Motorcycle Dealers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 5,900 motorcycle dealers in the US sell new and used motorcycles plus other powersport vehicles. In addition to motorcycles, products sold include motor scooters, motorbikes, mopeds, all-terrain vehicles (ATVs), and personal watercraft. Companies typically sell replacement parts or accessories and offer repair services. Some companies offer maintenance programs.

Dependence on Motorcycle Manufacturers

Dealers rely on a limited number of manufacturers to develop compelling new products that customers will buy.

High Capital Requirement

The ability to secure floor plan financing is critical to funding inventory purchases.

Industry size & Structure

A typical motorcycle dealer operates out of a single location, employs less than 20 workers, and generates $4-5 million annually.

    • The motorcycle dealer industry consists of about 5,900 companies, employs 69,400 workers, and generates over $28 billion annually.
    • The industry is fragmented - the top 50 companies account for just 17% of sales.
    • The largest dealers operate "superstores", which stock a wide range of products and serve an extended geographical market. The largest Harley-Davidson dealers can generate more than $50 million annually.
                            Industry Forecast
                            Motorcycle Dealers Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Nov 17, 2023 - Sales, Employment Up
                            • Industry sales for motor vehicles and parts dealers, including motorcycle dealers, have continued to rise in mid-Q3 2023 and are trending higher than in 2022. Consumer spending has increased modestly during the same period. Employment levels for motorcycle, boat, and other vehicle dealers have fallen in Q3 but are tracking higher than the same period in 2022. Employment costs have also dipped in Q3 as wages declined on a month-to-month basis while trending slightly higher than in 2022.
                            • The latest Consumer Price Index (CPI) report showed inflation cooling in October 2023 compared to a year ago, according to the Wall Street Journal. The overall CPI was 3.2% in October 2023 and did not change from the previous month. The core CPI, which excludes food and energy costs, was 4%, up 0.2% in October. The core index reflects a slower pace than the two prior months, as prices have eased for housing, vehicles, and airfares. The latest report shows progress in lowering the inflation rate with room for improvement; inflation remains above the Federal Reserve’s 2% target.
                            • The latest forecast from EFG Companies shows some potential revenue barriers for retail automotive and powersports industries in the second half of 2023, according to Motorcycle Powersports News (MPN). Price concerns, inflation, and slow inventory growth could contribute to lower sales in the second half of the year. On the positive side, consumer demand has remained strong for the first half of 2023, but cash-strapped consumers must overcome high prices and higher interest rates to purchase. Dealers are also seeing fewer manufacturer incentives, resulting in shrinking back-end profit margins. The forecast recommended that dealers focus on customer-first sales methods and employee training to improve effectiveness and retention.
                            • Harley-Davidson ranked first in a recent study of the ease of making a service appointment at a dealer, according to Motorcycle & Powersports News. The Pied Piper 2023 PSI Service Telephone Effectiveness (STE) Study measured 26 powersports brands on the efficiency and quality of service telephone calls from a customer’s objective of setting up a service appointment. Other high-scoring brands were Polaris Off-Road, BMW, and Indian Motorcycle. According to Fran O’Hagan, Pied Piper CEO, “Powersports customers soon decide whether their service experience is a reason to keep their product or get rid of it. Customers who find scheduling a service appointment difficult vote with their feet by moving to another dealership or independent shop, or postponing service.” A quarter of the study’s customers could quickly accomplish their objective, 7% of dealerships exceeded customer expectations with their service, and 11% of study customers hung up after failing to schedule service.
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