Summer Slide
It’s official – summer wholesale pricing has arrived. Average Wholesale Prices (AWP) declined for most major powersport product categories in June, right in line with typical seasonal behavior. Compared to the prior three months, domestic cruiser AWP declined 7%, metric cruisers declined 12%, sportbikes declined 2% and off-road was roughly flat except for ATVs, which declined 12%. Compared to last year, June prices were down for domestic and metric cruisers, flat for sportbikes, and flat to up for off-road.
Selection and Demand Softened
Part of the reason for the decline in prices is product selection, but the main reason is softening demand. With declining wholesale prices there was also a declining number of auction inventory views, signaling the peak retail season is now behind us. The typical summer slide is also visible in price/book ratios, which tend to tune out the effects of product selection. Average wholesale auction prices declined in June relative to NADA Clean Wholesale values, suggesting softer demand outweighed lower-value product mix. Nonetheless, clean, low mileage units still achieved strong values, while rougher, higher-mileage unit values declined notably.
MSRP Moderating
Powersports vehicles of all types and model years are sold through the auction, and the mix of units generally reflects the mix of units previously financed and traded in across the country. With 2017 half over, it appears that the average MSRP of current model year units may be moderating – after several years of steady increases in MSRP each model year, the mix of units sold at auction YTD suggest that the average MSRP for 2017 models may be heading back down. This can be a good thing, since greater affordability for new units can translate into higher new unit sales.
Used Remains Healthy
According to a recent NPA survey of over 600 powersports dealers, roughly 60% of new-vehicle dealers have sold one to three times as many used units as new units so far this year. Supporting and maintaining a healthy used market for their brands is good for new unit sales, so even though market indicators like wholesale prices, book ratios and website views softened in June, the data is right in line with what we would expect for a healthy market this time of year.
All data provided by National Powersport Auctions
