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.

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.

Categories
Dealership Training

Subscription Training Delivers Profit

May closed out with powersports dealers feeling pretty good about the state of their business. According to a Powersports Business Online Learning Series poll, nearly one-third of responding dealers ranked the success level of their dealership as a 9 or 10 (on a scale of 1-10). It’s no wonder! April numbers continued their meteoric rise, with major unit sales rising 39.2 percent in April 2021 versus the previous year. With Spring in full swing and Summer just around the corner – and the rain subsiding for many – the forecast for the first half of 2021 remains very strong for both new and used units.

Despite continued inventory constraints and some concerns about labor and inflationary numbers, it looks like the powersports industry will have a banner year. But what if there was some additional profit to be had from unit sales? And not just small change, but measurable PRU? Those profit opportunities can be found in training.

This month, EFG launched a subscription-based training model which includes both digital and in-person options, delivering timely tools in a learning environment that works best for each employee. The service also supports the new digital retailing model now used by many powersports dealers. Dealer management can select their preferred subscription package across a wide variety of curriculum, benefiting from up to a 20 percent discount from standard training rates.