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April 2, 2007 – Revealing a hidden side of the market

April 2, 2007
Filed under Features

A small survey of dealers who are not selling the biggest brand names provides an interesting and unique picture of the industry.
Powersports Business contacted 15 dealerships in 14 states across the nation that sell new powersports units, but none from any of the largest manufacturers, including Harley-Davidson, Honda, Yamaha, Suzuki, Kawasaki, Polaris, BRP or Arctic Cat.
The aim of the survey: to provide a glimpse of how many new units these dealerships sold last year and in doing so, provide a better overall picture of the industry.
To accomplish that, we have to know how many such dealerships there are in the United States. Bruce Ramsey, vice president of sales and marketing for KYMCO, estimates there are as many as 5,000 independent dealers. How many of those dealerships are selling new units isn’t known. But if half of these dealerships are selling new vehicles, then Powersports Business estimates they sold about 285,000 new units in 2006. If only one-third of the 5,000 dealerships are selling new vehicles, their total new unit sales would be closer to 188,000. Those numbers are based on the average of new units the surveyed dealers sold in 2006, which is 114.
The 285,000 figure is relatively small compared to the number of new units sold by Motorcycle Industry Council (MIC)-reporting members, which was about 1.7 million in 2006. But whereas the MIC total showed a slight decrease last year, the dealers involved in the Powersports Business study overwhelming reported sales increases last year. In fact, only one of the 15 dealers surveyed said they sold fewer new units last year than the previous year.
Here’s a closer look at those dealerships:
World Class Distributors
Richmond, Va.
Paul Rhodes, manager
Number of new units sold last year: 230
Is that an increase or decrease from the previous year?: Increase by 15 percent
Percentage of ATV, motorcycles, scooters: Scooters 50 percent, motorcycles 25 percent, ATVs 25 percent.
Preowned motorcycles: Makes up about 75 percent of the store’s total sales.
How have you marketed these OEMs that don’t have good customer brand awareness?: “We advertise through the Internet, on the radio and then through Cycle Trader,” Rhodes said, “and we really advertise quite heavily in those areas. Although we do a lot now, the plan is to increase it in the next year.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We have our own in-house warranties for everything we sell, unless you’re dealing with a manufacturer that has its own warranty service, then we don’t offer anything above and beyond that,” he said.


N. Motion Motorsports
Marshallville, Ga.
Michael Parker, owner
Number of new units sold last year: 85
Is that an increase or decrease from the past year?: A 15 percent increase from the past year
Types of new vehicles being sold: ATVs and motorcycles
New unit sales breakdown: 75 percent ATVs and 25 percent motorcycles
Preowned motorcycles: Makes up less than
5 percent of dealership’s total sales
How have you marketed these OEMs that don’t have good consumer brand awareness? Parker notes the dealership does advertise, “but we haven’t got the numbers out of it we wanted,” he said, noting the dealership mainly runs specials in print advertising. The dealership also does event marketing.
How do you ensure your customers that they can rely on the availability of parts and warranties?: Parker said the availability of parts has definitely been an issue with consumers, but he’s been able to overcome that. “I tell them I can fix it,” he said, “and I do.”


Grandpa’s
Fort Myers, Fla.
Lynda Stewart, vice president
Number of new units sold last year: 75-100
Is that an increase or decrease from the past year?: Sales increased 20-25 percent from the previous year.
Types of new vehicles being sold: ATVs, scooters and motorcycles
New unit sales breakdown: 50 percent scooters, 25 percent motorcycles and 25 percent ATVs.
Preowned motorcycles: Makes up about 5 percent of the dealership’s total vehicle sales.
How have you marketed these OEMs that don’t have good consumer brand awareness?: The dealership mainly advertises in Cycle Trader and other shoppers.
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We’re not selling cheap Chinese,” Stewart said. “We’re only selling companies that we know have the parts and tech backup.”


Sargents Motor Sports
Portland, Ore.
Gary Sargent Sr., owner
Number of new units sold last year: 349
Is that an increase or decrease from the past year?: That’s an increase of about 34 percent from the previous year.
Types of new vehicles being sold: Motorcycles, ATVs and scooters.
New unit sales breakdown: 40 percent motorcycles, 30 percent scooters, 30 percent ATVs
Preowned motorcycles: Makes up about 5 percent of the dealership’s total vehicle sales.
How have you marketed these OEMs that don’t have good consumer brand awareness?: Sargent produces advertising that compares the lower-price point OEMs to Japanese OEM products, focusing on both price and features.
How do you ensure your customers that they can rely on the availability of parts and warranties?: “That’s a valid concern,” Sargent said, noting he has his consumers tour his parts department to assure them that parts for his new units are available.


La Barons Powersports
Almont, Mich.
Chad Dingman, manager
Number of new units sold last year: 20-30
Is that an increase or decrease from the past year?: Not available as the dealership started selling new units in the past year
Types of new vehicles being sold: ATVs, motorcycles, go-karts
New unit sales breakdown: 33 percent ATVs, 33 percent motorcycles, 33 percent go-karts
Preowned motorcycles: Makes up about 70 percent of the dealership’s total sales in terms of vehicle revenue.
How have you marketed these OEMs that don’t have good consumer brand awareness?: Advertising in both the radio and newspaper. “E-ton here has a good reputation,” Dingman said, noting the OEM has four dealers in the area.
How do you ensure your customers that they can rely on the availability of parts and warranties?: Dingman said the key is having parts in stock, offering full service and provide consumers with documentation “so they feel safe.”


RPM Powersports
Weston, W.Va.
Chad Belt, owner
Number of new units sold last year: 24
Is that an increase or decrease from the past year?: Not available since they only started selling new units last year.
Types of new vehicles being sold: ATVs and scooters
New unit sales breakdown: 75 percent ATVs and 25 percent scooters
Preowned motorcycles: Makes up at least 50 percent of the dealership’s total vehicle sales.
How have you marketed these OEMs that don’t have good consumer brand awareness?: Has advertised these units in local papers; advertises sales or special finance deals.
How do you ensure your customers that they can rely on the availability of parts and warranties?: “People just want to know about parts,” Belt said. “We tell them that parts is usually 100 percent and service is right here.”


Outdoor Adventures
Fallston, Md.
Pete Tutrani, co-owner
Number of new units sold last year: 200
Is that an increase or decrease from the past year?: Same as last year.
Types of new vehicles being sold: Go-karts, ATVs and scooters
New unit sales breakdown: 60 percent go-karts, 20 percent ATVs and 20 percent scooters
Preowned motorcycles: Does not currently sell used motorcycles.
How have you marketed these OEMs that don’t have good consumer brand awareness?: The dealership does some local advertising, mostly in the area newspaper.


Tulsa Scooters
Tulsa, Okla.
Justin Owen, general manager
Number of new units sold last year: 190 Is that an increase or decrease from the previous year?: An increase of more than 15 percent from the previous year.
Percentage of ATV, motorcycles, scooters: 100 percent scooters
Preowned scooters: Makes up 2 percent of total sales
How have you marketed these OEMs that don’t have good customer brand awareness?: “We generally tend to market our store more so than the brand because most of our buyers aren’t really educated on what we sell,” Owen said. “So we advertise to get them in the door, and then we educate them once they’re here.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We have a third-party warranty service our customers can buy,” Owen said.


Cycles and More
Athens, Tenn.
Jimmy Woods, owner
Number of new units sold last year: 65
Is than an increase or decrease from the previous year?: Definitely an increase, by 25-30 percent.
Percentage of ATV, motorcycles, scooters: Motorcycle 90 percent, 5 percent ATVs and 5 percent scooters.
Preowned motorcycles: Makes up 2 percent of total sales.
How have you marketed these OEMs that don’t have good customer brand awareness?: “We advertise through the radio and in print,” Woods said, “and we emphasize that with United Motors, their price points are much lower than a Honda or Yamaha, and they offer a 3-year warranty on the motor and transmission, where the others are 90 days.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We don’t have an in-house warranty program,” he said. “The only warranties available to the customer are through the manufacturer.”


Trackside Cycle
Haltom City, Texas
Clay Hoenshell, general manager
New of new units sold last year: 43
Is that an increase or decrease from the previous year?: An increase by 50 percent
Percentage of ATV, motorcycles, scooters: Motorcycles 55 percent, scooter 25 percent, ATVs 20 percent
Preowned motorcycles: Makes up about 1-2 percent of total sales
How have you marketed these OEMs that don’t have good customer brand awareness?: “We market our products through our new Web site, and we’ve also done some TV commercials, which have really been successful,” Hoenshell said. “We also advertise through Cycle Trader, and we’ve found that these marketing techniques have been really effective.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We have our own in-house warranty program that covers service, parts and anything else that the manufacturer’s warranty doesn’t cover,” he said.


RPM Motorsports of Spokane Valley
Spokane Valley, Wash.
Russ Meili, owner
New of new units sold last year: 104
Is that an increase or decrease from the previous year?: An increase of 20 percent
Percentage of ATV, motorcycles, scooters: Motorcycles 80 percent, ATVs 15 percent, scooters 5 percent
Preowned motorcycles: Makes up about 5-7 percent of total sales.
How have you marketed these OEMs that don’t have good customer brand awareness?: “We advertise through the radio and also
through print publications,” Meili said, “but mostly we inform the customers of the
warranty programs available through the
manufacturers, and allow them to compare that to competitors’ programs.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “Many of our manufacturer’s warranty programs provide them with a great deal of protection, so that’s all we have available, and we’ve never had a complaint yet,” he said.


Premier Auto Center
Kewaskum, Wis.
Bob Hackbarth, owner
New of new units sold last year: 44
Is that an increase or decrease from the previous year?: An increase of 15 percent
Percentage of ATV, motorcycles, scooters: Motorcycles 60 percent, ATVs 35 percent, scooters 5 percent
Preowned motorcycles: Makes up about 5 percent of the store’s total sales.
How have you marketed these OEMs that don’t have good customer brand awareness?:
“We don’t,” Hackbarth said. “We focus on
getting customers into the door, then once
we have them in the store we let them test
the product and provide them information
on warranty services, etc.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We have a third-party warranty program in addition to the manufacturer’s warranty,” he said.


Damron Motorcycle Co.
Lubbock, Texas
Melinda Puente, manager
New of new units sold last year: 33
Is that an increase or decrease from the previous year?: Increase, by 8 percent
Percentage of ATV, motorcycles, scooters: 100 percent motorcycles
Preowned motorcycles: Makes up about 85 percent of the store’s total sales.
How have you marketed these OEMs that don’t have good customer brand awareness?: “We market price points to our customers, and we do that through our Web site and newspaper ads,” Puente said. “If you can get them in the door on price, then you can sell them on quality of the unit.”
How do you ensure your customers that they can rely on the availability of parts and warranties?: “We have a third-party warranty program that we use,” Puente noted. “It’s available to our customers at the time of purchase, and a majority of our customers utilize it. It’s a nice complement to the manufacturer warranty programs already in place.”


Pope Enterprises
West Harrison, Ind.
Ray Pope, owner
Number of new units sold last year: 76
Is that an increase or decrease from the past year?: A decrease by about half as the dealership has stopped selling some of its lowest-cost vehicles because of reliability issues.
Types of new vehicles being sold: ATVs, motorcycles and scooters
New unit sales breakdown: 50 percent ATVs, 25 percent motorcycles and 25 percent scooters
Preowned motorcycles: Makes up about 10 percent of the dealership’s total sales
How have you marketed these OEMs that don’t have good consumer brand awareness?: Pope said he’s done very little advertising up to now, but plans on doing some this year. Mostly, the dealership relies on bringing the new units to area events and marketing them there.
How do you ensure your customers that they can rely on the availability of parts and warranties?: Pope says it depends on the consumer and the brand. For some brands, customers are provided with the manufacturers’ warranty. Other customers opt for cheaper units that are sold “as is” with a healthy discount, Pope said. The dealership does not have an in-house warranty program. psb

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