Category: Business Growth

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Business Growth

2023 – Two Sides of the Coin

The challenges facing powersports dealers today are largely expected to continue in 2023, with slight changes. Economic uncertainty, evolving dealership sales models, fluctuating profitability targets, persistent staffing challenges, and continued shortages of powersports parts are just a few of the issues which will impact the coin toss governing dealership profitability.

There are some strategic plays for dealers to implement in their game plan. Let’s look at these areas to target for a winning 2023.

Focus on the end zone

On the powersports dealership team, everyone has a role to play. But the team is only successful if everyone works together to get in the end zone. Dealers who take a consumer-focused approach will find an easier path in a potentially tumultuous year. Implementing sales and customer service best practices across all teams, managing the sales from inquiry to delivery, and focusing on the ownership lifecycle in service are all approaches that will generate points on the field.

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Business Growth Powersports Market

New Opportunities Spell Success for Second Half

It’s hard to believe we are past the mid-year point of 2022. With inflation rising and consumer confidence dropping, the second half of the year could look drastically different than the first half. However, there are some strategic opportunities for powersports dealers to build in revenue and protect gains generated to date. First, let’s take a look at the state of the market.

The early results of the Q2 2022 Powersports Business/BMO Capital Markets Dealer Survey show generally positive conditions with a few exciting bright spots. 59 percent of dealers ranked business conditions as good or very strong. Activity in the service department continued strong as did pre-owned unit sales. F&I sales gets a gold star with three out of four dealers reporting average or good movement with 15 percent the exceptional dealers reporting very strong results. However, 72 percent of dealers reported new unit sales as flat to negative and 76 percent described inventory as too low.

A new study by CDK Global Lightspeed put a positive spotlight on the personal watercraft market. Average sales price has now exceeded $20,000. Out of every 10 units sold, nine were new. Lastly, Generation X is replacing Baby Boomers as the primary consumer group for powersports and watercraft. According to Pew Research, Generation X consists of just over 65 million people, accounting for 31 percent of the total U.S. income.  Looking ahead, it seems there is plenty of upside for growth and revenue in this market.

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Business Growth

Where Are You Making Your Money?

While February numbers showed major unit sales up 13.4 percent, March 2022 numbers from CDK Lightspeed DMS revealed revenue from new and pre-owned sales declined by more than four percent as compared to March 2021, based on composite data from 1,700 dealerships in the U.S. The only positive number in the CDK data was a 4.7 percent increase in service department revenue, countered by an 8 percent decrease in parts revenue. Clearly, consumers are choosing to repair their current bike – if they can get the parts!

Supply chain challenges continue to plague the powersports industry. From new units to used units to parts, 86 percent of dealers said their inventory was too low in the first quarter of 2022. According to the Q1 2022 Powersports Business/BMO Capital Markets Dealer Survey, low inventory woes have increased from Q4 2021. And the pain is being felt across all powersports segments.

While inventory levels may remain dismal for several months, there are strategic opportunities to generate revenue. Let’s consider three tactics that generate profit and strengthen customer engagement.

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