Snowmobile sales are likely to continue their growth into 2020, and companies like BRP and Yamaha Financial Services remain upbeat on the segment.
“We had a very, very long winter, and it was good for the snow season, so sales were good on the snowmobile side,” BRP Chief Financial Officer Sebastien Martel told Powersports Finance.
BRP Ski-Doo sales were up in the high-20% range year over year, the company reported for the quarter ended Oct. 31, 2019. While the sales increase was partly responsible for 13% year-over-year growth in seasonal product revenue, BRP’s snowmobile sales lagged the broader industry.
Snowmobile sales rose in the mid-30% range YOY, Chief Executive Jose Boisjoli said on the earnings call, and BRP cited “timing” as a reason its sales were below the industry average.
“Because we have about 50% of the market and because there is a high ratio of presold units sold to consumers, we need to balance the way we ship vehicles to the dealers,” Boisjoli explained. “I don’t think anyone had predicted at the end of October the markets to be up by 30%.
Meanwhile, Yamaha saw current model year snowmobile sales decline last year, but that was “by design,” Bryan Hudgin, national marketing manager for snowmobile at Yamaha Financial Services, told PSF. “2018 and subsequent years saw us with a lot of non-current inventory in the market. Rather than throw expensive rebates to try and correct our inventory and devalue our customers’ snowmobiles in the market, we limited the production of current models.”
By reducing snowmobile inventory, the OEM planned to restore the market to a majority of current model year vehicles. Thus far, the “strategy is paying off for us,” Hudgin added.
From a lending perspective, Roadrunner Financial increased its snowmobile penetration rate after expanding into a region with better weather for the vehicles.
“We currently have six territories for our regional sales managers, and in 2019 we hired for the mountain district,” said Jon Vestal, vice president of sales, powersports and outdoor power equipment. “The mountain district, of course, has lots of snow. We’re seeing a lot of penetration there just because we have put increased focus, with a salesperson dedicated to that territory. That, in and of itself, will help us see volume grow in that segment.”
Yamaha and BRP shared a positive outlook on the snowmobile industry for 2020. While the year may start slowly with mild weather in Central and Eastern regions, “we are creating competitive programs to ensure we stay at the level we want to be with months of stock and sales,” Yamaha’s Hudgin said.
BRP’s Martel believes the OEM’s product innovation will spark new riders to buy snowmobiles, and singled out the Ski-Doo Summit 850 E-TEC Turbo, a turbocharged two-stroke engine snowmobile.
“Snowmobile, you could say, is a mature industry but nonetheless we’re able to find ways to get consumers excited, have them interested in the products, go to our dealers and buy products,” Martel explained. “I think that’s what we’re going to continue doing in the next fiscal year.”