We’re less than half way through the year at this point but the powersports waters have been anything but calm. If you like change, you should love the race to the end of the year.
Four new powersports trade shows were announced— three aiming at the ATV and/or off-road market and one at the V-twin segment. You can read the complete story elsewhere in this issue. Seems like a lot of shows.
Cannondale filed a Chapter 11 bankruptcy when it ran out of cash trying to develop a sport ATV and a hot off-road motorcycle. It’s now out of bankruptcy, minus the motorsports operation. That still could be purchased and resurrected by a new owner.
Corbin-Motors, the Hollister, Calif., maker of that cute little electric Sparrow vehicle, was another bankruptcy victim. But that story has yet to play out, and you’ll likely see more news about Sparrow and Tom and Mike before the year is out.
Big changes at Ducati. After moving its North American headquarters from New Jersey to California, switching to a new computer system, and completely overhauling its distribution system for bikes and also for accessories last year, the company fired its North American president and cleaned house on management row at international headquarters in Bologna, Italy, in January. Not surprisingly, sales of new units were off sharply. New North American chief, Michael Lock, seems to be aggressively attacking the problems and working hard to restore dealer confidence.
Polaris Industries continued its impressive series of new product launches by entering the sportboat market. Tom Tiller, president and CEO, continues to set high standards at the Minnesota OEM.
A slump in unit sales in the ATV and snowmobile markets. Snowmobile sales for the 2002-2003 season were off 15% in the U.S., and carryover inventories in North America were up significantly. Another bad year for sled dealers.
Perhaps the biggest news came in April, when officials at Bombardier announced that the company would sell its Recreational Products Division so it could quickly raise cash. Executives said a sale could close as soon as July.
Subsequently, the company announced that it would not sell to a competitor because anti-trust considerations might delay the sale, and that it had received interest from more than two dozen companies.
Interestingly, when a Bombardier spokesman was asked by Powersports Business in January about a possible sale, he said: “We categorically deny that (sales) rumor. There’s no foundation to that rumor whatsoever.”
Here are some other noteworthy events in the first five months of 2003:
On the ATV side, sales were off 1.1% through April compared to the same four months last year. That’s a stunner for an industry that had become accustomed to double digit growth rates. The slide started last year. Meanwhile, motorcycle sales were flat through the first four months, with the important highway segment off about 3%.
More personnel changes. Ed Burke, an industry icon who was a leader in Yamaha’s motorcycle research and development efforts, retired in May, and Bill Rucker, co-founder and chief executive officer of American IronHorse, the Fort Worth, Texas, bike maker, left the company, also in May.
Other Things to watch
- A soft economy/war, fear of deflation (yes deflation) and sagging dollar will continue to put pressure on margins.
- Increased roll-ups of successful dealerships and the possible influx of new money from outside the industry.
- And, of course, the sale of Bombardier and the plan that’s put in place by its new owners.