Aug. 11, 2008 – A 2008 first-half report card
August 11, 2008
Filed under Features
By Neil Pascale
Chuck Herman, national sales manager for Marshall Distributing, has a wish that certainly has been uttered more than a few times by officials across the aftermarket industry.
“If only I could turn all my motocross helmets into street helmets,” Herman said, laughing.
With some notable exceptions, the aftermarket industry this first half of 2008 is largely following new unit retail sales in terms of hot and cold segments.
“The dirt business is way off and the street business is way up,” Herman said, echoing officials from close to 10 aftermarket companies that spoke recently with Powersports Business about the state of the aftermarket business.
Besides the sheer difference in the off-road and on-highway segments, aftermarket officials point to a booming business for practical accessories — like safety equipment, saddlebags and seats — as well as parts for older motorcycles and even scooter accessories.
Following the retail trend
Retail sales of new off-road units — both ATV and off-highway bikes — are down largely 20 percent or more from a year ago. That weakened market is definitely impacting aftermarket companies.
“ATV is off pretty significantly,” Brad Kruckenberg, general manager of Moose Racing, said, noting the effect higher U.S. gas prices have had on the segment.
“The moto side and the ATV side suffer a little bit because people don’t want to load two dirt bikes in the back of the pickup truck and drive an hour, two hours to a riding area and put more gas into a bike.”
However, Kruckenberg notes the business for UTV accessories remains strong and is looking for strong dealer orders for snowplows this fall after last year’s big winter sales success.
Herman of Marshall Distributing notes the company’s ATV sales have largely remained unchanged from last year as a result of the company growing its sales force and its coverage area into the South and Midwest. Herman notes Marshall has recently hired reps that used to work for Motorcycle Stuff, which owner Global Motorsport Group was scheduled to shut down in August.
“The motocross business is weak,” Herman said, “although we’re doing pretty well with our new apparel line, maybe because it’s new.
“On the other hand, anything to do with street (motorcycles), I can’t keep up with.”
That includes GMAX helmets, which are doing exceptionally well in the low- to mid-range price category.
Phil Davy, the brand manager for Icon, also reports significantly higher sales in helmets in the first half vs. a year ago.
“Some dealers, the best dealers, are recognizing that in a downturn of the economy to put cheaper stuff in stock is self-defeating,” Davy said, “because if somebody doesn’t have money, they are not buying cheaper stuff. They’re not buying anything. So you have to market to the people who do have money.”
Saddlebag manufacturers and distributors report vastly improved sales in the first half vs. a year ago. Many point to the impact of higher gas prices, which have prompted more consumers to use their motorcycles as their main transportation option.
“We’re way up this year over last year,” said Tom Monroe, director of sales and marketing for Saddlemen, the seat and luggage manufacturer based out of Rancho Dominguez, Calif. “We have a new line for 2008 that’s going gangbusters through Parts Unlimited and Drag Specialties. It’s got a lot of features and a lot of value. We struggled to keep the price down and it’s paying off.”
Brandon Westphal, sales manager of Big Bike Parts in Rice Lake, Wis., has seen a similar pattern, as sales of luggage and covers have escalated this year.
The increased riding is just starting to affect the brake business, says Larry Mills, president of DP Brakes in Lancaster, N.Y. Mills has already seen his business start to pick up even more as consumers not only ride more, but ride their older motorcycles more often.
That pattern also has been noticed by Tim Calhoun, U.S. manager for exhaust manufacturer LeoVince.
“We’re seeing old pipes evaporate,” Calhoun said. “We’re seeing 2003, 2004, 2005 exhaust system phone calls now up in a much greater volume.
“We had (older model) stuff we knew we needed to move through and we had begun to discount. We didn’t look at it for a couple months and looked up again and realized it wasn’t a glut anymore. It’s going away quickly.”
But the biggest surprise for Calhoun has been scooter exhaust sales. The company’s sales for this segment are up 300 percent over a year ago.
The increase has been so notable that Calhoun is considering advertising the company’s scooter exhaust systems in mainstream motorcycle magazines.
“I don’t think your scooter buyers are scooter aficionados,” he said. “I think they’re wannabe motorcycle riders.”
This year’s more practical consumer, who is buying scooters and lower-displacement bikes at a faster pace than a year ago, also are being safety conscious.
Todd Lentz, director of sales of EVS Sports, says the company’s sales are up across the board. “Any sort of neck protection or knee brace is selling hot right now,” he said, noting, “and once we ship the new RC Evolution (the company’s new neck protector), we’ll be up substantially.”