As we move into the dog days of summer, my thoughts drift to a sandy beach or a mountain trail complete with a jet ski or 4×4 utility vehicle. However, I don’t think this is going to be the year of the big getaway. Our powersports and marine industry have a lot of challenges on their hands this summer. Ongoing price concerns and lingering inflation coupled with a heightened political climate have created challenges that cause a negative overhang for both consumers and dealerships.
According to composite data from 1,700 dealers who use the Lightspeed DMS, the average dealer was down 8.4 percent in combined revenue in May 2024 as compared to 2023. This decline is especially concerning, considering we are well into the typically busy recreation season. Data from the Conference Board reflected consumer confidence continues to weaken with persistent concerns about inflation, prompting buyers to hold off on purchasing homes and autos.
But there are some bright spots on the horizon. The Committee for Economic Development, which oversees the Conference Board, shared their predictions for 2024, indicating that consumer sentiment has changed since the pandemic. Buyers are increasingly upset by uncertainty, prompting them to seek out experiences and spend on things they really enjoy. This is especially true for younger generations.
The U.S. Bureau of Labor Statistics Consumer Price Index revealed the index rose only 3 percent in June, down from 3.3 percent in May, a greater decline than anticipated and evidence that inflation is slowing. The index for gasoline fell 3.8 percent, showing consumers are seeing more affordable gas at the pump. These positive numbers were welcomed by the Federal Reserve as well, giving them the confidence to issue a lending rate cut sooner rather than later.
We at EFG have a few predictions of our own, supported by nearly 50 years of experience in retail and consumer protection – not to mention 11 presidential elections, 22 congressional elections, countless state/local contests, and the Great Recession. Our guidance for powersports dealers heading into the second half of this year is to take advantage of this pursuit of fun and lean into value-focused opportunities. To stay positive, dealers need to maximize online sales engagements, focus on localized financing and alternative creditworthiness measures to help secure the best interest rates available for your customers and cultivate a team of top performers by securing the best talent and reinforcing training for all team members.
Go for the win
Taking a positive attitude and controlling the things you can are classic business strategies, and they are perfect for our current climate. Sure, the economy and the political climate seem topsy-turvy right now, but you have no control over those things. You do have control over the climate under your rooftops. Focus on what your customers need, make sure your team has the right training to be successful, and you have the right powersports and watercraft units, and protection products to keep them running.
We know the first half of the year has been a challenge but our proven team of EFG recruiters, trainers, and experts are here to help. We bring years of experience to your team. At EFG Companies, we’re more than an F&I provider, we’re your business partner in the retail marine and personal watercraft industry. Contact us today to learn more about how our team can help you achieve your winning strategy.
