August and September traditionally mark the bottom of the wholesale market as dealers wind down their selling season and new models are introduced. This year is right on track with the norm as Average Wholesale Prices (AWP) fell once again in August from the prior three-month average. Cruisers fell ~6% from the prior three months, sport bikes fell 1%, MX bikes and side-by-sides fell 3%, while ATVs actually rose 1%. Compared to last year, on-road AWP fell slightly and off-road was generally up, with most differences due to an older mix than last year.
Slightly Older Product Mix
The average model age of wholesale units rose over last year and the prior three-month average to nearly 6.5 years overall. Domestic cruiser ages rose only slightly, while the average age of metric cruisers rose to almost one year older than last year. This is evident in the Price/Book ratio of AWP vs. NADA Clean Wholesale, which is up slightly over last year for all but the sport bike and MX categories. In general, prices were down from last year primarily due to older product, but Price/Book was actually up due to the continued strength of pre-owned.
August Volume Declined
August volume fell notably from July due to the shorter time between auctions leading into August. Reduced volumes in August did not have much impact on AWP and odds are that higher volumes in September won’t have much impact either. Less popular and slow-moving product will experience significantly more price pressure than clean, low-mileage units.
Prices often vary between locations due to variations in product mix, but the differences in August were more significant and appeared related to larger differences in regional markets. Much like the weather, this variability – which is more common in June than August – is like the wind blowing in different directions as the weather changes. Given how well 2017 has followed normal trends and how popular pre-owned units are with consumers, this variability will be temporary as value buyers take advantage of the opportunity.
All data provided by National Powersport Auctions. For more information, please visit www.npauctions.com.