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Powersports Business • August 2023 • 25

Until 2021 , nearly all the NEV volume was going through Golf / Golf Accessory dealerships . With the rapid growth of the market in the last 24 months , PPM estimates that perhaps 20−30 percent of the NEV sales increase went through powersports dealers and other independents like Marine and RV retailers .

WHAT ’ S NEXT ? Dealer inventories are building , higher interest rates are raising purchase costs , consumer confidence is falling , and the market has experienced a two-year cooling period . So , what ’ s next ?

Of the nearly 5,000 dealers surveyed by PPM for its annual report , an overwhelming majority suggested UTV inventories have increased , albeit incrementally , since the product shortage experienced in 2020 and 2021 . “ It really depends which brands you ’ re talking about ,” a Honda , Kawasaki , Yamaha and CFMoto retailer recently told PPM . “ One of our brands has been delivering product unabated throughout this whole ordeal , and the other three have picked up the pace again .

“ So , yes , we ’ re seeing more product coming in but it ’ s not like we have a dozen different models from one brand just waiting for a customer .”

A marked percentage of surveyed dealers also spoke of a cooling in the surge of consumers who sought out powersports vehicles during the height of the social distancing orders that resulted from the Covid pandemic .

“ During Covid , we essentially became order-takers ,” a Honda and Yamaha dealer recently told PPM , mimicking what others have proclaimed . “ We ’ d have one unit come in and it ’ d be gone within a day or two whether it was the model the customer was looking for or not . Anyone else who wanted a unit had to order it and wait for who knows how long .

“ Now , with deliveries resuming , we ’ re not seeing that fevered pitch anymore . Sure , we have customers continuing to query us , but it ’ s almost like everyone who wanted one got one .”

PPM uses economic data published by various sources on the U . S . economy to help build its forecast . One source is Blue Chip Economic Indicators – a panel of 50−plus economists employed by some of America ’ s largest manufacturers , banks , insurance companies and brokerage firms .

Annualized GDP grew at a 2.1 percent rate in 2022 , down from 5.9 percent in 2021 – which was the fastest pace since 1984 . Looking forward , the Blue Chip panel says it believes GDP will retract , managing only 1.2 percent in 2023 and 0.9 percent in 2024 .

Rising interest rates and elevated inflation are anticipated to severely restrain personal consumption expenditures – the largest expenditure component of GDP .

Notable : Inflation surged 6.8 percent in 2022 – the largest increase since 1982 .

The policymaking Federal Open Market Committee ( FOMC ) has been fighting record-high U . S . inflation that took off during the Covid−19 pandemic . A combination of recent interest rate hikes , slowing economic growth and a tightening credit market has helped cool off price gains , although experts agree that the job is not quite complete .

In June 2023 , after 10 consecutive interest rate hikes since Mach 2022 , the Fed took a breather by leaving the target rate unchanged at a range of 5−5.25 percent .

“ Inflation data received over the past three months show a welcome reduction in the monthly pace of increases ,” said Fed Chairman Jerome Powell . “ And while recent developments are encouraging , we will need

substantially more evidence to be confident that inflation is on a sustained downward path .”

PPM also looks at consumer confidence . The monthly Consumer Confidence Survey , based on a probability-design random sample , is conducted for independent , global research association The Conference Board by Nielsen .

“ Consumer confidence declined in May as consumers ’ view of current conditions became somewhat less upbeat while their expectations remained gloomy ,” said Ataman Ozyildirim , senior director , Economics at The Conference Board . “ Consumers continued to view inflation as a major influence on their view of the U . S . economy , and their expectations remain elevated , but stable .”

Asked about their expectations six months hence , consumers ’ optimism about business conditions outlook declined : 12.9 percent

of consumers surveyed in May 2023 expect business conditions will improve , down from 20.9 percent in February 2023 ; 20.6 percent expect business conditions to worsen , up from 19.9 percent .

According to The Conference Board ’ s recent CEO Survey , more than 1,100 business leaders surveyed in both the U . S . and globally say slow growth and a recession are their No . 1 external worry of 2023 . Inflation ranks as their second biggest concern , followed by higher interest rates . In 2022 , borrowing costs were low on the worry list , ranking 25th .

The survey also found that most executives don ’ t think stronger economic growth will return anytime soon . 51 percent of CEOs worldwide — and 60 percent of U . S . CEOs – expect a tepid year ahead , with their

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Given the external forces shaping the economy , PPM projects 2023 North American retail UTV sales to be , at best , essentially flat with 2022 .

Greg Boeder is senior partner and Guido Ebert is senior analyst – powersports for Power Products Marketing ( PPM ). The Minneapolis-based research firm , has curated its powersports retail sales data for more than 20 years . The firm provides detailed market share data and research services to the global power equipment industry . Markets covered include Powersports , Diesel Pleasure Boats and Commercial Vessels , Farm ( AG ) Machinery , Construction Machinery , Lawn & Garden Equipment , Generator Sets and Underground Mining Equipment .

Billy Slade @ bs247365