The powersports market has held strong this year as spring comes to a close. This time last year we saw the seasonal decline in Average Wholesale Price (AWP) begin in May across the majority of product categories, with an abrupt drop in all categories last June. Through May of this year only three out of the nine categories we measure have declined over the previous month. What is causing this relative stability?
We believe several factors are at play. Perhaps the most significant is the late but temperate spring this year; some regions of the country have only been selling for a few weeks, but the appetite for product is strong. A secondary reason is the continuation of historically low default rates. Although auctions do not solely depend on repossessions for inventory, low defaults contribute to a less plentiful supply of wholesale product.
The classic combination of stronger demand and suppressed supply, especially for off-road product, explains this year’s stronger pricing. We are pleased to see signs of stronger retail demand for our dealers and continue to expect a more gradual seasonal curve than previous years.
May’s AWP pricing showed fluctuations in most categories vs. 2013. The AWP for the domestic cruiser category was the most consistent with average trends, with only a two percent decrease compared to 2013. Metric cruiser and sport AWP actually strengthened in May vs. April, opposite most year’s trends, likely due to fluctuations in product mix and dealers needing to restock after warmer spring weather sales.
The AWP for all types of ATVs remained stronger in May over last year with a four percent increase, while MX vehicles stayed unusually strong due to limited supply at auction with an 11 percent increase.
All data provided by National Powersport Auctions. For more information, please visit www.npauctions.com or call 888.292.5339.
