Glenice Wilder on Powersports Growth
Q. Do you foresee any growth in the powersports market?
A. 2018 became another flat year for on-road powersports dealers. However, those dealers who have diversified their inventory to include more off-road vehicles and side-by-sides, have experienced an increase in sales. This is largely due to the fact that Millennials now represent the largest working demographic in the U.S., and therefore this generation now has the largest buying power. While Millennials still like motorcycles, they are flocking to those off-road vehicles that can hold a family or group of friends. This group is not buying powersport vehicles as their primary source of transportation. Rather, older Millennials between the ages of 35 and 40, who have established careers and families, are looking for weekend vehicles. This group is still extremely price conscious. So, even though they have disposable income for a secondary vehicle, they are still looking for the best deal and most value for their money. Smart dealers will be continuing to diversify their inventory with a good mix of low cost motorcycles and off-road vehicles to appeal to this growing market.
Q. Where will powersports dealers focus most of their attention?
A. To maximize foot traffic and profit per bike sold, F&I remains a priority for 2019. We’re seeing powersports dealers retool their product menu to ensure they have the right products for their inventory and their consumer market. They are also focusing any advertising and marketing dollars to feature their customer service levels and market-differentiating consumer protection products. In the next few months, we expect to 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. What about the powersports lending situation?
A. While lenders are beginning to return to subprime and the powersports space, the challenge for dealers is actually working with those lenders. That means training their teams to know which lenders operate in which credit tier, what their stipulations are, and how to best work with them. Getting paper bought should not be difficult as long as dealerships invest in cultivating lender relationships. In the coming months, dealers should 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. Should compliance be a priority in 2019?
A. Yes! Powersports dealers may feel like compliance is taking a back seat in 2019, but that is far from the truth. While the CFPB is restructuring and pulling back, the FTC is working to take up the slack. While their attention is on retail automotive, powersports dealers have the opportunity to ensure their processes and procedures are up to snuff. It’s important that the industry generates more awareness on compliance in the coming months, as there are simple changes dealerships can make immediately to fortify operations before an auditor comes around, like ensuring privacy notices are given to every customer.