Court rules for Arctic Cat in dealer’s protest
A Pennsylvania Commonwealth Court panel has decided that two Arctic Cat dealerships within about an 11-mile drive of each other can continue to sell the brand.
The panel overruled a state Board of Vehicle Manufacturers, Dealers and Salespersons ruling that had stopped one of the two dealers from adding Arctic Cat to its lineup, reported The Patriot-News. The board had originally determined both dealerships carrying the line, along with a local Bass Pro Shops store, would cause a “ruinous price war,” possibly pushing out one of the smaller dealers. However, after Arctic Cat petitioned for a review of the decision, the Commonwealth Court panel overturned the board’s decision.
The original protest was filed by Neiman’s Garage & Equipment, Inc., in Dover, which objected to Kennedy RV & Powersports, in Dillsburg, adding the Arctic Cat lineup.
To read more about the decision from The Patriot-News, click here.
Whether or not it’s a “plan” by Arctic Cat to put out smaller dealers, it is not uncommon for manufacturers to place dealers in close proximity as their ultimate goal is to move units regardless of dealer profit, all the while keeping the original dealers level of inventory the same (best case) even though the market will be shared.
In my 30+ years in the powersport/marine industry, I have seen many dealers have to close due to increased price competition and the consumers willingness to travel 50-100 miles for a better deal that can’t be matched due to better incentives to bigger dealers. I would be willing to bet that the BassPro shop will be buying machines at an advantage due to larger commitment, while not providing any kind of service.
In NY, the law states that the manufacturer has to provide the same pricing and incentives to ALL dealers, but the manufacturers continue their tiered pricing policies because no one has the money to fight them.
While not being able to make money on the machine sale, we used to be able to make some money on PG&A, but the internet is killing that aspect of the business, again because of competition from larger dealers with better buying programs, or competition from our “partners’ the manufacturers.
There is a reason that manufacturers such as Arctic Cat has lost 50% of their dealer base, and the above are a few of them.
Yes, the dealers are the wholesalers, because they have to discount their prices, or lose deals. The factory is the retailer, in a sense, as they set their price and get it.
Also, where have the margins gone to? The % of profit gets smaller each year.
The Chinese products have more allure now, as they are building better (some of them), machines with higher percentages of profit.