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Mild Winter Wreaks Havoc

Mild Winter Wreaks Havoc. The 2015–2016 snowmobiling season was plagued by a lack of snow, which resulted in a 15.8% decrease in worldwide snowmobile sales, to 126,972, and a 3.9% decrease in US sales to 56,006 from the previous season’s 58,299.

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Mild Winter Wreaks Havoc

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  1. Mild Winter Wreaks Havoc • The 2015–2016 snowmobiling season was plagued by a lack of snow, which resulted in a 15.8% decrease in worldwide snowmobile sales, to 126,972, and a 3.9% decrease in US sales to 56,006 from the previous season’s 58,299. • Of the top 4 US states for snowmobile registrations (3 with 200,000+ and 1 with 100,000+), only Minnesota had an increase, but a mere 0.01%. Wisconsin, with the most registrations, had an 8.2% decrease; Michigan, -4.6%; and New York, -24.5%. • Eight states had increased registrations – Alaska, Colorado, Idaho, Nebraska, Ohio, Utah, Washington and Wyoming – with Alaska’s the most significant, at +21.4%, as it is the only state of these 8 with more than 50,000 registrations.

  2. Canada’s Bare Runners • The International Snowmobile Manufacturers Association also reported in its 2016 Snowmobiling Fact Book that Canadian sales during the 2015–2016 season declined 24.5% to 44,431 units, compared to the previous season’s 50,752. • Of the 3 provinces with the most snowmobile registrations, the declines in Quebec, -1.0%, and Ontario, -2.5%, were much less; and Alberta recorded an incredible 125% increase in registrations. • Five of the other 10 provinces had decreased snowmobile registrations; 4 had increases, with the largest in Saskatchewan, +83.7%, and Nunavut, +4,741; and 1 (New Brunswick), no change from the previous season.

  3. Dealers Buried in an Inventory Blizzard • With Q4 2015 sales significantly weak, many dealers are carrying large inventories of 2016 models, which is why some of them suggested a radical strategy: manufacturers shouldn’t even introduce 2017 models. • Given their Q4 2015 experience, it is understandable why 80% of the dealers who responded to the Powersports Business/RBC Capital Markets survey expected an additional decrease in snowmobile sales during calendar 2016. • With a potentially colder and snowier 2016–2017 winter (see page 3), dealers may experience a sales rebound, which will also generate more equipment, apparel, accessories, parts and service sales.

  4. Snowmobile Manufacturers’ Ups and Downs • Of the 4 major snowmobile manufacturers, Arctic Cat reported a 42% increase in snowmobile sales for its fiscal Q4 2016, ending March 31, 2016; however, sales declined 30.4% during its next fiscal quarter (Q1 2017, ending June 30, 2016). • BRP includes snowmobile sales in its Seasonal Products division, which recorded a 5.8% sales increase during fiscal Q1 2016, ending April 30, 2016. BRP reported the highest North American market share in Ski-Doo snowmobile retail sales. • Snowmobile sales at Polaris Industries during its fiscal Q1 2016, ending March 31, 2016, increased just 2%, compared to fiscal Q1 2015.

  5. Wary Weather Watchers • According to forecasts for winter 2016–2017, the El Niño pattern is expected to become a low-grade La Niña, which is likely to bring heavier snow to the Pacific Northwest, northern Intermountain West, Great Lakes and possibly areas of the Northeast. • The Old Farmers’ Almanac is predicting colder than normal temperatures and near-normal snowfall in the Northeast. The snowiest periods in the Rockies will be late November, early and mid-December and mid-January. • The Canadian Farmers’ Almanac forecast is for a very cold winter, especially in Ontario, Quebec and the Maritime Provinces. Alberta, Saskatchewan, Manitoba and the far north will receive average snowfall while British Columbia will be stormy and mild.

  6. Advertising Strategies • Dealers can generate traffic and sales with an “Upgrade Your New Sled/Half Off Accessory” promotion: when a customer buys an upgrade for a new snowmobile at full price, he or she will qualify for half off for a single item selected from a choice of accessories. • Consider a “Don’t Wait for the Snow” promotion. The day local meteorologists predict an impending snowfall of at least 6 inches offer the deepest discount of the promotion, and then decrease the discount every day until the day of the 6-inch snowfall. • Co-market a “Membership Drive” weekend with the local snowmobile club(s). Anyone joining the club during the weekend at the dealership will receive a special discount that can be applied to a new snowmobile purchase during the season or an accessory bundle.

  7. New Media Strategies • Dealers can add a social media dimension to the “Don’t Wait for the Snow” promotion by posting hourly photos or videos of them measuring the snow in front of the dealership and telling consumers they still have time for the last discount. • Promote a “Trail Ride Scavenger Hunt,” creating special markers or actual items participants must find and photograph with their phones and upload to social media. Participants receive an accessories coupon and the winner a weekend snowmobile trip. • Promote a snowmobile outfit photo contest that could be the scariest-looking outfit, most colorful, etc. Invite everyone to vote for the best, with dealer T-shirts for all participants and a special prize for the winner.

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