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Business Management

July Average Wholesale Pricing in Review

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NPA_MarketReportJuly2016[dropcap]A[/dropcap]lthough pricing felt stable from June to July, Average Wholesale Price (AWP) fell in July across the board in powersports. Domestic Cruisers and Sport bikes experienced the largest decline, while other street and off-road categories were more modest. Compared to the prior three months, Sport bikes and Domestic Cruisers declined 11% and 14% respectively, Metric Cruisers declined 7%, ATVs were down 2-6%, and MX and Dual Sport rose 4% and 12% respectively due to product mix. Domestic Cruisers were impacted by a higher ratio of high-mileage units, whereas Sport bikes appear to have retreated from strong performance in prior months. Compared to last year, July prices followed similar downward seasonal trends but at lower levels due to older product mix.

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The average original MSRP for all non-OEM 2016 model year product sold through auction is at the highest level recorded so far. This is almost entirely due to the impact Side-by-Sides have had on average pricing, where newer, more expensive models are continually being introduced. In contrast, average original MSRP for 2016 Domestic Cruisers and Metric Cruisers is generally less than the same mix of 2015 models. Original MSRP for other categories is varied in model year 2016 units compared to prior years. This is helpful because the mix of units sold at auction indicates consumers need attractive MSRP price points to trade up or enter the sport.

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The wholesale powersports market continues to be a “normal” year in 2016. Prices began to decline in June and continued to soften at a modest pace in July. As OEMs introduce new models, incentives appear on prior models and dealers reduce inventory for the fall, we expect pricing to decline a few more percentage points in August and September and then remain fairly stable throughout fall. Ultimately, pre-owned vehicles are an ideal way to bring new consumers into powersports at price points they are comfortable with. The corresponding prices at auction help dealers stock up and turn the inventory they need. When lenders support pre-owned sales with more plentiful financing options and OEMs support the full ecosystem of their products, the industry will grow and pricing will follow suit.

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All data provided by National Powersport Auctions. For more information, please visit www.npauctions.com or call (888) 292-5339.

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