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March 8, 2010: ‘A great opportunity to grow’

March 8, 2010
Filed under Features

CINCINNATI — A growing segment of the V-twin market has plenty of room to expand if dealers will place more emphasis — and staffing — on it.

That was the message from Justyn Amstutz, executive vice president of sales and marketing for National Powersport Auctions, during a seminar at the V-Twin Expo in Cincinnati.

Amstutz backed that idea up with a number of statistics, but one in particular: 1.3 million. That was the number of preowned, on-road registrations that occurred from January-November of last year that did not touch either a dealership or the wholesale environment.

Instead, those 1.3 million business transactions occurred between private parties.

“We all have great opportunity to grow in this space,” said Amstutz, whose company has auction locations in San Diego, Dallas, Atlanta and Cincinnati.


Clearly the preowned market has grown, even as dealerships remain on the sidelines to so many sales. From September of 2008 to present day, the number of used registrations to every new bike registration has increased, from two to one to four to one, according to state data compiled by R.L. Polk.

The V-twin used market has followed suit, Amstutz said, revealing U.S. data that showed used registrations catching new ones in total volume in 2006 and later surpassing new registrations. The gap between new and used registrations has only spread since 2006.

“Because new product sales are going down, it makes the preowned product more valuable,” Amstutz said.

Still how much dealers are capitalizing on this part of the market remains unclear. Less than 2 percent of the dealers in attendance at the seminar said they have full-time staff dedicated to finding used bikes for their stores. Amstutz advised dealers to not only use traditional sources — classified ads — but online ones as well — Craig’s List, eBay and Cycle Trader — to find and then purchase used bikes.

Amstutz said dealer calls to private parties should be boiled down to two questions: Why do you want to sell your bike, and how much do you really want for it? The former question is particularly important as Amstutz said 30 percent of consumers want to sell their bike to get a new one.

“I don’t mean new as in brand new, I mean additional or new to them,” Amstutz said of the consumer.

The price issue — or “actual cash value” of the bike — is easily identified by any of a number of different industry or auction value guides, some of which are available at no charge to the dealer. These guides provide dealers an idea of what they can expect the bike to be sold at wholesale. Amstutz advised dealers to pay the consumer 85-90 percent of the actual cash value, thus ensuring they will profit at wholesale if they decide not to retail the unit.

“A lot of people are selling their bikes because they need cash, and they’re desperate,” he said. “I know it sounds horrible to capitalize on other people’s misery, but there’s a whole bunch of other people that are.”

And it’s not just the 2- or 3-year-old product that is worth looking at, especially in the V-twin market. Amstutz said the average age of the V-twin motorcycle is 8 years, meaning “people have confidence to buy a 7- or 8-year-old H-D product. We’ve seen the values of older bikes with lower miles on them increase past the value of newer bikes.”

Beyond the private party, Amstutz advised dealers to take advantage of the wholesale market to build their preowned stock, particularly in the winter months. This is historically the best time to buy V-twin bikes, according to data the auction company owns. This data shows a dealer can expect to spend 90 percent of the actual cash value of the bike in November or December, but then sell that at auction in the spring at 110 percent of actual cash value. To put that into specifics, Amstutz used an example of a Harley-Davidson bike, which taking into account all of the OEM’s families of products usually costs around $10,000. In December, that product could be purchased at wholesale at $9,000 and then be sold in April or May for $11,000.

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