Glenice Wilder on Powersports Growth Challenges
Q. Do you foresee any growth in the powersports market?
A. We expect 2018 to look much the same as 2017, with one caveat. Pre-owned unit sales will outpace new unit sales. The reason for this is simply consumer demand. New bikes are priced outside of what consumers today are willing to spend, and those consumers who held off on purchasing a bike in 2017 will look to get more for their money on gently used bikes in 2018. In addition, price-sensitive Millennials consider pre-owned as a more appealing option for their already strained budgets. Because of this, powersports dealers will look to outfit their pre-owned inventory with late-model bikes that either have a little bit of manufacturer warranty left, or are just outside of manufacturer warranty coverage. In addition to being top sellers, these vehicles offer the most opportunity to sell F&I products on the back-end, helping powersports dealerships increase their profit potential.
Q. Where will powersports dealers focus most of their attention?
A. To maximize foot traffic and profit per bike sold, F&I will be the priority for 2018. More powersports dealers will retool their product menu to ensure they have the right products for their inventory and their consumer market. They will refocus any advertising and marketing dollars to feature their customer service levels and market-differentiating consumer protection products. We’ll also see dealers begin to strategically use F&I product sales to foster repeat business. Teams will be trained on how to discuss the benefits and terms of F&I products, with the message that once the coverage ends, to bring the bike back to the dealership and trade it in. This will help create a three to four-year sale cycle for repeat business.
Q. More lenders are expected to pull out of the subprime space in 2018. How will this affect powersports dealers?
A. One of the biggest challenges that faced powersports dealers in 2017 was the pullout of the subprime market by more lenders. Going in to 2018, we see this trend continue. To help keep as many good lenders operating in the powersports space, we’ll see dealers focus more time and attention on cultivating better lender relationships. Dealers will focus more training efforts on managing each lender’s look-to-book, qualifying customers, making sure all stipulations are accounted for, and that the bikes are titled and white-slipped correctly.
Q. How are powersports dealers trying to appeal to Millennial consumers?
A. We’re already seeing dealers invest more in reaching consumers where they are, using their website and mobile apps to engage with consumers before, during and after the motorcycle purchase. In addition, we’re seeing a growing interest in moving to a virtual F&I model. This helps powersports dealerships appeal to a demographic that prefers to interact online, while also helping dealerships better address staffing challenges.