Grace Performance – Kimball, MI – April 4, 2005
April 7, 2005
Filed under Power Profiles
2203 Wadham Road
Kimball, MI 48074-1915
Mark Grace and Todd Chartier
Founded in September 1997 as a 9,000-sq.-ft. dealership; moved next door to present 21,000-sq.-ft. location one year ago. Carries Honda motorcycles and ATVs, Suzuki motorcycles and ATVs, Arctic Cat snowmobiles and ATVs, Ski-Doo snowmobiles, Bombardier ATVs, and Sea-Doo PWC and jet boats. Largest-selling segment is motorcycle, or if separated into dirtbikes and streetbikes, ATV.
Located 50 miles north of Detroit on Lake Huron, three miles from Port Huron (population 60,000), on the border of Canada. “Most dealerships draw from 360 degrees around them, but because we are on the border, we really only draw from 180 degrees,” explains Mark Grace.
“With the Canadian dollar the way it is, the Canadians don’t buy much in the United States.” 15 employees and $6.5 million in annual revenue.
Grace’s greatest concern is the ban on two-stroke engines. “Four-strokes are actually an improvement for the consumer because they hold up better and last longer,” he says. “But it costs more to build a four-stroke, so the price of watercraft has gone up immensely. We used to have $4,000 models; now you can’t touch anything for less than $7,000 to $8,000. The price of dirtbikes has also gone up. They haven’t stopped selling, but they’ve almost priced themselves out of the market.”
Wild sleds in Michigan: the Ski-Doo Rev 600 and 800, the Arctic Cat Firecat, “and Arctic Cat has just released its 2006 Crossfire 700, which is going to be a hot one,” says Grace.
Other bestselling models include the Suzuki King Quad 700 fuel-injected ATV, the Honda VTX 1800 streetbike, and the Honda CRF 450 dirtbike. “We sell a lot of Fox, Oakley, Thor, and Cycle Country, which makes snowplows, camo kits, and other accessories for the four-wheelers.”
CUSTOMER BUYING TRENDS
Grace notes that most customers buy their ATVs for utility. “We’re not in a really big farming community, but many people are using ATVs for working around the yard, maybe dragging trailer or plowing the driveway.”
The bulk of Grace Performance’s customers are 18 to 35 years old. “We see more people financing than 10 years ago. People have spent the last penny, but they won’t give up their toys, that’s for sure.”
While Grace doesn’t see any immediate powersports threats, he points out that there aren’t any ATV or snowmobile trails in the area. “Our customers have to go two-and-a-half hours to touch the trails. Gaylord is a really popular spot for snowmobiling, while the St. Helen Mile/Rose City area is popular with ATV riders.”
PARTS AND SERVICE
Grace Performance has four folks in the parts department: two at the counter, a shipping-and-receiving clerk, and a manager. In the service department there are three ‘A’ techs, two ‘B’ techs (apprentices), a service writer, and a service manager, and everyone is cross-trained. Grace says that moving into the new building, with more than double the space, was “a huge change.”
PROMOTIONAL HOME RUNS
The dealership advertises on billboards, on TV, on the radio, and in the newspaper, and holds open houses twice per year (spring for motorcycles, fall for snowmobiles) and poker runs occasionally.
WORDS OF ADVICE
Grace’s advice is to advertise vehicles at the actual selling price. “A lot of dealers in Detroit and Chicago advertise below cost, then once they get the guy into the store, they bump him up to the price they really should be advertising.
“A couple of dealers started it, then others figured they had to follow suit. Since we
are in a small community, we can’t and don’t do that.
“We tell customers, ‘They can’t sell it to you for that.’ They reply, ‘It’s right here in print.’ Then we tell them, ‘When you get there, they’re going to charge you $500 for freight and $1,000 for setup.’
“Sometimes we can educate a customer, but other times they just don’t want to listen. This hurts the industry because, afterward, customers are leery and don’t trust anybody. If you’re going to charge for freight and prep, set an honest price-$125 or $150, whatever it costs you.” psb
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