Much like the automotive industry, the powersports industry is flooded with preowned inventories, Glenice Wilder, vice president of powersports at EFG Companies, told Powersports Finance on Thursday.
“With manufacturer’s pressuring franchise dealers to only sell new [vehicles], independent dealers will have ample opportunity to capitalize on the inventory influx and consumer demand,” Wilder said. “Today’s post-recession consumers cannot afford to purchase new, and will therefore create a strong market for used-bike volume.”
Many powersports manufacturers – such as Harley-Davidson – do not want their dealers to sell preowned motorcycles, they want them to sell new, said Wilder. “Clearly, you make a greater front end on a preowned [motorcycle] than you do on a new bike so I expect to see our preowned numbers increase this year, and I think we will start to see that turnaround in March because spring will start, and the auction dealers will line up.”
New-bike volume is predicted to remain flat, and manufacturers will need to implement incentives by the end of the second quarter — such as subsidized financing — to make monthly payments possible for consumers, said Wilder.
Lenders will also want to make changes to prevent the possibility of default, Wilder said. “As the powersports space continues to recover from the Great Recession, the lenders branching out within the space will want to insulate their loans from the potential of default in a market that’s highly dependable on disposable income,” she added.
Since the 2008 credit crisis, the powersports industry has made steady growth and recovery, but consumers are still wary with their purchases, said Wilder. “Having felt the sting of dealing with a monthly payment and a vehicle breakdown and/or job loss during the Great Recession, today’s powersports purchasers are more concerned with insulating themselves financially on larger purchases. This will translate into increased consumer demand for quality F&I products that address all aspects of the bike.”
EFG Companies is the sales marketing arm for four powersport lenders, including HorsePower Financial Services and MotoLease LLC, with plans to provide services to more lenders in upcoming years, according to Wilder. The company also provides direct services to more than 50 dealers in the industry, including EagleRider.