For a number of dealers, powersports equipment is a lucrative option when looking for a product line to increase off-season sales. However, with the worrisome economic state and ever-increasing gas prices, some dealers might question if it is a viable option right now. By and large, most would tell you it is.
Powersports sales have remained fairly steady across regions, although some areas are naturally showing more demand. “Certain parts of the country are more thickly populated so you don’t have areas where many people will be riding ATVs and UTVs,” explains Paul Meeks, president of powersports accessory manufacturer Great Day Inc. “Surprisingly, though, most parts of the country have plenty of places where you can ride ATVs and UTVs.”
EXTERNAL FACTORS
Recent economic concerns have been affecting sales volumes in many industries. While the powersports industry is not immune, they have seen little impact. “In the powersports industry, we are all concerned about the downturn in the economy right now,” says Meeks. “Surprisingly, the powersports industry has not yet been drastically affected by the increase in gas prices or the scare of recession.”
Faced with soaring gas prices, consumers looking for a fuel-friendly commute have begun turning to motor scooters. “The smaller-displacement scooters will offer as much as 110 mpg, while the larger highway-capable scooters offer as much as 70 mpg,” explains Rick Pawelka, marketing communications manager for KYMCO USA. In response to scooter demand, bikes are being offered with larger engine displacement to accommodate the longer commutes and to make them appropriate for interstate travel.
“Scooter sales are growing rapidly while motorcycle and ATV sales are soft,” says Pawelka. “Fuel costs are continuing to drive an increase in scooter sales, but unfortunately have the opposite effect on ATV sales.” While ATV sales have taken a small dip, the trend towards battery-operated ATVs has helped stabilize sales overall.
“The increase in the cost of fuel itself is not a big concern as far as the use of an ATV or UTV because they don’t burn that much gas,” says Meeks. “Additionally, a trend towards battery-operated vehicles may mean a good future.”
For a purchase price only a bit higher than a gasoline-powered model, consumers can purchase a battery-operated ATV or UTV. The fact that the battery-operated options are environmentally friendly also attracts customers.
“The purchase cost may run a little higher,” says Meeks. “But with the fuel savings factored in, you’re looking at savings beyond the initial purchase price.” The battery-powered vehicle is relatively maintenance-free, requiring only to be occasionally plugged into a charger. They do, however, have limitations for how far they can travel on one charge. If a customer was looking for something to use for longer rides, gas-powered would obviously be more appropriate.
ADD-ONS AND FINANCING
An additional way for dealers to score off a powersports buy is with accessory sales. Some examples of accessory options include storage boxes, rain covers, cargo racks, winches, brush guards, lifts and a wide range of performance components.
“The way we help dealers make more money is by offering a unique line of products,” explains Meeks. “With two or three accessory items, they may make as much on the accessories as they make on the sale of the vehicle.” Many popular accessory options offered by Great Day Inc. would be ideal for landscaper use. The Powerloader is useful when transporting heavy materials. Spraying equipment and loading ramps are also offered.
Trying for the accessory sale can truly help a dealer pick up where other sales have tapered off. “It’s not that difficult to talk somebody into putting two or three accessories on their equipment,” says Meeks. “The accessory sale helps the dealer generate more dollars and profit.”
Purchasing the powersports equipment can be made a little easier for the customer with the help of financing programs. “KYMCO USA offers some of the best retail financing programs available in the powersports market today, with interest rates as low as 1.9%,” explains Pawelka. “We also offer 180-day same as cash options.” Most times, accessory purchases and extended warranties can also be purchased through financing.
The powersports industry is not indestructible, but has thus far proved to be resilient. Selling powersports products and accessories may help dealers offset lost sales and increase retail activity in the off-season. If trends in product design and construction continue to meet market needs, sales are expected to hold up.
“So far, sales on the retail level have not been killed by the downturn,” shares Meeks. “We’re not exempt from the problems in the economy, but I think we are in a lot better shape than several other industries.”
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