Powersports Equipment Manufacturers NAICS 336999

Apr 21, 2025 - Growth Challenge Expected from Tariffs

• Newly imposed tariffs by the Trump administration are expected to bring significant challenges to powersports equipment manufacturers, according to an analysis in PowerSports Business. The US government has imposed a 25% tariff on imported automobiles, which includes motorcycles, off-road vehicles, and components, beginning in April. “Manufacturers relying on global supply chains will face higher production expenses, which are likely to be passed down to dealers and, ultimately, consumers. This escalation in prices could result in decreased sales volumes as consumers reassess their purchasing decisions in light of higher costs,” according to the report.
• The US powersports equipment manufacturers industry is projected to grow at a CAGR of 2.21% between 2025 and 2029, slower than the overall economy's anticipated growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The forecast noted that a tighter immigration policy could limit the expansion of the labor supply and job growth for durable goods manufacturing industries. A factor that may limit consumer spending is higher tariffs on consumer goods. On a positive note, lower inflation supports a moderate increase of real disposable income by about 2% in 2025 and 1.9% in 2026. However, real income could suffer to an extent if average prices rise due to tariff implementation.

• A new report in Auto Finance News estimates that approximately 400 powersports dealerships are likely to close in 2025. The closures will be driven by weakened demand and elevated new-vehicle inventory. According to Mark Sheffield, board adviser for the National Powersports Dealer Association, “This is going to be a tough year for the powersports industry, and we’re going to see a lot of the weaker players go away.” Powersports manufacturers may find less retail coverage in the upcoming year, which could result in lower sales.
• Powersports equipment demand may be affected by falling consumer confidence, with levels declining 7.2 points to 92.9 in March 2025 month over month, according to the Consumer Confidence Index from the Conference Board. Stephanie Guichard, Senior Economist of Global Indicators at The Conference Board, noted that the segment driving March’s decline was consumers over 55 years old, and the decline spanned all income groups with the exception being households earning over $125,000. Per Guichard, “Consumer confidence declined for a fourth consecutive month in March, falling below the relatively narrow range that had prevailed since 2022.” Purchasing plans for homes and new cars declined while big-ticket purchases rose on a six-month moving average basis, which may reflect plans to purchase certain items before impending tariffs lead to price increases.