Connect with us
Close Sidebar Panel Open Sidebar Panel

Business Management

Summer ‘Softness’ Began in June

The Summer season for Average Wholesale Prices (AWP) officially began in June.

Advertisement

NPA_1[dropcap]T[/dropcap]he Summer season for Average Wholesale Prices (AWP) officially began in June. Last year’s summer softness began closer to July, but weather and a softer retail month in May translated into reduced expectations for powersports inventory and pricing in June. All major categories declined from the prior three-month average, with Metric Cruisers down 6.9%, Domestic Cruisers down 3.5%, and Off-Road categories down 1-3%. Dual Sport bikes saw a rise in AWP due to a higher-price mix of units than usual. Wholesale prices also remained below last June’s levels for Street categories, while Off-Road was flat to up over last year.

Click Here to Read More
Advertisement

From a seasonal perspective, AWP continues to track very closely to the five-year norm. This is encouraging since the market is behaving in a normal, rational way. This is also true for the seasonal comparison to NADA clean wholesale values as the market this year continues to follow the typical trend. In June, this translated to a 4-5% drop in the ratio of AWP to the latest NADA values published in May.

Total auction volume sold in June declined significantly from May. May was a stronger than usual month for volumes, making for a high comparison while June produced fewer units than the average. This is true for auction units from both dealers and lender repos, though repo volumes continue to outpace last year.

Advertisement

As we discussed in our April and May market reports, taking trades with summer auction values in mind is a strategy that will pay off for dealers that used it. There are still plenty of buyers for auction inventory, so dealers needing to liquidate will be able to do so effectively if it’s priced appropriately. The financial benefits of inventory turns still outweigh trying to time the market. AWP will likely shift another 5-8% points across most categories as summer plays out and new models are introduced, with cleaner, low-mileage units outperforming rougher, high-mileage units. This will provide buying opportunities for dealers needing inventory, especially for units that qualify for financing or CPO programs that are attractive to summertime consumers.

Advertisement
Click to comment
Connect
Motorcycle & Powersports News