A summer came to an end, September Average Wholesale Prices (ASP) were mixed. In comparison to the prior 3-month average, Domestic Cruisers declined notably, Metric Cruisers and Sportbikes declined moderately and Off-Road products were flat to up.
Wholesale prices in September fared similarly but slightly better than last year, with Off-Road categories up nicely, Metric Cruiser and Sport off moderately, and Domestic Cruisers down significantly.
With the exception of Domestic Cruisers, most product categories continue to follow normal price trends for this time of year. In relation to the latest NADA Clean Wholesale values, wholesale price to book ratios were on par with seasonal trends, suggesting some variances were partially due to product mix.
Since Domestic Cruiser is typically the most normally behaved product category, we dug into why the decline was so significant in September to see if market forces or product mix were driving the downshift.
We found three primary drivers: 1) The average condition of units sold shifted downward, with the ratio of clean units declining nearly 20% for the month; 2) The average model age of units sold shifted upward 15% with a corresponding shift towards a lower-MSRP mix; 3) Demand declined for Dyna and Touring models, especially those with higher miles.
We do not believe the introduction of the new Milwaukee-Eight models has had much impact. Instead, dealers are adjusting inventory mix while banks and dealers liquidated older, rougher units during the month.
It’s normal for September wholesale pricing to be mixed as the market transitions from summer to fall and product mix shifts as new models hit the market, OEM incentives on prior models kick in, and dealers adjust inventory.
The auction environment offers the ideal mix of inventory and prices balanced by market forces. It also offers a unique reflection of what’s happening in retail. Dealers with a long winter season are liquidating excess inventory, while dealers with extra capital or flooring lines are looking to acquire right-priced units they can sell when the weather is right.
