Tag Archive | "Powersports"

Build Your Agency With Powersports


2016 marks the end of an uptick cycle with vehicle sales in the retail automotive market. This year, we can expect vehicle sales to slow down and plateau. Combined with increased regulatory pressure, 2016 will be a year in which many agents will need to stretch their capabilities and their market base as they prepare for potential economic challenges in the years to come.

The good news is that new opportunities are not out of reach. In fact, there is an often overlooked opportunity for agents seeking to expand their business volume, as well as increase their footprint in the marketplace, in the powersports industry.

Revving Up Product Sales

Now, it is understandable that discerning agents might be concerned with branching into a market they know little about. However, given that the powersports industry is still in the early stages of F&I development, agents might find that they know more than they give themselves credit for.

Your knowledge, particularly in the F&I space, can have immediate and dramatic impact on powersports sales and profitability. Most powersports dealers do not fully understand the F&I process, how to implement a strong F&I department or how to measure its success. Strong agents who have worked with dealers in this area have a wealth of knowledge to provide immediate benefits. This makes the agent value proposition that much larger and more tangible in the powersports space.

Beyond the potential ease of differentiating their services in the powersports market, agents with automotive industry experience may not realize that there is actually a shorter sales cycle and faster revenue opportunity in the powersports space. Think of it this way: You can spend 18 months going after one new-car dealership, all the while competing with 50 administrators. Or you can acquire several powersports dealer partners in that same time period with only seven competitors. That’s right, seven.

So what does it take to make the leap into this brave new world? When contemplating expanding into the powersports market agents need to take the following steps:

  1. Change your mindset from working in a “need to have” industry to a “want to have” industry,
  2. Do your research and
  3. Apply what you’ve learned in auto to the powersports space.

It seems simple when put on paper, but taking the time to really delve into these three steps can go a long way toward ensuring success in the powersports market.

Step 1: Mindset

One of the biggest learning curves for any agent will be operating in a space where the vehicle purchase is a “want to have” rather than a “need to have.” Most powersports owners buy motorcycles and four-wheelers for leisure activities, not for their daily commute. This means that, while powersports demand might be high, the number of people willing to invest in the purchase of a powersports vehicle tends to filter down to those who can afford both a car payment and a motorcycle payment, along with the required insurance payments.

Typically, powersports enthusiasts, who still have to put food on the table, will focus on paying off their car or truck before making a powersports purchase. This filter is the industry’s biggest challenge right now, especially with the rising price tag of new powersports vehicles.

That is not so say that powersports consumers are not heavily invested in their ride. In fact, powersports owners often show more care and concern for their motorcycle than their car. They tend to see the bike as more of an extension of their personality, whereas the car just gets them from one place to another. And as the economy grows, we can expect more powersports enthusiasts returning to dealerships to make a purchase, meaning there will be more opportunity for dealers to increase their profitability and for agents to expand their footprint in the space.

In addition, in this want vs. need space, many powersports dealers extend their thinking beyond pure profitability metrics to the brands they choose to sell. While they can be just as strategic and sophisticated as an automotive dealer, powersports dealers can often base decisions on emotion as much as logic. For example, a staunch Harley-Davidson dealer who is heavily invested in the Harley brand is much less likely to open an Indian store than a Ford dealer is to open a Honda franchise.

Beyond the fierce competition and sense of stewardship between brands, powersports dealers are highly sensitive to being compared to the automotive space. The last thing they want to hear is how they are less sophisticated or versatile than their automotive brothers. This means that while agents can provide powersports dealers with quite a bit of knowledge gleaned from the automotive space, they have to be very careful in how they broach the subject.

In essence, both consumers and dealers operate in a sense of “want to have.” A good comparison to this mindset is the luxury vehicle market. Their purchase decisions are not based on getting from Point A to Point B, but rather on how the vehicle reflects their personality.

Likewise, highline dealers take their sense of brand stewardship seriously, which is reflected in the level of customer service they provide and expect from their agent partners. They believe in the benefits of the luxury brands and shape their dealerships to further cement in customers’ minds that buying from their dealerships comes with a care and attention to detail they cannot get anywhere else.

Powersports dealers operate in the same fashion. They take pride and ownership in the brands they chose to sell and they take care to ensure excellent customer service within a tight-knit community where word spreads fast. In turn, they need the same level of service from their agent partners.

Step 2: Research

Just like in retail automotive, it is important that agents perform their due diligence by researching the dealerships they want to pursue as well as their competitive landscape. They need to perform the groundwork to investigate each dealer’s current provider. It is also a good visual aid to develop a report card, providing a comparative analysis of the current provider’s services. Find out if they provide training, rate comparisons andprocess development, for example.

Be a problem solver. Most agents are probably already used to this when maintaining their relationships with dealer partners. However, it is just as important to research areas dealers can improve upon and provide insight before active engagement, especially in the powersports space. Taking this one extra step can put a strategic agent miles ahead in winning dealer business. You will demonstrate a level of service most powersports dealers are unaccustomed to — but would take advantage of in a heartbeat.

A strong presentation should include:

  • An online and in-person mystery shop,
  • A comprehensive website and online inventory review,
  • Online reputation assessment,
  • Demographics and surrounding area overview and
  • A comparison with the target dealer’s competition.

Lastly, it is important to look at each dealer’s inventory and compare it to the coverage offered by their current provider. Often, anywhere from 40% to 50% of their inventory does not qualify for coverage from most powersports providers, which means there is ample opportunity for a strategic and forward-thinking agent to earn their business with one of the few providers that maintains expanded coverage levels.

With this research in hand, you should be well-prepared to present dealers with something interesting — or at least a new perspective on their dealership operations. The powersports dealership personnel should be more intrigued and interested in how an agent can make them more successful.

Step 3: Application

Agents already accustomed to fierce competition in retail have the potential to easily win powersports dealers by maintaining the level of service they already know how to provide. You do not need to be timid about branching into a new market as long as you trust and use the processes you have relied upon for so long to build relationships and increase a dealer’s reliance on the agent model.

In fact, agent success in the powersports space relies more on understanding F&I than on understanding the space itself. Agents positioning themselves as F&I specialists and helping dealerships implement successful and compliant F&I programs have ample opportunity to materially grow their footprint at a faster pace in this space.

Remember, just like in retail automotive, providing a constant flow of solutions that keep dealers thinking about increasing market share and profitability deepens and strengthens your overall relationship with your dealers. Agents looking to make the transition into the powersports space will also need to look to partner with a solution provider that understands and can support and help execute their powersports strategy.

Providers that already operate in the space often have a better understanding of the products and services most dealers find beneficial, as well as a strong ability to cultivate relationships and make introductions, giving agents a resource to lean on to ensure successful market expansion.

Because the powersports space has so little agent competition, you’d be surprised how much more effective agents can be. Dealers in this space are not used to someone outside the dealership being invested in their success. By building a relationship with them, understanding their objectives and hurdles and educating dealers on the intricacies of F&I, agents can provide an immediate and exponential impact on their business. Remember, this all stems from adjusting your mindset, doing the homework and research on each prospect and determining how to apply lessons learned from automotive retail.

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EFG Companies Powersports Research Reveals New Motorcycle Dealer Profit Opportunity


DALLAS – EFG Companies revealed key market insights to drive dealership profitability through a third-party research survey of 1,000 consumers who purchased a pre-owned motorcycle within the last 24 months on their perceptions surrounding Certified Pre-Owned programs.

Key Findings:

95% said the availability of a CPO program would impact the dealer from which they purchased their motorcycle.

85% of respondents said they would find a complimentary CPO valuable as a benefit provided by the dealer.

Survey respondents placed a high dollar value on the complimentary program benefit – 63% valued the program between $500 – $1,000.

56% of survey respondents would drive over 30 miles, and 33% would drive over 50 miles to buy a motorcycle that included a complimentary CPO package.

71% of respondents had familiarity with CPO programs due to past purchases of cars and trucks.

65% of those respondents said the CPO program made a difference in their past purchasing decision.

Top 3 factors in deciding which bike to purchase:

  • Price
  • Condition of bike
  • Bike mileage

About the Respondents:

2016 nationwide survey of 1,000 consumers who purchased a pre-owned motorcycle within the last 24 months

51% of respondents purchased their motorcycle directly from a dealership.

59% of the respondents paid cash for their motorcycle.

7% of respondents financed through the dealership to purchase for their motorcycle.

3% of respondents financed through an outside lender to purchase their motorcycle.

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F&I Administration Welcomes Aegis Powersports to SCS Auto Platform


CHICAGO – F&I Administration Solutions LLC (F&I Admin), North America’s leading provider of software solutions for the administration of automotive F&I products, has announced that Aegis Powersports will utilize F&I Admin’s SCS Auto platform for the administration of its F&I products.

Aegis Powersports was launched in December 2014 as a division of Aegis Specialty Insurance Services, an innovative Silicon Valley-based provider of dealer F&I and personal lines insurance products. Aegis specializes in protection products for dealers who sell motorcycles, dirt bikes, ATVs and personal watercraft.

“F&I Admin and the SCS Auto platform were an easy choice for us,” said Jeff Kenny, vice president of dealer products for Aegis Specialty Insurance Services. “Powersports gives us the opportunity to diversify our offerings, and F&I Admin gives us the confidence to enter this market knowing our product administration and customer service needs will be met.”

“We have built a presence in the Powersports segment through a few of our current customers and our system delivers on its unique set of requirements,” said David Trinder, CEO of F&I Admin. “We look forward to providing Aegis with the tools it needs to succeed and prosper in their new venture.”

 

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Service Group Partners With Kawasaki


AUSTIN, Texas — Service Group has partnered with Kawasaki Motors Corp. U.S.A. to provide comprehensive extended coverage on new and used powersports units sold at Kawasaki dealerships throughout the United States.

Service Group will be the administrator for the new GAP, tire-and-wheel and prepaid maintenance products being offered alongside Kawasaki’s rebranded factory coverage, Kawasaki Protection Plus.

To enhance its current product offerings for non-Kawasaki units, Service Group will also administer GAP, tire-and-wheel, prepaid maintenance, and extended service agreements in a new product called Preferred Protection Plus.

“We think the alignment of our company values, culture, and products will lead to a great long-term partnership,” said Martin Jenns, president of the Service Group, of the new partnership.

More than 400 Kawasaki dealerships are currently selling the new products.

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Harley-Davidson Buoyed by Strong Overseas Sales


Via The Wall Street Journal

A harsh winter didn’t blow Harley-Davidson Inc. off the road.

The Milwaukee-based maker of motorcycles reported a 19% rise in first quarter profit, even though bad weather in the eastern two-thirds of the U.S. reduced traffic at dealerships. Retail sales of Harley motorcycles in the home market were up 3% from a year earlier.

Retail sales of the company’s products outside the U.S. jumped 11%. In the Asian-Pacific region, growth was nearly 21%. The company cited strong sales in Japan, where buyers rushed in ahead of a consumption tax increase that took effect April 1. Harley said sales in Europe were helped by mild weather. Sales were strong across most of Europe but weak in Spain, company officials said.

Harley shares jumped 6.7% to $72.02 in recent New York Stock Exchange trading as analysts said the results were well ahead of expectations and new models appeared to be selling well. “We think the new bikes are working for Harley,” said Craig Kennison, an analyst at Robert W. Baird & Co.

Net income was $265.9 million, or $1.21 per share, up from $224.1 million, or 99 cents a share, a year earlier. Analysts had expected earnings of about $1.08 for the latest quarter. Revenue, including motorcycles and financing services, grew 9.9% to $1.73 billion.

Operating income from the Harley-Davidson Financial Services, which finances sales of motorcycles, fell 12% to $63.2 million. The company said it increased provisions for credit losses as the resale value of repossessed motorcycles declined and loan losses ticked up. A Harley spokesman said the loan loss provision rose to $114.5 million as of March 31 from $106.8 million a year earlier.

“We believe the overall loan portfolio is solid,” said Larry Hund, president of the financial services unit. He said between 75% and 80% of new motorcycle loans in the quarter were considered prime or highly qualified borrowers.

Harley’s accounts receivable jumped 25% from a year earlier to $325 million. The company cited higher shipments to overseas dealers, fluctuations in foreign currencies and more generous terms for customers in Brazil.

Harley said its share of the U.S. market for motorcycles with engines of 601 cubic centimeters or greater was 56% in the latest quarter, down slightly from 56.1% a year earlier. The company’s rivals include Japan’s Honda Motor Co. and Kawasaki Heavy Industries Inc. as well as Germany’s BMW AG and Polaris Industries Inc., based in Medina, Minn.

Harley officials said U.S. sales were hurt by a temporary halt to production of the company’s Road Glide models, which are being redesigned. Road Glides are popular among many riders who take long trips. The company declined to say how soon new models will be reintroduced. Harley also faces tougher competition from Polaris, which last year reintroduced the Indian brand.

Harley said it should benefit from two new models, the Low Rider and the SuperLow 1200T.

Harley projected capital spending of between $215 million and $235 million this year, up from $208.3 million in 2013.

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instaVIN Launches New Powersports Program for Dealers


SAN DIEGO – instaVIN launched the instaVIN Certified Pre-Owned PowerSports program, designed to help PowerSports dealers attract and retain customers for used motorcycles, ATVs, watercraft, snowmobiles and RVs. Dealers can sign up on the instaVIN Web site (www.instaVIN.com); it is administered by NAC and backed by an A rated insurance carrier with more than $26 billion in assets.

CPO programs are a well-established part of the used car industry, and now PowerSports dealers can enjoy the same benefits. Certified cars and trucks will typically sell for 10% – 15% more than a vehicle that is sold “as is”, and sell faster. Consumers prefer them over the non-certified counterparts. The instaVIN Certified PowerSports program enables all dealers to certify both their franchised nameplates and off-makes for nearly every make and model of motorcycle, ATV, watercraft, snowmobile and RV and consists of three parts:

• Current instaVIN Vehicle History and Title report (when available)
• Up to 99 point vehicle inspection
• Up to 12-month limited warranty for each vehicle

Once the dealer chooses to certify a vehicle, a certification package is purchased from instaVIN, which allows the dealer to run an instaVIN Vehicle History and Title report to check for negative title brands and similar events. Assuming all is clear with the report, the dealer either performs a vehicle inspection according to the certification standards, or orders an independent inspection through instaVIN.

After passing inspection, the vehicle is registered with instaVIN and a limited warranty is issued of up to 12 months, depending on vehicle type. Following registration, the dealer has access to a free copy of the comprehensive CPO report they can provide to their customer to validate the warranty, including the instaVIN Vehicle History information and complete inspection reports.

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