snowmobiles were rated as good or very good by 36 percent of the dealers, while 25 percent said new sled sales were average. New snowmobiles sales were rated as poor or very weak by 39 percent of dealers.
Sales of pre-owned snowmobiles were reported as very strong or good by 35 percent of dealers.