River Front Honda
January 1, 2003
Filed under Power Profiles
436 State Route 7 North
Gallipolis, Ohio, 45631
14,000-sq.-ft. dealership founded at the present location in 1985. 100 miles south of Columbus, Ohio, and 60 miles west of Charleston, West Virginia. Carries Honda, Yamaha, and Polaris. The largest-selling segment is ATV, followed by motorcycle. Also carries power equipment — lawn tractors, generators, weed eaters, etc. “We used to carry Polaris PWC, but had too much trouble with them,” says Cox. “We plan on starting back in that segment with Honda.” 15 employees.
“We used to sell mostly motorcycles, but ATVs have taken over,” notes Cox. “In 1985 there were only three or four manufacturers of ATVs. Now there are so many brands of cheap models, exported from countries that don’t make very good products. People who buy those may be into ATV riding for a while, but they’ll get out. The parts won’t be available.”
Cox says that if they see a $2,600 Honda sitting beside a $1,200 no-name ATV, “they ought to realize why.”
Revving up at River Front: Honda’s Rubicon, FourTrax, and Rincon ATVs, “although all the Hondas are pretty hot sellers,” says Cox. “In Yamaha the best-selling ATV is the Grizzly, and in Polaris, the Sportsman 700. We sell a lot of ATV accessories, including winches and snow plows, and Fox garments — T-shirts, hats, and riding apparel.”
Customer Buying Trends
Cox says about 80% of his customers use their ATVs for pleasure, and just 20% for work, such as ranching. The typical ATV customer is 25 years of age and up, while motorcyclists may be 18, “but we probably see more 50-year-olds.”
The major industry in Gallipolis is power generation. “Probably 80% of customers finance their purchases, and they use the manufacturers’ programs because they have the cheapest rates.”
Cox isn’t seeing anti-powersports issues in Ohio, “But West Virginia claims to have the leading ATV death rate, due to the terrain. That state has really been pushing for higher taxes to get more money out of the ATV folks, because it’s a big business for West Virginia. And they’re trying to enact a helmet law.”
PARTS AND SERVICE
River Front Honda has six service technicians (who go through the OEMs’ training every year) and a service manager, plus two dedicated folks in the parts department. Still, it’s difficult to make service very profitable.
“In this area there are so many people who work on ATVs in their garages. They come here to buy parts. Our hourly service rate is only $42, which is a lot of money to some people, but it’s not — because of garage insurance. Just this year alone, our premium went up by $4,000. Insurance has gone up 20% to 30% the last several years. So it really hurts.”
WORDS OF ADVICE
Cox is concerned about price wars, which he calls “the worst problem we have in the ATV and motorcycle business. The only dealers who don’t give anything away are Harley-Davidson.
“We find dealers who lose money to make a sale. It’s mind-boggling. I realize that one dealer can’t take care of everybody, but we draw from a long way. In Columbus there are four Honda dealers. When a person wants to buy they just go from one dealer to the next to price-shop. With Honda, it doesn’t make any difference — every dealer pays the same, whether they order one unit or 1,000. Service is the best thing to sell. But nobody buys extended warranties because Hondas run and run,” he says, citing a newspaper article about a 1983 Honda Accord with one-million miles on the odometer.
Still, “ATVs are so sophisticated now. We have a digital readout for the service department–speedometer, hour meter, even a screen that shows the unit shifting into four-wheel drive. Next year they’re coming out with an ATV that has GPS so riders don’t get lost.”
Cox says to tell your customers that they’re not buying the extended warranty for the drive train and the engine. “It’s for the electronics, really. We sell more extended warranties than we did five years ago because of that. They’re getting bigger and bigger, and have more and more power.”