NPA: New-Unit Sales to Dip as Used Financing Rises in 2018

LOS ANGELES — New-vehicle sales are expected to decline in 2018 as used powersports sales and wholesale competition continues to rise, according to National Powersport Auctions.

The 2018 prediction does not come out of left-field, as new unit sales fell during the 2008 financial crisis and have been slowly recovering. Meanwhile preowned unit sales have stayed robust, especially during the downturn, Tony Altieri, NPA’s director of business development, said during a presentation at a MotoLease dealer seminar in Los Angeles last week.

Used-retail sales will continue to increase as “more entities recognize opportunities in used; dealers continue to keep or retail a broader used mix; and finance companies offer more options on used [powersports], “Altieri said.

Additionally, new sales will decline as product development strategies change and the powersports industry stays focused on growing ridership, rather than shipping more product. In 2016, there was a 3-to-1 ratio of used-to-new powersports on the road, and used-pricing today — versus 2016 — continues to be strong, he added.

Increased wholesale competition is also expected as more dealers source used inventory and volume shifts toward a more balanced mix, in addition to a continued “healthy rise” in repossession volume, Altieri said.

Current wholesale pricing continues to follow a historical seasonality, and financing options in powersports are growing as more millennials show interest in value-priced options, dealerships improve F&I understanding, and lenders report an overall increase in used portfolios, he added.

Altieri’s colleague Jim Woodruff, chief operating officer of National Powersport Auctions, will participae on a panel entitled “Where the Customers Are: An Inside Look at Vehicle Demand” at the upcoming PowerSports Finance 2017.

Woodruff and his fellow panelists will discuss segment-by-segment valuations and trends, overcoming seasonality, and metrics for better originations. Woodruff will be joined on the panel by Lenny Sims, chief business development officer at NADAguides, and Scott Yarbrough, editor of Black Book Official Motorcycle & Powersports Value Guide.

For more insights like this, attend the third annual PowerSports Finance 2017 conference, which is slated for Oct. 24-25 at the Wynn Las Vegas. The full agenda can be viewed here. To learn more — or to register — for this year’s event, visit the event’s homepage here.

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