Business is all about long-term strategies and crafting a successful plan that will see the company through the years. Of course, obstacles can arise that bring the need for adaptation, and in powersports today challenges also open new opportunities.
For example, a lender can be presented with a new partnership to help expand the business, maybe with a vendor or even a credit union, as in the case of ThunderRoad Financial and its partnership with Georgia’s Own Credit Union. When presented with these new avenues, it’s up to the lender or dealer to decide how best to move forward and how whether this is the right move for the company.
Expanding to New Territories
For a startup like Fuel Capital Group, geographically expanding is a particular focus as it works to increase business by onboarding new dealerships.
“We got approval recently to do business in Tennesee,” President and Chief Executive Peter Wasmer told Powersports Finance. “Right now, we are dynamically focused on pre-owned Harley-Davidsons, and we are looking toward states that have a high-percent of riders. What are the number one states for motorcycle riding as a whole?”
Fuel Capital is a leasing company that soft-launched in August and works with 30 dealers in 11 states. Obviously, the more states a lender can obtain approval to do business the more dealerships can join the program.
Powersports is more regionally specific than the auto industry, because of the difference in priority and weather. Still, like auto, there’s a high concentration of riders in states like Flordia, California, and Texas — but to a greater degree.
Fuel Capital underwrites leases exclusively for Harley-Davidsons, and while it could be said that broadening to other models would reach more customers, Harley is still the largest motorcycle company in America, and it’s “our philosophy that if there are riders, they are likely on their way ultimately to a Harley-Davidson,” Wasmer added.
Branching Out With New Partners
While lenders and dealerships forge partnerships with each other, another vital piece of the equation is the technology provider, such as the dealer management system or the website portal. Vendors can offer similar, but different products, so finding the right one for the business can be crucial for operations.
Even vendors have to form strategies around these partnerships. Rollick Outdoor, a powersports buying program that offers special discounts and integrates with online buying portals for dealerships, partners with affinity groups. The affinity groups help to connect the dealership with a new customer base, so Rollick has criteria for how it chooses these partners, Chief Executive Bernie Brenner told PSF.
“We look for partners that have trusted brands, that have a large base of customers, and that will help our dealers,” Brenner said. “If they have those things, then we believe that we can activate those members and bring incremental sales to the dealer. If they have finance products related to these transactions, even better.”
Rollick partners with affinity groups such as Progressive and Walmart to provide specialized powersports rates at 150 dealerships. It’s also seeking partnerships with lenders, credit unions, and banks.
Boosting New Sales With Used Vehicles
Financing can help make new bikes more affordable, but used bikes provide an opportunity to boost new vehicle sales as well. For example, used bikes can also be utilized as a marketing technique to get consumers in the door for the chance to get upsold on a new model.
“A new dealer does have more to think about [than independent dealers],” Jim Woodruff, chief operating officer of National Powersports Auction, said. “[Franchise dealers] are going to have new vehicles, and pre-owned vehicles compliment that. What new vehicles might they be having a hard time getting ahold of and can they fill the gap by having a similar used vehicle on their floor?”
On the whole, franchise dealers sell more used vehicles because they have a more extensive inventory and a steady stream of customers attracted to the brand. Dealerships have to make lots of decisions on a day-to-day basis, and they have an opportunity with used vehicles to attract more customers down the line.
“What type of price point can they have on a pre-owned inventory to attract fresh riders or new customers to the dealership that they can then sell a new vehicle to later in the future when they are ready to upgrade?” Woodruff said. “There’s a lot of different strategies that a franchised new dealer can employ using pre-owned to actually help with their vehicle sales. In an independent dealership situation, they don’t have to think about that because they don’t have new vehicles.”
Don’t let opportunity ride by. Join us for PowerSports Finance 2018 on Nov. 6-7 at the Omni Fort Worth. Early registration ends this Friday, September 28th at midnight, so register here. Go to www.powersportsfinance.net for more details.