Sled dealers face another slow season
April 15, 2004
Filed under Features
Early season customer optimism seems to have faded to a disappointing snowfall reality for many snowmobile dealers in the Midwest and Eastern states.
“Customers were optimistic up until the Christmas holiday, but when we didn’t get any snow, it changed in a hurry,” said Norm Krupp, owner of Krupp’s Power Sport Inc., a Polaris dealer in Edwardsburg, Mich.
“It’s been better than we thought, but it’s still not making a profit,” said Sheila Hellermann, owner of Melrose Marine & Sports, a Polaris dealership in Melrose, Minn. “Considering the amount of snow we’ve had so far, we’re happy, but there’s no money made.”
Bill Newcomb, general manager for Owasco Marine, a Ski-Doo dealer in Auburn, N.Y., said that his business was brisk until just before Christmas. That’s when the great early-season snow melted. But the sales he made seem to offset the current lull — last year at this time, he had approximately 30 new units. This year, he has eight.
“It’s been a better economy, we’ve had good snow and the new Ski-Doos are hot,” he said. “I’ve been getting 2002 and 2003 competitive product in as trade-ins. And with a little more snow, I expect it will get brisk again.”
NEW DEALERS OPTIMISTIC
While some dealers express frustration with the market, the owners of Conrad’s Sales and Service in Abbot, Maine, show the ultimate optimism: they purchased the dealership in late November.
“It’s something my husband always wanted to do,”said Debbie Brown, the new office manager and owner. And so far, sales have been going well in all departments. The shop sells Polaris, and generally sells 100 to 125 units annually.
Wendy Lucia also entered the business as the new owner of All Season Sport Center in Swanton, Vt. She said the dealership, which sells Arctic Cat, has experienced higher-than-expected sales of parts, garments and accessories. A total showroom makeover after buying the dealership in August has paid off, she said. “We really opened it up.”
SALES DECLINE A TREND IN MIDWEST
Sales seem to have taken the biggest hit in the Midwest areas, where several seasons of poor snow are taking a toll. A recent report in Minnesota said snowmobile registrations have dropped by 30,000 in the past three years.
Dealers reported they’ve noticed a definite drop in their sales, or are taking smaller orders.
“I have less left than this time last year, but I ordered less,” Hellermann said. The dealership typically sells 100 new machines annually.
Yamaha dealer Mike McIntire, owner of Cycle Sport Yamaha in Hobart, Ind., bumped down his order for this year. Last year, he sold 21 new units. This year, he’s sold eight. “I didn’t want to take a chance,” he said, “and I’m glad that I didn’t. I had some early season sales, but didn’t make anything on them. A snowmobile business in the Midwest just doesn’t make money. Yamaha’s done all they can to help us out.”
Gordy Carlson, owner of Honyak Polaris in Arkdale, Wis., would be happy if he could clear out his non-current stock. The Polaris-only dealer, who typically sells 75 new machines per year, has about 40 non-current machines dating back to 2002. He calls his sales of sled and soft goods so far this season “fair.” “We got a little snow early in December and it was great, but then it melted and it was like flipping a light switch,” he said. He’s about even with last year on sales.
Krupp said he had enthusiastic, optimistic customers up until Christmas. “Our early season was exceptional,” he said. “But the last six weeks have been flat. I think that no snow is the key factor.” He typically sells 75 units annually, and has 15 new still in stock, plus two carryovers. PG&A sales are generally good for Krupp — he’s sold 12 of the 15 new Ski-Doo high-end BVS helmets he ordered. But the rest of his clothing sales have been slower. “We’re still a little overstocked on everything,” he said.
If there’s a dealership that’s bucking the trend, it’s Roach’s Lawn & Marine in Crosslake, Minn. The Arctic Cat dealer has doubled its sales from last year, said owner Kelly Roach, though it only sold six units last year. “I’ve been surprised at the amount of sales,” she said. Ridable snow in the area has helped, she said, and the dirt on the trails have not hurt the service department. “But service is slow,” she added, noting that people who would normally buy new wearbars and slides are waiting to see if more snow will come.
Dealers we contacted noted some changes in their customer base, or tactics on how to sell machines in a low-snow year.
“I have to sell snowmobiles as a vacation vehicle,” he said. “I tell customers, ‘You have an RV in your back yard, but you don’t sleep in it when you’re at home.’ People have to remember that they’re usually driving to the snow.”
Hellermann has noticed a large number of bargain shoppers coming in to her dealership. “My early-season sales were people who were getting back into the sport because they could do it so cheap,” she said. “We have more carryovers than what I like, but I’m lucky that I have nothing older than ‘03s.
Lucia cited a new mandatory liability insurance law in Vermont as a reason that lower displacement machines are selling well, but also why new buyers are not coming in. “It’s an added expense,” she said.
The hot models varied between dealers and regions.
Krupp has been out of the Ski-Doo MX Z 800 for six weeks, and drove to Ohio to pick more up. However, he still has 10 MX Z 600s in stock. He’s mostly seeing younger customers — mid- to late-20s, in his shop.
Newcomb isn’t too shy to admit he’s happy that Ski-Doo sales are, as a whole, doing well in the overall market. His hot seller has been the MX Z 600, though he admits he under-ordered the 800. The GSX models have also sold well. He’s had a harder time interesting his customers in the Renegades or the V-1000 four-strokes.
For McIntire, his sled sales have consisted of SXVipers and three RX-1s, but his service department is totally booked. He’s within short driving distance of ridable snow now, and customers who have taken a “wait and see if it snows” attitude are just now getting their pre-season prep work done. He estimates half of his service business now is pre-season work.
The best sellers for All Season in Vermont have been the Sabercat series, and the service department has kept busy.
Bill Vickery of Vickery Motorsports of Denver, Colo., estimates he’s down approximately 10% from this time last season. He’s noted his best sales with the Ski-Doo Summit 800s, mediocre sales of the Polaris machines and poor sales for Yamahas. His main business is selling high-displacement mountain machines.