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Apr. 6, 2009 – Snowmobile sales nearly split evenly

April 6, 2009
Filed under Features

By Karin Gelschus
Associate Editor

As the snowmobile-riding season comes to a close, dealers are split in terms of the success of their retail sled sales this year.
Roughly half of dealers reported either an increase or similar unit sales compared to the last selling season while the other half reported a decrease in sales, according to a survey of 150 dealers conducted for Powersports Business.
There are a couple factors that helped boost sales this year, including potentially the troubled U.S. economy that has prompted more people to vacation closer to home. Another factor is the amount of snowfall in most of the key states. About
78 percent of the dealers said there was good snowfall in their area while 21.5 percent said they had to drive to find snow.
Significant snowfall also helped used unit sales — more than 70 percent of dealers said their used sales were either up or even with the previous year — as well as dealer inventory and parts and accessory sales, according to the survey done by Irwin Broh & Associates.
Those findings put the industry in a good position for next winter, says Ed Klim, president of the International Snowmobile Manufacturers Association. “(Snowmobilers) have put a lot of miles on their sleds over the last two years,” he noted. “A lot of them are ready to buy.”

A silver lining?
Is it possible the down economy could be helping the snowmobile industry? Klim thinks that might be the case since more people are vacationing closer to home, which has resulted in more snowmobilers and increased riding time. Rather than taking vacations out West or going on cruises, people in the East and Midwest are snowmobiling closer to home – “staycationing,” said Klim referring to a word that was used in a meeting he attended about tourism.
“That happened in the Great Lakes. We had more visitors from Ohio, Indiana and Illinois,” Klim added. “It really happened on the East Coast. When you look at the tourism data, it shows Vermont, New Hampshire and Maine tourism is up a lot – sometimes by double-digit percents.
“That’s why we know in some cases we’re going to see strong registration numbers. We’re going to see strong recreation tourism dollar amounts,” Klim said, adding people are still spending money, it’s just more localized.
“If they stay off the cruise lines, they’re going to have $5,000-$10,000 a year extra. I do believe people will continue to go on vacation, I just think they’re going to change their behavior a little, and I think that’s going to benefit us.”
Klim suspects this trend will continue next winter. “I don’t think people are going to change their behavior,” he said. “This whole staycationing idea might be a trend.”
Even though some dealers’ snowmobile sales have slowed because of the economy, it’s evident the interest in the sport is still there from parts and accessory sales. The survey revealed nearly half of the dealers said their sales were somewhat or substantially higher compared to last year.
“That’s great news because that’s a good, strong profit center for the dealers and the manufacturers,” Klim said. “It tells us people are fixing up their products and using them, so they’re not getting out of the activity. There’s a high level of interest there. I do my own spotty check because I go to the dealers and I talk to the manufacturers and everybody is telling me they’re feeling pretty good about PG&A, and that’s cool.”

Inventory
The majority of dealers said their inventory for both used and noncurrent sleds was the same as last year or below.
Only 20 percent of dealers said their inventory of noncurrents was either somewhat or substantially higher compared to the prior year. The percentage was even lower for dealers who said their used sled inventory was somewhat or substantially higher than last year at 14 percent.
“We pretty much cleaned out the inventory this year,” Klim said. “We’re in really good shape now. Manufacturers have watched their build numbers. The dealers moved them, and we’re all in better shape for the future.”

Global sales
While official numbers aren’t available yet, above average amounts of snow in other parts of the world are helping international snowmobile sales, says Klim.
“In some markets, sales were actually up, particularly in a number of Canadian providences, particularly in Québec and Ontario.” he noted. “There’s above average snowfall in Finland, Norway and Sweden this year. That’s really good especially for Finland because they had a couple years where it was down. We’re feeling that sales are quite strong in Finland. Their economies are much stronger than ours, the Scandinavian economies, probably stronger than Canada even, so that’s good.”

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