“Despite the tough economic events of recent months our focus as an association representing the OEM authorized powersports dealers across Canada has not changed much,” says Stephen Bieda, president and CEO of the Canadian Powersports Dealers’ Association. “Educating the dealers on the best practices and interdepartmental efficiencies that lead to quality customer service is always at, or near the top of our priority list.”

Bieda says reports coming to his organization from dealers during the latter half of 2008 were “a mixed bag,” with some Ontario and Alberta dealers reporting record sales, while others point to a “toughening up” on credit scoring and increased problems getting financing for their operations.

“Right now, dealers need some protections put in place so that they can’t have the rug pulled out from under them so easily, and to better promote reinvestment in their dealerships,” he says.

Bieda says with few exceptions, the Canadian powersports consumer is being “underserved” by dealers who have been reluctant to defend the retail side of the business by insisting on a better balance of power with suppliers.

“We feel strongly that as relations (with dealers) become more equitable that consumers will be better served, and the powersports industry as a whole will be better poised to defend itself against other segments of recreational spending,” he says.

Jo-Anne Farquhar, director of communications and public affairs for both the Motorcycle & Moped Industry Council (MMIC) and the Canadian Off-Highway Vehicle Distributors Council (COHV), says the industry continues to promote two- and three-wheeled on-road vehicles as “a cost effective, fuel efficient, and environmentally friendly alternative” to their four-wheel counterparts with success, and ATVs and off-road motorcycles are increasingly seen as modern agricultural tools as well as recreational vehicles.

Farquhar said sales reports of powersports machines represented by MMIC and COHV showed steady increases in 2007, with motorcycle and scooter sales jumping eight percent in October alone when compared to the year ago figures.

“Statistics collected by MMIC on behalf of its member companies showed that at the peak of the 2008 spring/summer selling season, motorcycle and scooter retail sales were up almost 13 percent over year-to-date sales in 2007,” she says. “Scooter sales alone year-to-date for June 2008 were up 22 percent compared to 2007.”

Farquhar says that the MMIC/COHV 2007 annual report showed that just under 171,000 new motorcycles and ATVs were sold in Canada in the year, at an estimated retail value exceeding $2.16 billion. This same report calculated that motorcycles and scooters made up 48.25 percent of these sales. And by dollar value, new motorcycle sales accounted for 49.88 percent of the total retail value of sales.

Since sales have been increasing steadily in those categories during 2008, things continue to look good for that sector for 2009.

“We believe 2009 will be a good year for the motorcycle and ATV industries,” says Farquhar. “It will be very consistent with what we’ve seen in 2008.”
Still, late-2008 reports from several of the industry’s major manufacturers show that, at least globally, sales of some powersports products are in decline.
Japan’s four major motorcycle manufacturers produced 882,976 units during the first nine months of the year, down 29.9 percent from the units produced during the same nine-month period in 2007, the Japan Automobile Manufacturers Association (JAMA) reported in November.

Combined motorcycle shipments to North America from Honda, Kawasaki, Suzuki, and Yamaha were down 23.6 percent when compared to the same period last year.

But global and North American situations are not specifically Canadian, says Yamaha Canada’s Bryan Hudgin. His company’s 2008 sales numbers are up by about seven percent in all categories, with the exception of ATVs. That category was down slightly at about four percent.

Hudgin said the Canadian industry has to deal with a sparse population spread over a vast territory, as well as the “inescapable fact” that only two currencies – the Japanese Yen and the US dollar – are ever used when determining the real cost of imports from Japan. When you’re working with a fluctuating loonie, companies have to get creative to keep things moving, he says.

“We’ve put some pretty generous rebate programs in place, and that’s helped our sales in Canada,” Hudgin says. “We can always change our sales programs, but it’s much more difficult to change the market when, globally, things are so volatile.”

Hudgin believes Canadian powersports dealers are well positioned to prosper in 2009, in part because Canada “is probably the second-cheapest place in the world to buy these products.”

“Things may change as far as the product mix we do sell next year, but volume sales of smaller, less costly machines and accessories will keep going strong,” he says.

Bombardier Recreational Products (BRP), which annually captures the lion’s share of Canadian sales of snowmobiles and PWCs (and to a lesser extent with its Can-Am series of ATV and other off-road products) also sees good things ahead for 2009, and is prepared to build again on solid 2008 sales.

“We’re fortunate that snowmobilers are so passionate about their sport, and for many it is a lifestyle and something woven into the fabric of their lives,” says BRP media relations manager Steve Cowing. “Today’s industry sales numbers remain positive.”

“For this reason, our dealers may experience a little less of a cut back than other recreational products, but BRP is always mindful of the market place, and will continue to respond to dealers’ needs,” says Cowing. “We have very aggressive retail incentives in place to help move inventory to the consumers, which is ultimately the best plan.”

Like Bieda, Cowing and other industry experts are keeping a close watch on the tightening Canadian credit situation to see what impact, if any, it will have on powersports sales.

“The high end of the market will always be there as enthusiasts and affluent people will demand great products. It’s the mid- and lower-end consumer who has to adjust now, and they are looking more towards value or filling a niche,” Cowing says. “Obviously, all of us are concerned and are working to assure credit is available, and in Canada that is still doing alright today.”

Perhaps one of the best indicators of how strong the Canadian powersports market remains heading into 2009 comes from the Toronto International Snowmobile, ATV and Powersports Show, held annually in that city for the past 21 years. It is billed as the world’s largest event of its kind.

Show president Richard Kehoe said overall attendance at this year’s October show was up nine percent over 2007, and vendor participation increased by more than two percent, and that industry excitement was at an all time high.

“Vendors were on fire this year,” Kehoe says. “They are so excited about what lies ahead.”
One of those vendors was Guelph, Ontario-based Royal Distributing, owned by John Mockrie. Mockrie leased 25,000 square feet of space at this year’s Toronto show and came away with a five percent increase in product sales over the 2007 show.

Mockrie recently had to increase Royal’s prices on a few items, but was able to get in quite a few buys on most products before the latest drop in the Canadiandollar. Those savings will be passed on to his customers, who Mockrie says are still very enthusiastic about their powersports machines.”

“We’ve been hearing such doom and gloom around the world, so I was very pleasantly surprised at what I saw (at the show) this year,” Mockrie says. “I think we have to be somewhat cautiously optimistic, but we’re still expecting double digit growth for the industry next year.

“We believe 2009 will be a year to really test the business acumen of dealership owners nationwide,” Bieda says. “Change is occurring more rapidly than ever on all fronts and sales programs are getting more complicated all the time, so those dealers that are hands-on operators, with a strong sense of the pulse of their operations, are going to come out ahead of the rest of the pack.”

CPT