Values for warm-weather powersports products declined month over month in September, pointing to a potential period of normal seasonality following months of volatility.
Values for jet boat and watercraft segments each fell 4.8% MoM in September. Off-road and utility values also declined 2.8% and 4.5% MoM, respectively, according to data from Black Book.
Powersports values have been volatile for the past few months: September’s declines follow August increases in nearly every segment on the heels of two straight months of declines in July and June.
Meanwhile, snowmobile values increased 0.1% MoM in September and should continue rising for the next several months in line with typical seasonal demand.
“We’ve definitely been seeing the [powersports] market cooling right now,” Eric Lawrence, principal analyst at Black Book, told Auto Finance News, noting that seasonality and demand are driving factors. “The market’s been really hot for a long time. We might be getting to the point where demand is leveling off with supply, which creates a more traditional market.”
Despite the decrease in September, powersport pricing is still above historical levels and expected to remain elevated into 2022. It’s possible, Lawrence said, values for products that typically slow this time of year will again jump in the coming months due to the “volatile” nature of the powersports market.
“It’s a very erratic market right now,” Lawrence said, noting widespread shipping delays are exacerbating already tight supply levels. “There are a lot of things going on that the market has no control over, which can cause short-term fluctuations we don’t expect.”
Dealerships also continue to struggle to find inventory to meet ongoing demand as the chip shortage hampers deliveries of new units. With supply sitting at 30 days compared to the pre-COVID industry norm of 90 to 120 days, some powersports dealers have turned to preorders, with many seeing an increase in consumer deposits compared to before the pandemic, according to Black Book.
Even for watercraft products, consumers are posting orders for delivery months down the road, Lawrence added. “We’re definitely seeing demand on the new side still, but you’re still going to have seasonality,” he said.
Powersports Finance Summit, the premier recreational vehicle finance event, returns October 26 in Las Vegas. The Summit is the only full-length forum for those companies involved in the financing of motorcycles, jet skis, side-by-sides, and other specialty vehicles. To learn more about the 2021 event and register, visit www.PowersportsFinance.com.