Seasonal Wind Down
August typically denotes the “end of summer,” with kids heading back to school and the promise of cooler fall temps around the corner. For powersports retail sales and wholesale values, August through October is typically the most difficult 90 days on the calendar. With the selling season in the rearview mirror, dealer priority moves from inventory acquisition to product liquidation and pushing existing inventory out the door as quickly as possible. With new product releases on the horizon, incentive activity also kicks into high gear, causing downward pressure on used values. Average wholesale prices (AWPs) usually find their annual “bottom” in these three months.
August Results
While AWPs in August followed typical seasonal behavior, additional softening existed in many categories above and beyond what we would consider normal. Domestic Cruisers saw the most significant drop, falling about 7% versus the prior 90 days and 13% versus 2023. Despite moving in opposite directions, Metric Cruiser and Metric Sport continued to produce elevated values versus 2019. While Metric Sport AWP fell versus short- and long-term comps, demand remains strong for on-road Metric products. Off-highway AWPs produced mixed results versus the last three months, with ATVs beating the short-term comparable. Year-over-year comparisons on off-highway products produced similar results, but with Side-by-Side/UTV pricing outpacing last year by approximately 5%.
What to Expect
September is generally near the bottom of the pricing curve. Most categories find their “floor” in the last month of Q3. With continued challenges associated with interest rates, retail financing and dealers’ ongoing challenges with stagnant inventory, don’t expect much to change this year. Additionally, with darker economic clouds looming and the uncertainty about the elections still playing out in prime time, consumer confidence feels weak. Our advice remains unchanged: Focus on velocity and churn through inventory as quickly as possible. Despite the current new unit inventory bubble, pre-owned continues to drive margins, engage customers and keep stores profitable. Use all the NPA tools and educational seminars to inform, prepare and maintain your dealership through difficult stretches.
