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By: Robert Janis

Powersports Shops Doing Their Best to Weather Economic Storm

Continued from page 2...
Suzuki of Gastonia
Suzuki of Gastonia

This also affects his floor plan. “The longer you have something on the floor, the more interest you pay on it on the floor plan loan,” he added. That means there is more of an expense which results in less profit for the store.

Copton gets his floor plan loan from the manufacturers. “When you order product from them, the manufacturer gives you a certain amount of flooring for free. That helps you minimize expenses. But manufacturers like to put a minimum order to that which now is unrealistic. So they want you to take excess product to get their free flooring which in the long run may be doing you a disservice.”

He has noticed that sales of sports ATV models are now taking a hit. “Predominantly, the sports models sell year around,” he said. “So there is usually good sports model sales during racing season in the spring, summer, and fall. But it has fallen off probably because we are dealing with a younger buyer group that has less credit and who feels the economic crunch hard. They are finding it very hard to get the financing they used to get.”

Copton added that the economic situation and the credit crunch are influencing the sales of ATVs. But there are other things at play. “We have an ATV situation that has changed a lot over the years,” he said. “A 350cc model was considered a big machine. Many people were buying a 250cc two-wheel drive. Now the only people buying the 250cc two-wheel drive are children, wives, and people who want a glorified golf cart. So, now people have to choose whether to buy these larger machines or keep their tractors. Size has become an issue.”

Another reason why sales are down according to Copton is that there has been a reduction in riding areas. It is a supply and demand thing. If there are fewer areas to ride, then there is less of a demand to buy an ATV. And that makes it necessary for the industry to fight to create more trails like the Hatfield and McCoy Trail and trails in the Wayne National Forest in Southern Ohio.

John Conerson is the owner of West County Powersports, St. Louis, Missouri. The dealership was opened in 1993 and Conerson became the owner in 2005. The store carries ATVs from Kawasaki, Suzuki, Polaris, and Can-Am. He has 12 employees and he has had to lay off some entry level workers. “I laid a couple off and scaled down some hours,” he said. “But I do that every year anyway. It is typical for this time of year. It is a seasonal thing, not just the economy.”

According the Conerson, manufacturers assist him with incentives programs that include rebates and financing promotions. They also give him floor plan assistance which is coupled to how many units he orders. “I have a target number they want me to beat. If I do, I get free flooring for four-to six months,” he said. He is not offering his own incentives. Instead, he is relying on the incentives offered by the manufacturers.

Suzuki of Gastonia Showroom
Suzuki of Gastonia Showroom

His best year was 2006 when he had gross sales of $5 million. His total sales were 500 units, and he sold 250 ATVs, he said. His worst year was 2008.

Manufacturers offer financing for his customers. The criteria for getting a loan have been restricted somewhat, but people with good credit are getting loans, he said. OEM promotions are a special price on certain models or low payments for two years.

He also gets loans for his customers from local banks. “I do a lot of both,” said Conerson. “I can usually get better rates from local banks and credit unions. “We’re not having any problems getting local banks to loan. It is just a matter of finding the right people--good buyers who have good credit and good debt-income ratios. I can find a customer a loan from somebody.”

His best time of the year selling ATVs is the spring through the fall. “It used to be that fall would be a real strong season for us. But during the last two years it’s been pretty bad and the economy is the biggest reason for that,” Conerson said.

His worst time of the year is the winter. “We go into a shell and spend as little money as possible. We cut out stuff we don’t need in the slow months. But we would be doing that anyway. We haven’t changed a whole lot due to the economy. We are doing what we have always done. The ATV industry is down and my numbers are down, but the dealership hasn’t changed things a whole lot. We are trying to push the back end products a little bit more, things like warranties and protection plans, and we are trying to sell more accessories with the units. Fortunately, we sell a lot of motorcycles. We sold a lot of motorcycles last year due to the price of gas. 2008 was a tremendous year for street bikes. Watercrafts and ATVs suffered due to the gas prices. So it helps that we are multi-faceted. Motorcycles have helped to carry us. So the economy hasn’t adversely affected us as it has some other shops that focus on one category,” concluded Conerson.

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