With numerous states facing stay-at-home orders, business shutdowns and quarantines, parents have been left scrambling to find ways to keep children and young adults from spending full days staring at electronic screens. As a result, some dealerships are seeing an increase in youth product sales throughout the powersports industry, as Powersports Business staff reporter Nick Longworth uncovered in recent weeks.
A mixture of work-from-home suggestions from state officials, school closings and stimulus checks have converged to create a demand for youth powersports offerings specifically in the months since the COVID-19 onset.
“It started off rocky at first but then business took off. I’ve never sold as many machines before in a month as we did in April,” said Mac Johnston, owner of East Central Sports, which has locations in North Branch, Burnsville and Rush City, Minnesota, offering a wide range of powersports vehicles and service. Its Burnsville Mall location is currently appointment-only. “We’re over double from what we’ve sold during a normal month last year; May is looking pretty good too.”
In addition to its adult fleet of motorcycles and ATVs, East Central also offers a youth fleet of dirt bikes and ATVs from SSR, YCF, Coolster and more.
“The kids are at home, and everybody is trying to get out of the house. Usually this is a busy time anyways, but this year it’s really, really busy,” said Johnston, whose shop is known locally for its vehicle giveaways during the holiday season for those in need of a powersports pick-me-up. “All the youth stuff has really been selling well.”
Parents who have maintained employment also help with dealership door swings.
“Most of our customers are still at work,” said John Churchman, owner of Shore Cycles in Salisbury, Maryland, offering pre-owned ATVs and motorcycles as well as youth bikes and ATVs. “We are in a rural area relatively speaking and most people still have jobs, which is a big piece of the puzzle; they’re working hard and buying what they’ve earned — giving their kids or themselves something to do while they have any downtime, and the kids are at home. School has been out since mid-March, generally speaking, and they’re home the rest of the school year. They have the opportunity to give their kid a gift that lasts many years, and gets them out of the house.”
Both dealerships have seen an increase in youth ATV and dirt bike sales this spring during a period in which the segment typically remains mostly dormant until fall.
“We don’t sell many youth products after Christmas until the next fall; there are a few here and there, but that’s not what the focus is. This year it has been a complete 180, and they have been the primary volume of our new vehicle sales,” said Churchman. “People are at home and they’re shifting their focus on what they’re spending money on. A lot of customers who have bought stuff have bought it because they’re not taking a summer vacation this year — their spending has shifted into a different product. People are looking for alternative ways to entertain their families.”
Churchman said diversification of his product lineups has created an opportunity to increase the breadth of customers coming through shop doors; rather than relying on solo enthusiasts, they’re creating full families of customers.
“I can’t suggest diversification enough, and stocking what your customers are demanding. In order for dealers to capture another market in their area they need to get rid of the term ‘off-brand’ and open up to the opportunities that some products and brands give them,” he said. “It comes down to the price point, the quality of the product and what you’re doing to back it up… With the ‘lesser-known’ brands there might be more to do with PDI and investment, but if you do that there’s value and a margin to be happy.
“Most people don’t care about powersports anymore — half of them are not enthusiasts. We have to remember customers are not always the same as us, and these products give you a customer that walks through the door who would have never thought about going to a powersports shop before. It’s a new opportunity that’s really important right now. Customer number one is the enthusiast nut, but customer number two is the kid who’s now been hooked. The impact of having your first vehicle can lead to a lifetime of enjoyment with powersports.”
Following an increase in consumer demand, several manufacturers are poised to potentially capture a larger market share — offering dealerships the ability to diversify their product lines and profit margins, while also growing themselves within the industry.
Gabriel Cruz, marketing manager with HISUN USA, has seen a similar positive sales trend among its dealership network.
“Sales have been strong. We have a lot of dealers in rural areas, and it didn’t seem like sales slowed at all,” Cruz told Powersports Business. “Ballard Golf and Power in Hayden, Idaho, told us that their sales have been incredible. We also spoke to another dealer in Missouri that said sales have been triple what they’ve expected.”
“Last year April was our biggest invoicing month, and this year our sales were double what they were in April of last year,” said Mel Harris, vice president of operations with SSR, which produces motorcycles, pit bikes, dirt bikes, scooters, side-by-sides, ATVs, mopeds and more. “And that’s with less than 50 percent of our dealers operating.”
With Kayo products only officially becoming available two years ago, parts and service director Anthony Fay said the company has roughly tripled its sales in 2019, while also more than doubling its dealer footprint since the last AIMExpo.
“This year we’re already ahead of the last full calendar year, and it’s only April,” Fay said. “Sales have been doubling, if not tripling month-to-month. People are trying to get the kids out of the house because they’re glued to their screens. As soon as those [stimulus] checks went out, sales spiked like crazy.”
For Kayo, its Fox 70 — a 70cc, four-stroke, electric-start sport ATV — has been a popular seller. With less than a 24-inch seat height, the ATV easily fits rider ages 6 and up. Fay says its offers a 35-40 percent profit margin for dealers.
“It retails at $1,000, which is comparable to any ‘name brand’ offering out there — it’s been selling like crazy. Right now parents are trying to get kids out of the house and they’re picking them up like it’s Christmas,” said Fay. “Our biggest season is usually between the end of October and Christmas, and the Fox 70 accounts for 65 to 70 percent of all sales.”
HISUN USA offers lightweight and youth-friendly utility and sport ATVs and side-by-sides, allowing dealers to capitalize on the youth market also.
“People want to get out and do something,” said Cruz. “A lot of people are purchasing units as a way to get out and do something fun throughout social distancing and not being around a lot of people — go for a ride on the trails to help pass the time. Parents are looking for a way to get kids outdoors, but still follow the guidelines to social distance.”
“We’re getting to the old cabin fever — people want to get outside,” said Harris.
Both online sales and inquiries for dealers and manufacturers have increased throughout the onset of COVID-19 as people increasingly practice social distancing, often relying on shopping online or by appointment only.
“We’re getting 30-40 email inquiries a day from the website. It’s more than double last year,” said Johnston of East Central Sports. “The demand is so high across the board now that it’s going to be harder to get machines if manufacturers start to run out.”
Manufacturers have also noticed a spike in website traffic, as well as dealer interest in partnering.
“For the months of March and April we’ve had a significant increase in dealership inquiries looking to come on board,” said Cruz.
According to Cruz, HISUN’s overall website traffic has increased 27 percent, youth sales have seen an increase of 27 percent and “build your own” website inquiries have increased 29 percent for the months of March and April in 2020 vs. 2019.
Surprisingly, weather is one of the few detractors when it comes to youth dirt bike sales.
“The only slowdown we’re seeing is regional,” said Harris. “In places it gets too hot, people will head out on the water instead of in the dirt. But we don’t expect to see a drop-off in the fall. In fact, we’ll have new product coming out.”
Unprecedented as anything seen in the industry, limited capacity manufacturers have been dealing with production and financing challenges due to the increased demand and additional restrictions in the wake of COVID-19.
“We’re pretty much bringing everybody back full-time now to fulfill as many orders as possible,” said Fay. “We’re starting to run low on inventory, so we’ve bulked up our orders to get product shipped as quick as possible. We have more on the way and plan to fulfill everything that comes our way. Our production times haven’t been affected too much, maybe a couple weeks. It used to be about 30 days, and now it’s about 45 days.”
“[Demand] has put us into a little bit of a difficult position — we always stock inventory. One of our claims to fame is dealers don’t need to stock inventory, they can order weekly. But because of a supply crunch and doubling sales, we’re putting them out as fast as they can arrive,” said Harris.
Whether or not the youth bubble pops is anyone’s guess in a volatile economy heavily influenced by an unprecedented pandemic, but an old business adage says it’s always best to strike while the iron is hot.
Got a story to tell about your dealership during COVID-19? Send an email to Nick at nlongworth at epgmediallc.com.