Categories
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.

Continue reading “New Opportunities Spell Success for Second Half”
Categories
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.

Continue reading “Where Are You Making Your Money?”
Categories
Business Growth

Got Pre-Orders? Don’t Forget the Back End

The results of the Q1 2022 Powersports Business/BMO Capital Markets Dealer Survey have been released, reflecting a distinct change in sales. For the third consecutive quarter, 27 percent of responding dealers indicated their business was below plan, 12 percent were ahead of plan and 61 percent were on plan.

The February CDK Lightspeed Dealer Management System report showed a bit of a bright spot with major unit sales up 13.4 percent versus February 2021. Revenue also increased 11.3 percent as compared to the three percent gain in January 2022. But these numbers are a far cry from the roaring revenue generated during the height of the pandemic.

The primary culprit of these below-plan numbers is lack of new unit inventory. The supply chain continues to wreak havoc on manufacturing, prompting OEMs to ship bare bones chassis to dealers in order to have something to fill the showroom. The continued microchip shortage coupled with rising inflation and gas prices is impacting everything from gauges to sensors for new units. As these items trickle in, dealers are quickly installing parts to move completed units out the door.

Continue reading “Got Pre-Orders? Don’t Forget the Back End”