Business Growth

Finding Success Without a Stimulus

Prospects for any additional monetary stimulus prior to the November election declined significantly when a whittled-down Republican plan failed in the Senate on a partisan vote. The proposal amounted to a fraction of the $1 trillion plan Republicans had offered in negotiations with Democrats, who in turn are demanding more than twice as much. The failure to compromise would leave millions of jobless Americans in potentially dire straits, as they exhaust traditional jobless benefits and states run out of additional funds.

For powersports dealers, the last quarter of this year could be very different than the first three quarters. To recap, sales of powersports vehicles, led by ATVs and other recreational units, set records in Q2, with average major unit sales up 60.7 percent and overall revenue gaining by 51.2 percent. Much of this boom was spurred by stimulus funds, coupled with a desire to get outside safely.

Now, the country remains in the grips of the pandemic. According to the Department of Labor, more than 55 million workers have filed for benefits over the past six months. Businesses continue to lay off hundreds of thousands of workers as they grapple with fewer sales and depleted federal aid. Yet despite facing unprecedented economic challenges, over half of U.S. consumers report saving more, according to CIT’s new survey conducted by The Harris Poll.  The survey also states that 60 percent of Gen Z and Millennial consumers reported an uptick in savings. When thinking about the future, another 76 percent of consumers are somewhat to very likely to save more than they usually do each month.

Powersports Market

A Looming Cliff for Powersports Dealers?

It’s been a fantastic year for some powersports dealers. Thanks to government stimulus checks and a burning desire to leave the house, ATV and recreational powersports sales have gone through the roof from April to June. Many dealers have already exceeded their 2020 forecasts for the year!

But will the boom times continue? Or will sales fall from these unprecedented highs? There are several factors which could impact the second half of 2020.

Government stimulus

Second quarter sales were propelled in large part by the pandemic-driven CARES Act which provided stimulus money to those who had been furloughed or lost employment. Those stimulus funds have ended and further funds are stalled in Congress until early September. If another round of stimulus is offered, chances are that powersports sales will continue, albeit not at the levels seen in Q2.

Compliance Powersports Market

Don’t Skip Steps

While the country is still in the grips of the pandemic, sales of powersports vehicles, led by ATVs and other recreational units, have been going gangbusters. In May, the average major unit sales were up 60.7 percent and overall revenue increased 51.2 percent.

Going into the third quarter, inventory constraints could put a significant damper on sales gains. Polaris and other companies were forced to close manufacturing facilities due to COVID-19 outbreaks. Analysts from BMO Capital Markets report that inventory shortages across all brands could impact sales for the remainder of the year. However, with more consumers entering the market, and more units being financed, the overall forecast for sales remains cautiously optimistic.

With many powersports dealers surpassing sales records throughout the summer, one could surmise it is Christmas in July, except for one small data point. Identity fraud has reared its ugly head. While fraud has always been an area of focus in the powersports world, a couple of unique pandemic situations have exacerbated the situation.