MOTORHEAD: When it Snows, We Buy!

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By Motorhead Mark Lester

By the end of the 2009 snowmobile season, the worldwide economic meltdown had pretty much played havoc with the economies of both the US and Canada. To say the motorcycle, ATV and marine businesses had a tough start this year is just not true. These recreational products had a terrible start.

So what’s the good news? This past April the snowmobile business finished off the 2009 sales season with impressive results. While sales were not up, they were down only incrementally. In comparison to other segments in the Powersports business, the snowmobile business looked heroic.

This is doubly interesting when you realize the sno-mo-biz was the darling of the powersport business up until the late 1990s. By the turn of this decade, ATVs had overtaken snowmobiles lofty position and had continued to enjoy incredible success and growth. Here we are a decade later and the big wheel’s gone around full circle.

However, let’s be careful before we dislocate our shoulders patting ourselves on the back. The entire retail marketplace has been under serious stress for over a year now and we need to recognize the problems dealers face with unsold motorcycles, ATVs and marine products. Stacked inventories of motorcycles, ATVs and boats are a huge burden at the dealer level.

Some are stretched financially and can’t afford to order more product because of limited credit. Other dealers are so cautious about the market they’re ordering light. We still need to recognize, even though sales of new sleds last year were remarkably strong in the poorest economy in over 30 years, the health of OEM dealer networks is foundational to a good snow sales season.

Last season’s strong sales of new snowmobiles graphically underscores the secret to this industry’s health. It’s our demographics. The motorcycle and ATV business are dominated by a younger age group and our research shows readers of our sister publication, All-Terrain Vehicle Magazine tend to be younger than readers of Supertrax.

Simply put, younger people were hit harder by the recession than readers in their forties and up. A higher percentage of snowmobilers have not lost their jobs, suffered from the sub-prime mortgage crisis in the US or lost their ability to borrow. This year there are more snowmobile customers with the ability to buy a new sled than there are motorcycle or ATV customers.

As magazine publishers, we’ve been around long enough to know the industry’s strengths and clearly, as we emerge from this current economic downturn, history appears to be repeating itself proving again the snowmobile marketplace is a solid place to do business.

The critical piece to this puzzle is weather. Again, we’ve seen this reality before – and we will see it again as the weather does what it does, despite “experts” claiming we’re heating up. By the way, we’re not heating up! Over 2500 accredited scientists around the world – and more join this number every month – are convinced worldwide warming is flat-out not happening.

You’ve no doubt noticed the past two winters have provided outstanding snow for the largest portion of the North American snowbelt. This most important ingredient, snow, is what gets wallets to open. One immutable fact is true: If the previous winter had plenty of snow, snowmobile sales go up.

In fact, the 10-year sales slide has ended with sled sales and usage is leveling and turning upward. It’s undeniable: When it snows, even marginal snowmobilers take the covers off, dust off the garage mold and use their sleds. When more snowmobilers are out riding, more new snowmobiles end up being sold. It’s statistical boiler plate and, at this point in history, it’s impressive to see how this axiom holds true in a tough economy.

Here’s what we think…it’ll snow. The snowmobilers we’ve been talking to are fed up with a dismal summer and are already looking forward to snowmobiling this winter. Sled sales will spike this fall as the current economic climate improves month by month.

Snowmobilers will get out and ride their sleds to escape the realities of work, economic negativity and the six o’clock news. You can count on it.

Supertrax Online
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