PowerSports Business

November 27, 2017

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www.PowersportsBusiness.com Powersports Business • November 27, 2017 • 9 OPINION FROM THE EDITOR WHAT THEY'RE SAYING... 1. Textron Off Road introduces Havoc X 2. Caterpillar to enter UTV market 3. Polaris names ORV president 4. Honda releases 2018 Gold Wing 5. Yamaha unveils three-wheel motorcycle 6. Suzuki expands 2018 motorcycle, scooter lineup 7. Lawsuit filed over Buffalo Chip crash 8. Kawasaki Ninja 400 revealed at Tokyo Motor Show 9. Polaris introduces special edition 2018 models 10. Polaris sales up 25 percent in Q3 11. Textron Off Road introduces Prowler EV models 12. Zero Motorcycles releases 2018 model lineup 13. LINE-X unveils Polaris partnership 14. Harley-Davidson reports decreased retail sales in Q3 15. Polaris recalls 19K side-by-sides due to crash hazard The headlines above belong to the most frequently viewed articles from Pow- ersports Business' three-times weekly e-news during the Oct. 20-Nov. 1 period. The number is based on the percentage of e-news viewers who clicked on the article's headline. To subscribe to e-news, go to www.bit.ly/PSBEnewsSignup WHAT'S THE HOTTEST INDUSTRY TOPIC? POWERSPORTS BUSINESS BLOG Leading industry executives and dealer consultants are among the contributors to PSB's blog. See below for recent blogs. Visit powersportsbusiness.com/blogs Powersports Business recently completed our Q3 2017 dealer survey in partnership with BMO Capital Markets analyst Gerrick Johnson. The 96 dealers surveyed rep- resented 37 states and four Canadian provinces. Of the dealers surveyed, Yamaha (43 dealers) and Polaris (38) had the great- est representation, followed by Honda (33), Kawa- saki (29), Suzuki (22) and Can-Am (19). The survey showed positive trends both year- over-year and compared to Q2, ending a downturn of weaker results that had been part of the Q2 survey. The side-by-side and ATV categories registered the strongest improvement, while PWC/boats main- tained their solid performance. Motorcycle retail sales in Q3 remained weak. Business conditions rebounded in Q3, with 76 percent of dealers calling business conditions as either average, good or very strong. Only 63 per- cent of the dealers said the same in Q2. Similarly, the response was also better than the results from Q3 2016, when 73 percent of dealers said business con- ditions were either average, good or very strong. Looking at unit sales year-over-year in Q3, 60 percent of dealers said sales grew, with 20 percent citing double-digit growth. Remember, our surveys include side-by-side dealers. And while overall unit sales grew, sales relative to the dealer principals' business plans improved only slightly on a sequen- tial and year-over-year basis, with 17 percent report- ing business being above plan and 49 percent saying it was below plan. Overall, 71 percent of dealers are expecting some form of growth over the next 12 months, versus 29 percent who are expecting some form of contraction. Those metrics compare to 74 percent and 26 percent, respectively, in Q3 2016. Looking at their off-road vehicle business, Can-Am was the outperformer, with 79 percent of dealers reporting sales increases. Polaris fol- lowed, with 76 percent of dealers reporting sales increases. The Polaris data is notable in that only 43 percent of Polaris ORV dealers reported a sales increase in Q3 2016. Johnson reports that transition of Arctic Cat's ORV business to Textron Off Road "appears to be having a positive impact. This is the first survey we have conducted where dealer responses regarding the Arctic Cat/Textron Off Road product was actu- ally pretty good." Overall new unit sales improved versus Q2 2017, and the Q3 2017 reading was the best we've observed since we began our partnership with BMO Capital Markets in Q2 2016. In Q3 2017, 39 percent of dealers said new unit sales were either good or very strong, with 31 percent saying poor or very weak. This is an improvement from Q2 2017, when 26 percent of dealers said they were either good or very strong, with 40 percent saying poor or very weak. It's also a similar improvement from Q3, when only 27 percent of dealers responded positively, and 41 per- cent called new unit sales as either poor or weak. When asked more specifically about actual unit sales performance on a year-over-year basis, PWC was once again the top-performing segment, with 81 percent of PWC dealers reporting growth. A total of 70 percent of respondents said their side-by-side business was up, with 31 percent up by double digits. This is a significant increase from the 54 percent of respondents who claimed their side-by- side business was up, with 26 percent up by double digits, in our Q3 2016 survey. Dealers who complete the survey receive the composite data results as a PDF. The Q3 2017 PDF of the survey that dealers receive includes more than 20 pages of Q3 and historical data. PSB Dave McMahon is editor in chief of Powersports Business. Contact him at 763/383-4411 or dmcmahon@powersportsbusiness.com. Q3 dealer survey: Side-by-side retail sales maintain growth trend ON THE BLOG: FOUR MARKETING TACTICS TO STOP USING TODAY Great information, Colleen. Not sure I agree with dropping direct mail, though, unless you are referring to a random mass mailing. A sweet discount offer in the mail to existing customers at the right time can still get them to come in, and the ones that do are nearly 100-percent closeable. It is also traceable if they must bring in the coupon to get the discount. ON THE PSB LINKEDIN GROUP: Don't reward the bad behavior of the customer. Tell them "No," or "Sorry that we can't satisfy you; we wish you luck finding someone who can." Empower employees to do the right thing, no matter what the cost, and give the employees a cost-of-living adjustment (COLA) to their pay every year. ON THE BLOG: ARE YOUR EMPLOYEES SATISFIED WITH YOUR JOBS? Liz, I had a great time moderating that class. I always learn new things when I teach and appreciated what Justin was doing and the discussion on staff surveys. Before I do an on-site assessment of a dealership, I send the dealer an employee survey form with instructions on gathering their responses while ensuring anonymity. Their responses provide valuable information about potential management issues as well as insights into areas that require improvements or procedure changes. SCOTT HOCHMUTH Owner, Real Performance Marketing Contrary to the onslaught of negativity touted on the news, reasons exist to be confident that 2018 can be a better year for business: The stock market is up 25 percent in the last 12 months, creat- ing over $5.2 trillion in valuation just this year alone; consumer confidence is at the highest level since 2004; and the economy grew by more than 3 percent in the second quarter of 2017. RYAN BROWN Vice President, Powersports, Big Time Advertising Do you have a plan to increase sales and make money over the holidays? The holidays are all about fun, which is no different than our business. In powersports, we sell fun. Don't be that dealership that simply accepts the slowing winter months — do some- thing exciting this year for the holidays! Plan today; it's not too late to make a statement to the consumers in your market. Have fun this holiday season and sell a lot. FORREST FLINN Managing Partner, Powersports Management Concepts Dealing with employee terminations is never easy or fun. As my momma always said, "Life is not fair," but she also said, "If you keep your ducks in line, you will not have much to worry about." You may not win unemployment claims all the time, but having good dealership policies and procedures that are sound and legal can help you mini- mize losses, decrease your costs and avoid further legal problems. RON CARIKER Owner and President, 7 Media Group You're in an industry where you rely heavily on that in-store customer experience. The customer needs to sit on that bike or try on that helmet, feel an engine rev and take that demo ride to make his or her purchase decision. Shopping online is just not part of the experience a customer is looking for most times. Part of choosing to be your customer is the opportunity for camara- derie and sharing his or her love of the industry with others. ONLINE WITH POWERSPORTSBUSINESS.COM DAVE McMAHON Wilkins Harley-Davidson staff members show off their 2017 Powersports Business Power 50 window cling at the dealership in Barre, Vermont. Did you get your award? Send your photos to dmcmahon@powersportsbusiness.com and share your accomplishment.

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