Issue link: http://read.uberflip.com/i/793848
4 • March 13, 2017 • Powersports Business NEWS www.PowersportsBusiness.com www.powersportsbusiness.com Editorial and Sales: 763.383.4400 Subscriber Service: 847.513.6025 EDITOR IN CHIEF: Dave McMahon 763/383-4411 (dmcmahon@powersportsbusiness.com) SENIOR EDITOR: Liz Keener 763/383-4413 (lkeener@powersportsbusiness.com) ASSISTANT EDITOR: Kate Swanson 763/383-4412 (kswanson@powersportsbusiness.com) MANAGING ART DIRECTOR: Dodi Vessels ASSOCIATE ART DIRECTOR: Nicole Siewert PRODUCTION ARTIST: Kelsey Houle PRODUCTION MANAGER: Angela Schmieg PRODUCTION DIRECTOR: Cherri Perschmann NATIONAL SALES DIRECTOR Allison Gruhn 763/383-4467 (agruhn@powersportsbusiness.com) NATIONAL ACCOUNT MANAGER Mark Rosacker 763/383-4433 (mrosacker@powersportsbusiness.com) NATIONAL SALES REPRESENTATIVE Michael Kula 763/383-4440 (mkula@powersportsbusiness.com) CEO: Marion Minor SR. VICE PRESIDENT/FINANCE & OPERATIONS: Gerald Winkel SR. VICE PRESIDENT/MARKET DEVELOPMENT: Joanne Juda-Prainito GROUP PUBLISHER/MOTORCYCLE, POWERSPORTS: David J. Voll SALES OPERATIONS MANAGER: Bernadette Wohlman CONTRIBUTORS: Billy Bartels, David Wells COLUMNISTS: Sam Dantzler, Mark Mooney DEALER ADVISORY BOARD: Hooksett Kawasaki-Polaris, Jim Whalley; Hacker's Yamaha & Honda, Rick Hacker; Honda/Polaris of Lubbock, Morris Baker; All Action Water Sports, Ray Leps POWERSPORTS BUSINESS (ISSN #1522-7944) is published monthly except twice in May and November plus the Market Data Book in May, 15 times per year by EPG Media/Specialty Information Media, 10405 6th Avenue North, Suite 210, Minneapolis, MN 55441. Periodicals postage paid at St. Paul, MN and additional mailing offices. POSTMASTER: Send address changes to Powersports Business, P.O. Box 2123, Skokie, IL 60076-7823. SUBSCRIPTION INFORMATION: Free to qualified members of the motorcycle, all-terrain vehicle, snowmobile and personal watercraft industries. 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Powersports Business is a registered trademark of EPG Media & Specialty Information. Copyright 2017 by EPG Media & Specialty Information. All rights reserved. Reproduction in whole or part is prohibited unless expressly authorized by publisher. REPRINTS: For more information on e-prints or reprints from Powersports Business, contact Robin Cooper, 763/383-4400 ext. 4491. Printed in U.S.A. CALENDAR OF EVENTS Email dmcmahon@powersportsbusiness.com to get your industry event added to the calendar. Vespa, Victory and Zero. Based on dealership location, the state with the largest number of Q4 survey takers was Pennsylvania with 7.9 percent. Wisconsin and Ontario were next at 5.8 percent, with Minne- sota at 5 percent. "The results of our 4Q survey are encour- aging," Johnson reports in a research note provided exclusively to dealers who completed the survey. "While business conditions are not necessarily robust, 70 percent character- ize them as either average or good. But, more importantly, our survey indicates sequential improvement compared to 3Q. We are getting better feedback from dealers not only on new unit sales, but also inventory, profit margin and outlook." As a reminder, the Q3 survey occurred in early October, a month ahead of the U.S. presidential election and right after the Polaris recalls, and showed disappointing results that weakened from Q2. "But since the election, business has improved for most dealers, as has optimism," Johnson reports. "Dealers in our survey are small business owners, with 86 percent own- ing one location, and 75 percent of them generating less than $10 million in annual revenue. And because of that, it was very hard to find a dealer excited about a potential of Hillary Clinton presidency. At the time, the political environment was the top concern amongst dealers. That concern has dropped since the election of Donald Trump, and busi- ness outlooks have improved. "Side-by-sides saw the most incremental improvement in 4Q, while marine categories continue to show the most consistent growth (PWC, boats). Motorcycle sales continue to be very soft. Though it should be noted that the answers primarily reflect the performance of metric or sport bike dealers, which tend to share space with ORV and snowmobiles, than of Harley-Davidson. "Inventory is still heavier than dealers would like, but showing some improvement over 3Q. Dealers still complain about promo- tions and discounting, but our survey indicates that the promotional landscape is very similar to last year. Meanwhile, dealer profitability is increasing. Many data points are showing improvement on a year-over-year basis, but there are still some that are not. One thing in common is that all of these numbers are better than what dealers were reporting to us in October for 3Q. We are seeing sequential improvement in all of our survey questions. For example, 39 percent of dealers said that overall business conditions were either very strong or good in 4Q, while 26 percent cited business as poor or very weak. While it is good to see more dealers reporting strong feedback than weak, what stands out to us is that this was a sequential improvement from 3Q when 30 percent cited business conditions being either very strong or good and 28 percent either poor or very weak. "And when asked to describe new unit sales, which is what investors are most concerned about, 37 percent of dealers said they were either very strong or good. This was a sequen- tial gain from 3Q when 26 percent responded positively. In 4Q, only 31 percent of dealers surveyed said sales were poor or very weak, much better than the 40 percent in 3Q16." 4Q UNIT SALES INCREASED (YOY) FOR A SLIGHT MAJORITY OF DEALERS "When asked about actual unit sales perfor- mance on a year-over-year basis, 59 percent of dealers said sales grew, with 15 percent citing double-digit growth. This is an improvement from 3Q, when 48 percent of dealers said sales grew, and only 10 percent cited double-digit growth. Still, we see that 41 percent of dealers are saying that sales had declined year over year, and 19 percent saw double-digit declines. So while sentiment has improved, there are still plenty of opportunities for more improvement. "In the quarter, side-by-side was the best- performing category in the powersports indus- try, with 62 percent of respondents claiming their side-by-side business was up, with 24 percent up by double digits. This was a nice increase from our 3Q survey when 55 percent of respondents called their SxS business as up. Increased availability of Polaris RZR 900/1000/ Turbo had played a role, but so did improve- ments in performance from Honda and BRP." There's plenty of more data on the 22-page PDF, available at PowersportsBusiness.com/ digital-downloads. Data presented here is from the first three pages of the report. PSB Q4 SURVEY CONTINUED FROM COVER WINNING DEALERS The following dealerships that completed the Q4 Powersports Business/BMO Capital Markets Dealer Survey each were selected at random to win a $100 AMEX gift card. Cycle North Powersports, Prince George, British Columbia Frontier Powersports, Fergus Falls, MN Show Low Motorsports, Show Low, AZ Tejas Motorsports, Highlands, TX Yamaha of Gary/Cycle Sport Yamaha, Hobart, IN All dealers who complete the survey receive analy- sis of the survey results from BMO analyst Ger- rick Johnson. The Q4 survey analysis is 7 pages. All dealers who complete the survey are eligible to win one of the five $100 gift cards. Want to participate in the next survey? Send an email to dmcmahon@powersportsbusiness.com 4% 4% 5% 4% 13% 7% 35% 33% 29% 36% 40% 26% 35% 32% 44% 34% 36% 46% 21% 25% 17% 23% 9% 19% 5% 6% 5% 3% 2% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall Business Conditions New Unit Sales Used Unit Sales P&A Sales Service Department F&I Very weak Poor Average Good Very strong Source: Powersports Business/BMO Capital Markets PLEASE RATE THE FOLLOWING: MARCH 2017 3-4: Martin Moto Modern Classics Motorcycle Show, Boyertown, PA 3-4: AMSOIL Theisen's Snocross National, Dubuque, IA 3-4: Snowmobile Sneak Peek Tour, SnoDeo, Colebrook, NH 4: Monster Energy Supercross Rogers Centre, Toronto, Ontario 4: Arctic Cat Family Snow Day, ERX Motor Park, Elk River, MN 4-5: U.S. X-Country Snowmobile Racing Naytahwaush 200, MN 6: Ski-Doo Spring Sneak Peek Tour, Radisson Hotel, Nashua, NH 7: Snowmobile Sneak Peek Tour, Augusta Civic Center, Augusta, ME 7: Parts Unlimited Street & Off-Road Product Tour, Anaheim, CA 7: Parts Unlimited Helmet & Apparel Product Tour, Phoenix; Knoxville; St. Louis 9: Parts Unlimited Street & Off-Road Product Tour, Van Nuys, CA 9: Parts Unlimited Helmet & Apparel Product Tour, San Diego; Charlotte, Cincinnati 10-11: Snowmobile Sneak Peek Tour, SnoFest, Old Forge, NY 10-12: 14th Annual Inland Northwest Motorcycle Show and Sale, Spokane County Fair & Expo Center, Spokane, WA 10-12: Snowmobile Sneal Peek Tour, Holiday Inn, West Yellowstone, MT 10-19: Bike Week, Daytona Beach, FL 11: Monster Energy Supercross Daytona International Speedway, Daytona Beach, FL 11-12: AMA ISDE West Qualifier Series Round 2, Boise Ridge Riders, Payette, ID 12: Ski-Doo Spring Sneak Peek Tour, The Oncenter, Syracuse, NY 13: Snowmobile Sneak Peek Tour, Erie County Fairgrounds, Buffalo/Hamburg, NY 13-14: Snowmobile Sneak Peek Tour, Place Forzani, Laval, QC 14: Ski-Doo Spring Sneak Peek Tour, Mirabeau Park Hotel, Spokane, WA 14: Parts Unlimited Street & Off-Road Product Tour, San Jose/Santa Clara, CA 14: Parts Unlimited Helmet & Apparel Product Tour, Anaheim; Washington, DC; Pittsburgh 15: Snowmobile Sneak Peek Tour, Birch Run Expo Center, Birch Run, MI 16: Snowmobile Sneak Peek Tour, Deltaplex Arena, Grand Rapids, MI 16: Ski-Doo Spring Sneak Peek Tour, Holiday Inn Portland Airport, Portland, OR 16: Parts Unlimited Street & Off-Road Product Tour, Vallejo, CA 16: Parts Unlimited Helmet & Apparel Product Tour, Van Nuys, CA; Baltimore; Buffalo 17-18: Snowmobile Sneak Peek Tour, Capital Helicopter Complex, Quebec, QC 17-19: AMSOIL Ram Trucks Snocross Grand Finale, Lake Geneva, WI 17-19: AltRider 2017 Taste of Dakar, Gold Point, NV 17-19: Snowmobile Sneak Peek Tour, Grand Geneva Resort & Spa, Lake Geneva, WI 18: Sons of Speed Race, New Smyrna Speedway, New Smyrna Beach, FL 18: Monster Energy Supercross Lucas Oil Stadium, Indianapolis, IN 18: Ski-Doo Spring Sneak Peek Tour, Boise Centre, Boise, ID 20: Snowmobile Sneak Peek Tour, Wisconsin State Fair Park, West Allis, WI 20-21: Snowmobile Sneak Peek Tour, Bell Sensplex, Kanata, ON