Category: Business Growth

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Business Growth

The Outcome Is In Your Hands

The third quarter of this year ended with a bang for both new and used powersports dealers, with unit sales growth up 27.3 percent. The 3Q Powersports Business/BMO Capital Markets dealer survey showed 69 percent of dealers were above plan for the year. Of the survey respondents, 83 percent are single-store operators and the majority carry a wide variety of powersports products. Both new and pre-owned unit sales were strong, with 1 in 5 dealers reporting that F&I sales were very strong.

What happens when those strong sales aren’t so strong? According to the survey results, 84 percent of respondents were concerned about the US political climate and another 63 percent were most concerned about the pandemic. When asked specifically about the presidential election, write-in comments reflected that dealers believe a Democratic win would negatively affect business.

So let’s take a quick check on our current situation. The US continues to suffer from the coronavirus. In fact, the number of new cases recorded each day has ballooned from fewer than 40,000 in September to over 100,000 in early November. And scientists are cautioning against a larger winter surge, as people are forced inside due to cold weather. Clearly, COVID-19 is not going away anytime soon.

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Business Growth

Protecting Those Gains

This year has certainly brought a lot of positive gains to the powersports industry. The government stimulus coupled with “stay at home” orders early in the year propelled buyers to snatch up ATVs and other recreational units in record numbers. According to CDK, Lightspeed DMS same-store sales for June were up 48.6 percent in the U.S., down slightly from May’s phenomenal 60.7 percent increase in sales.

Anecdotally, the third quarter has continued to be strong regardless of the fact that OEMs simply cannot move fast enough for dealers to capture all the opportunity available. While many dealers are reporting inventory shortages on both new and used bikes, they are also reporting significant gains in pre-order sales, especially within the off-road sector. However, PWC pre-orders are starting to back off because of the season change into fall. Overall, revenue has grown 51.2 percent.

This sales cycle has certainly been a windfall for powersports dealers. However, there are still challenges ahead as we wait to see if and when a second stimulus bill will be passed, as well as the progression of the COVID-19 pandemic in the fall. In light of these factors, how can you protect those gains you received in the second and third quarter?

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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.

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