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$5,000 in accessories on one unit?

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Liz Hochstedler, Managing Editor
February 15, 2013
Filed under Features, Top Stories

Side-by-side P&A adds to profit in many dealerships

Everyone has seen a touring bike without chrome, a cruiser without a windshield and an ATV without stylized wheels, but it’s rare to see a stock side-by-side leave a dealership without a few modifications.

More than 60 percent of 155 side-by-side dealers in a Powersports Business and RBC Capital Markets fourth quarter survey reported that their sales in the UTV segment were up 5 percent or more. And it’s not just the unit sales that have them excited, but rather the propensity for those customers to pony up for higher margin parts and accessories.

It’s not uncommon for a side-by-side buyer to add $3,000 to $5,000 in accessories to a unit.

“Typically, $1,000 is a no-brainer,” said Craig Turman of Motion Cyclesports in Dallas.

Popular accessories include cabs, roofs, windshields, wheels, gun racks, plows, heaters, stereos and even street kits.

“With a street kit on them, they can go to the grocery store if they want to, which makes sense,” said Gary Hengeveld of Star Island Motorsports in Prescott Valley, Ariz.

One of the factors driving the accessory sales is the ability to add them into a financing plan, as credit is easing.

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“Sheffield is a lot more aggressive than they’ve been on that in the last year. That’s helped out our parts department,” said Kip Niles of Arlington Motorsports in Arlington, Texas.

Some OEMs have also pushed P&A sales by expanding their offerings and encouraging showroom units equipped with accessories.

“Polaris supports that, hands down, over anybody else, beyond even thinking. They push it and they support it as well,” Turman said. “It definitely helps parts and accessory sales.”

The accessory sales boost is unprecedented, dealers reported, as motorcyclists and ATV riders haven’t requested as many upgrades.

“The number of accessories for the side-by-sides I think for our dealership it’s the strongest accessory vehicle. In other words, what they spend on their motorcycle or their ATV isn’t as much as they spend on their side-by-side,” explained Robert Kay of Star City Motor Sports in Lincoln, Neb.

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Luckily for many dealers, the growth in side-by-side sales has led to this push for accessories. Fourth quarter side-by-side sales were up 20 percent for Motion Cyclesports in Dallas.

“The product is intriguing — it’s new; it’s exciting; people want it,” Turman said.

About half of all side-by-side buyers are also new to the industry, dealers report, drawing fresh faces and new money into their stores. Attracting new buyers are the side-by-sides’ seating capacities, doors, steering wheel drive, windshield and roof options.

“They’re a lot more practical than an ATV, because you can have more than one person, you can carry a load in the back,” Kay said.

And riders of all ages are getting into the sport. Turman said side-by-sides are the first powersports vehicles in which his children (ages 12-25) have shown an interest, and Hengeveld has sold some to senior citizens.

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“A lot of the older gentlemen get into them because they still want to ride and have fun,” he said.

Kay has sold a batch to a Nebraska parts company, as well as schools, golf courses, farmers and ranchers. He even saw a Ranger being used on a local ski slope recently.

“It’s a really broad array of people. They’re being used everywhere,” he said.

The dealers are hopeful that side-by-side sales will continue to improve in 2013 and bring with them a slew of P&A sales.

“It’s definitely been a help to the powersports business,” Turman said. “If it wasn’t there, it would be horrible. It definitely helps things.”

Snowmobile sales slow
As snow is scarce for the second winter in a row in many parts of the country, snowmobile dealers are again feeling the squeeze.

Half of the snowmobile dealers who participated in the Q4 survey reported snowmobile sales down 5 percent or more, even compared to what was a dismal 2011 for many. Another 17.4 percent reported sales were flat for the quarter. Many are also struggling with inventory, as 60.3 percent reported their snowmobile inventories were too heavy.

What they’re saying
Dealers shared a variety of feedback in the survey, including these comments:

“Oddly counterweighted to automotive, which was weak in Q4 around here. We finished the year strong. ATV was quite strong, indicating confidence in blue collar employment stability and growth.” — Southern dealer

“Our biggest concern at this time is weather! If we don’t get the conditions this winter, our business focus will have to be adjusted!”
— Canadian dealer

“Some things that normally sell aren’t, and some things that usually don’t sell in a particular season are.” — Northwest dealer

“Recreational margins need to increase for dealers to stay in business.” — Midwest dealer

“I would like to see dealers quit discounting new models. They should hold value or add value.” —  Midwest dealer

“Customers are looking, but they do not have any extra money in their pockets. Now taxes are going up making it even worse.”
— Southern dealer

About the survey

The Powersports Business joint fourth quarter dealer survey with RBC Capital Markets drew 217 responses from 44 different states and Canada. Consistent with prior surveys, about one-third of respondents were Polaris dealers.

    Dealers interested in participating in our quarterly surveys can contact PSB Editor in Chief Dave McMahon at 763/383-4411.

 

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