PowerSports Business

Sept 4, 2017

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www.PowersportsBusiness.com product. Or, as one dealer declared: "The rainy spring weather has put a real damper on busi- ness. We will not recover sales lost over the past two months." The weather impact has weighed on results. But there's also a fading of the "Trump Bump" as dealers begin to question the ability of the president to deliver on his promises. Perfor- mance and outlook metrics this survey tracks are all deteriorating to pre-election levels. Or, as one dealer described: "Trump chaos is killing interest in non-essentials like motorcycles." Dealers who sell PWC and boats continue to be the best-performing, as well as the most optimistic, dealer segment. After marine, side-by-side was the next strongest category, though feedback was weaker than it was in our 1Q17 survey. We note that side-by-sides are still the category showing the highest level of expected growth from dealers. In the overall ORV business, Can-Am was the outperformer, with 71 percent of dealers reporting sales increases. Given feeback about how well the company's Maverick X3 and Defender side-by-sides have been selling, such strong performance isn't surprising. Honda also did well with 68 percent of dealers reporting sales increases, with dealers indicating strong performance of its Pioneer side-by-side. Once again, Polaris was in the middle of the pack, with 44 percent of dealers seeing an increase in sales and 56 percent seeing a decline. This is down sequentially from the DEALER SURVEY CONTINUED FROM THE COVER HOW WOULD YOU CHARACTERIZE YOUR Q2 YEAR-OVER-YEAR SALES? PLEASE RATE THE FOLLOWING: TO WHAT EXTENT HAVE YOUR CONCERNS ABOUT THE FOLLOWING EXTERNAL RISK FACTORS CHANGED OVER THE PAST FEW MONTHS? See Dealer Survey, Page 9 Source: Powersports Business/BMO Capital Markets 9% 10% 13% 24% 18% 3% 20% 6% 24% 10% 5% 15% 18% 12% 10% 19% 3% 12% 16% 18% 27% 13% 12% 4% 9% 6% 9% 30% 18% 19% 25% 43% 37% 30% 26% 53% 18% 25% 20% 12% 10% 35% 15% 20% 3% 12% 22% 5% 6% 3% 7% 6% 29% 4% 3% 1% 3% 3% 3% 2% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall Side-by-sides ATVs Motorcycles Sport bikes Off-road bikes Scooters PWC Snowmobiles <-20% -10% -5% Flat +5% +10% >20% 7% 13% 4% 4% 1% 10% 29% 27% 23% 27% 9% 20% 35% 34% 39% 49% 45% 44% 24% 22% 29% 18% 37% 17% 4% 4% 5% 1% 7% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Overall New unit sales Used unit sales P&A sales Service department F&I Very weak Somewhat weak Average Somewhat strong Very strong 9% 13% 4% 5% 4% 2% 7% 28% 10% 17% 6% 18% 42% 56% 56% 67% 48% 58% 33% 3% 29% 11% 38% 18% 8% 4% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% U.S. political environment High/rising gasoline prices Financing costs/ availability Housing market Economic and/or political issues outside of the U.S. Employment outlook Significantly less concerned Somewhat less concerned About the same Somewhat more concerned Significantly more concerned

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