Throughout the onset of the COVID-19 pandemic, beginning in mid-March and carrying through May, powersports dealerships across the nation have almost unanimously felt the economic impact in their bottom line. For instance, Same Store Sales revenue at 1,711 dealerships in the U.S. that use the CDK Lightspeed DMS decreased 15.1 percent overall on average in March 2020 compared to March 2019, following an 18 percent year-over-year increase in February.
But throughout April and into May as social distancing mandates have begun to ease, sales have begun to increase again at some locations — leaving dealerships with signs of optimism. Powersports Business staff reporter Nick Longworth continues to contact dealerships across the country to learn about the impact of the coronavirus.
“We’ve probably tripled our sales through April — and that might be a little watered-down,” said Tom Lovern, general manager Kentucky Powersports, a full-line Honda dealership in Bardstown, Kentucky. The shop also offers a wide range of trailers, mowers and other landscaping equipment.
“We had 1,400 parts and service transactions that happened last month, and I’ve only seen 1,000 one time before in the last 18 years I’ve been here; the number of transactions was up incredibly — 35 to 40 percent. Major unit sales were 112 units in April this year, versus 78 last year. Apparel is up in the 25 percent-plus range,” said John Marshall, general sales manager of Powersports of Montgomery, a Yamaha, Honda and Can-Am dealership located in Alabama.
According to Lovern, while total sales have increased by 30-40 percent across the dealership throughout the onset of COVID-19, it’s the dirt bike category that has been especially popular, with all models indiscriminately selling.
“We’ve sold a whole bunch of 50 [cc models], we’ve sold a whole bunch of 110s, 125s, 150s — all the way up. We’ve seen bikes that haven’t moved in years — the CRF 150R — that all of a sudden have to be replaced. To be quite honest it’s been hard to keep enough bikes in with Honda having their plant shutdown,” said Lovern. “People are coming into the dealership and if it’s there in front of them, and it’s what they want, they’re just buying it. They know they’re going to have a hard time finding it somewhere else. It’s not as hard to negotiate right now, because people are wanting these machines and they understand there’s a little bit of a supply and demand issue going on.”
“We’ve had a huge spike in everything off-road,” said Marshall. “ATVs have had a huge run comparing year over year.”
Side-by-side sales have also remained popular throughout the month of April for both shops.
Although a shock to many in the beginning, the combination of layoffs and stimulus checks arriving in bank accounts have provided some consumers with time to kill and money to burn.
“April is normally the busiest month of the year for us, but to be honest there are a lot of parents working at home, kids are out of school and they’re looking for stuff to do — they’re turning to dirt bikes and ATVs. I think kids are out there trying new things,” said Lovern. “Between people being off work, maybe stimulus money coming in —although no one has ever explicitly said that and we don’t ask that question — kids being off school and looking for something to do, and the fact that it’s April anyways, all those things have made it into a big month. Hopefully every powersports dealer in the country is feeling the same.”
“We were actually trending somewhat downward about 10 percent until we got to March, and the second half picked up to break even,” said Marshall. “I contribute the turnaround to the pandemic and quarantines. I think there are a lot of people that have a desire to ride the stuff we sell, but their schedules are so hectic that actually doing it was a problem, but now a lot of people are sent home from work. Secondly, everybody that’s still going to work gets looked at crazy if you’re still going out with your friends. But you can get on a motorcycle and you’re socially distancing while having fun at the same time, versus sitting in your house on the verge of going crazy… I think you would be foolish not to account for the stimulus check as well, which had a major role in the simple fact that everybody who in the last five years said they needed that extra $1,500 down to finish the deal have all showed back up. The driving factors have been time off and stimulus money.”
Spring is often the beginning of the busy season for many powersports dealerships, and good weather helps propel demand. According to all Centers for Disease Control and Prevention social distancing guidelines, most powersports activities can be accomplished safely both independently or with someone you live with.
For some dealerships, the social distancing requirements themselves have been the biggest hindrance to impending sales.
“We’ve adjusted operations,” Marshall continued. “There’s been a line at the front door [due to capacity limits] and we’ve handed out masks and hand sanitizer. We actually ran out and have more on order. People don’t seem to mind and we’re doing our best to handle the amount of people. Everybody has a two-way radio, and we have a guy working at the door like he’s checking ID at a club; we’re controlling the flow of people, but it hasn’t seemed to stop people from coming… For service we’re taking appointments all the way out into June right now.
“We’ve got a lot of people that want to load up the family, get a couple buggies and go find the deepest, nastiest mud hole they can find, break what they just spent all their discretionary money on and then brag about how much they just spent fixing it,” said Marshall with a laugh. “Everyone who had a toy broke that needed $1,000 to fix it, well guess what’s now fixed?”
Meanwhile, an uptick in online traffic has been reported almost unanimously by dealerships across the nation.
“We don’t know what next month is going to bring, but the phones and online leads are still hopping,” said Lovern.
“We’ve never tracked it before because it’s never been so important, but for April we had more than double the volume of online credit applications than any month since the internet was created,” said Marshall.
Although the onset and aftermath of COVID-19 will undoubtedly have a negative overall effect for many, dealerships are increasingly seeing that there’s a light at the end of the tunnel, and the potential that a possible recession might be avoided after all is showing — at least for now.
Let Powersports Business help tell your dealership’s story during the coronavirus by contacting Nick at email@example.com.