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Business Management

Winter Wholesale Prices Remain Low

Now’s the Time to Stock for Spring

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The powersports market is in a major winter slowdown. Activity at the auctions continues to be light. Prices are still soft, with lower than normal volumes of units being offered for sale. Much of the reduction in volume is a function of reduced new unit sales since the recession started in late 2008. The remaining drop in auction volume is due to having significantly fewer repossessions.

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The loans originated over the past two years of this struggling economy were solid in both borrower credit strength and collateral levels. Where normally we would expect to see higher prices when inventory is scarce, instead we are seeing lower than normal pricing as we head into winter.

Snowmobiles are up once again this month, but reflecting the general softness of the market as a whole, are up less than last month, averaging only a percent or so increase. As we state frequently, the prices we report are national averages, and you need to adjust for your local market depending on factors like geography, local interests, economic conditions and weather when deciding how much to pay for a particular unit.

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Personal watercraft and jet boats are down quite significantly, with decreases ranging from 3 to 6 percent depending on the type of unit and age.

The three segments that showed some pricing strength last month — ATVs, utility vehicles, and sport bikes — are also down this month.

On a positive note, now is the time of year that many dealers start to stock up on inventory in anticipation of spring motorcycle sales, when warm weather returns. This normally leads to rising wholesale prices over the next few months. Stay tuned, and we will let you know if/and when that occurs, and by how much prices change going forward.

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