Feb. 11, 2008 – Non-current sled sales outpace current models

Non-current units made up more than half of new snowmobile unit sales through mid-January, a recent Powersports Business survey found.
Leading drivers for the high numbers of noncurrent snowmobiles sales was dealer inventory plus the units’ more affordable prices, according to surveyed dealers interviewed for this article.
The Powersports Business dealer survey, with input from more than 150 dealers in the snowbelt, found 52.2 percent of new snowmobile unit sales have been non-current model year sleds.
So why are dealers selling so much from their non-current inventory? They have it on hand. Poor new unit sales in the past two years have left many 2006 and 2007 model snowmobiles in dealer corals.
The second fold behind the non-current sales, according to dealers, is that customers are attracted to them. Non-currents are viewed as more affordable than current models because of devaluation and the rebate packages manufacturers put together. The non-current sleds of late also often have features similar to currents. Consumers have become accustomed to these similar and affordable sleds being available, given sales trends from the past couple years.
Dealers also said that manufacturers seem to be putting together the right discount packages to draw buyers to older model year new snowmobiles.
“Sales by manufacturers to reduce cost attract people to (non-current snowmobiles),” said Tim Spaudinger, sales manager for Fix Power Sports, Byron, Minn.
A good thing, too, since Fix Power Sports has been selling strictly non-current models this selling season.
The lower price points inherent with older stock also draw interest from customers, said Tom Nelson, Jr., a salesman with T Nelson Sales in Ontario, N.Y. “Right now the affordability of the snowmobiles is the buying factor,” Nelson said. “Ten years ago, people wanted the latest and greatest, but now they look for discounts on non-currents.”
With prices for current model year sleds ever increasing, Mike Scholl, president of Scholl’s
4 Seasons Motor Sports, Elgin, Ill., worries the lower prices are doing permanent damage to the industry, however.
“People are getting used to cheap prices on the non-currents,” Scholl said. “I think it’s already had a negative effect on the industry. Manufacturers have conditioned customers to wait for this.”
Along with affordability, design, or lack thereof, has drawn customers to non-currents, dealers said. With little change among many models over the past two or three model years, customers unwilling to cough up upward of $10,000 for a 2008 machine turn to 2007 and 2006 models with roughly similar features and setting.
It hasn’t helped that until recently, some manufacturers were building noticeably more snowmobiles than were selling, leaving a number of dealers with significant excess inventory.
This year, Scholl’s 4 Seasons has sold a little better than half of its new units as non-currents, something that is atypical for the dealer.
“We never should have had this much on hand,” Scholl said. “It’s been the overbuilding of manufacturers for the last four or five years that has put us in this place.”
As with all of those slightly-less-than-necessary items available to the U.S. consumer these days, the economy plays a role in non-current snowmobile sales, too.
Michigan, a state heralded for snowmobiling yet lately plagued with the highest unemployment rate in the country, is home to Classic Motor Sports. In an attempt to draw in customers, owner Don Pishney came up with an innovative sales promotion for the numerous non-current snowmobiles he had on hand.
Starting in October, Classic Motor Sports advertised that it was selling non-current snowmobiles at N.A.D.A. Blue Book price, as though they were used sleds.
“(Non-currents) are not becoming more valuable, they’re becoming less valuable,” Pishney said. “I got the impression people are looking at used sleds thinking they can’t buy new and this (promotion) was a way to maybe change that mentality.”
While Pishney did manage to get rid of some of his non-current inventory, overall he has deemed the endeavor unsuccessful, having not sold as many snowmobiles as he set out to. Lack of discretionary income even for the promotionally priced non-currents was to blame, he said.
In the end, selling 50 percent of snowmobiles in non-currents is just part of the market righting itself, Pishney said. As manufacturers reduce production levels to be more in line with consumer demand, dealer non-current inventories will fall and so will non-currents’ role as a majority seller.
“As I reflect back, I think we’re just going through an adjustment period with snowmobiles,” Pishney said. “I don’t know when this is going to end, but I think the non-current problem is a big one.” psb