While much of the North American economy slowed to a crawl after COVID-19 shutdowns in 2020, the powersports industry posted significant growth. Many people, weary of staying at home, found a cure for cabin fever while riding an off-road vehicle or experiencing socially distant spaces on trails. By all indications, the sales increase in powersports equipment has been one of the few bright spots in an otherwise grim COVID-19 economy.
According to Jeremy Jansen, senior vice president of Wells Fargo Commercial Banking’s distribution financing business, “What started out as a slight uptick has just taken off to record sales levels,” he said. “Dirt bikes, ATVs, side by sides, personal transport vehicles — everything in the book is retailing well above prior year.” After plummeting briefly in mid-March amid the initial shutdown, powersports sales skyrocketed in the ensuing months.
The unexpected surge in demand created challenges for Polaris Industries, Minneapolis, a leader in several of the powersports segments, as it worked to evaluate, finance, and stock inventories at dealerships across the U.S. and other countries. “During the pandemic, there’s been a strong trend of people spending their money on powersports vehicles, instead of airline tickets and cruises,” said Mike Speetzen, chief financial officer of Polaris. “It’s all about families looking for a safe way to do things together outside, and our vehicles allow them to do that.”
Retail sales in some segments could have been stronger if the inventory had been available. Some manufacturers have missed selling units while factories were shut down.
According to a chart furnished by Motorcycle Power News, one gauge of the strength of the industry is an increase of prices, especially significant as some segments are getting to the end of their season. Prices normally taper off significantly this time of the year. Unexpectedly, nearly every segment is increasing in value in unison, which almost never happens.
Some highlights:
- Retail sales from CDK Lightspeed shows same store unit sales up nearly 24% for July 2020 versus July 2019.
- The Motorcycle Industry Council reports that new off-road motorcycle sales were up over 50% for the first half of 2020 versus 2019. Scooter sales rose 6.4% for the same period.
- BMO Capital’s Bombardier financial results report: off-road vehicle sales up over 60% in the second quarter, personal watercraft sales up over 20%.
- According to Auto Finance News, BMO Capital Markets reports that boat sales increased 25% year over year for the most recent reporting period.
- Bombardier reported their powersports sales increased by 40% for the May-July period in North America.
- Ever since the 2008 Recession, powersports has struggled to get back to 2008 sales levels. COVID-19 may have given the industry new customers it has been seeking since 2008. Hopefully, the sales increase is not a one-time surge related to people needing to get out of the house and needing social distancing. My general feeling is the new customers are here to stay. PSR
Michael Aistrup is a Senior Analyst at Power Systems Research
