More power sports industry bad news.

On top of BRP announcing major layoffs at Ski-Doo this week, it also appears that Arctic Cat and Textron have just pulled funding from several factory supported racing teams. Obviously this has raised concerns that Textron may be planning bigger changes at Cat like a sale of snow sports or even the whole powersports division. Or worse.

Polaris has also had issues with both slow sales and profitability.

Whether it’s on dirt or snow it appears the powersports industry is in major trouble. There have been a lot of concerns about the industry and what American makers will do in the face of government imposed 25% tax increases for imported parts.

We appear to be at a major crossroads. I wonder what we will see from the marine industry as we approach spring sales season?

TheFamousGrouse wrote:

On top of BRP announcing major layoffs at Ski-Doo this week, it also appears that Arctic Cat and Textron have just pulled funding from several factory supported racing teams. Obviously this has raised concerns that Textron may be planning bigger changes at Cat like a sale of snow sports or even the whole powersports division. Or worse.

Polaris has also had issues with both slow sales and profitability.

Whether it’s on dirt or snow it appears the powersports industry is in major trouble. There have been a lot of concerns about the industry and what American makers will do in the face of government imposed 25% tax increases for imported parts.

We appear to be at a major crossroads. I wonder what we will see from the marine industry as we approach spring sales season?

I wish I could find the article I saw shared on BookFace that discussed this a few weeks ago. The premise of the piece was that the market is fairly saturated with “nearly new” powersports products everything from dirtbikes, atvs, side by sides, boats, etc. following the covid chaos and that the potential for the tariffs will only drive up prices further, thus hurting sales of NEW toys.

People will always have the money to buy new stuff, but it’s increasingly likely that more average consumers will run what they have now versus buy new stuff with higher interest rates + prices jumping further amid tariffs.

The market is totally saturated, especially SXS. Anyone that wanted one bought them with their C-19 money. No need to get another or upgrade wit the ridiculous prices. Certainly not with the higher interest rates. On a side note, we got so spoiled with cheap money for so long that now people are outraged at a 6% mortgage. When I got my first house in ’93 my rate was about 8%.

I’m not surprised there’s a hangover after the runup, but the interesting thing to me is that the party lasted way longer than just the COVID years. Granted the economy has been good, interest rates have still been low by historic standards, and gas prices are very low, so not really surprising, but that seems coming to a rapid halt here in December.

The snowmobile makers finally got brought back down to earth last spring because the lack of snow last winter made for a miserable snowcheck sled ordering season. Nobody wanted to commit $$$$ to a new machine when there had been no riding the previous winter. The party seemed to last a little longer with the UTV/dirt market. That stuff seemed to be selling well even until this summer.

Everything can’t be compared to crazy levels, but even against normal 10-year sales one article I read said this situation is dire. Yamaha just exited the snowmobile market and there have been rumors going back 2 years that Textron is not happy with how their overall ATV/UTV sales have been slipping.

As I said, it will be interesting to see how the marine industry goes. There has been a lot of consolidation and turnover there even in the relatively good times and with so much of the domestic industry actually manufacturing here (and some still midwest based), the looming massive tax increase could push things over the edge.

UTV/ATV sales were crazy from 2019/2022. Many of those machines got mainly used their 1st year. No need to upgrade with 1 to 2k on them. If the companies thought sales increases were going to keep going up 25% a year forever they were crazy.

Oh shucks, raise your prises to a record high, take full advantage of your customers money and then be surprised when the money runs out and no one thinks a new wheeler or sled is worth 17k. Lower profit margins, drop prices especially with interest rates and actually move machine.
There wasn’t good snow here but in snowmobile country there still was. Even the mountain boys who notoriously drop big money don’t want to pay these prices

Bearcat89 wrote:

Lower profit margins, drop prices especially with interest rates and actually move machine.

It will be interesting to see if this actually happens. Remember how long we’ve seen these “day of reckoning” posts with guys predicting price crashes in the boat industry because, after all, these crazy-high prices can’t last…

I dont think theyll ever lower prices. Just make less for higher margin per unit.

TheFamousGrouse wrote:

<div class=”d4p-bbt-quote-title”>Bearcat89 wrote:</div>
Lower profit margins, drop prices especially with interest rates and actually move machine.

It will be interesting to see if this actually happens. Remember how long we’ve seen these “day of reckoning” posts with guys predicting price crashes in the boat industry because, after all, these crazy-high prices can’t last…

Pretty interesting all the days of reckoning rumors I’ve heard but never come to fruition. Used boat market cheapened up a little but that’s all I’ve seen .

Pretty interesting all the days of reckoning rumors I’ve heard but never come to fruition. Used boat market cheapened up a little but that’s all I’ve seen .
[/quote]

Used side x sides crashed in prices pretty good to. The ones priced high are not moving.
Manufacturers most likely won’t change much but rather do mass lay offs and reshape inside to stay profitable. Which is exactly what we are seeing now

Layoffs, periods of high inflation, Yamaha exits the sled business, swanky downtown restaurants quality down the drain, MN budget goes from surplus to projected deficit. I’m not really sure I would say the economy is good right now. Hard to put a finger on all of it. It’s been a wild 5 years.

Textron can be unhappy if they want with atv or utv sales floundering but that’s all on them. The whole Robby Gordon fiasco who many knew would bite them caused a lawsuit and then they couldn’t release future product that was ready to remain competitive. The wildcat xx is next level but without a turbo or 4 door option people shy away. Don’t get me started on ATVs.

Some industries strived during Covid. Some got creamed. Power sports are not the only one that strived. Liquor industry did the same plus plenty others. We are doing the same with layoffs. Sucks but it’s normal.
With record growth comes more jobs. Come back to the norm need less jobs.
It’s Econ 101 simple supply and demand curve laid over a price demand curve. Everyone went out of whack.
Some people added jobs and others were forced to get cut during Covid. Crazy times if you think about it. Unprecedented in my life.
Workforce is easiest cost to cut. Happens instantly on a spread sheet.
Sky is not falling. Things will be alright. Things will come back to the middle of the graph at some point they always do.

25% tariff won’t help the prices of BRP products in 2025.

It’ll be interesting to see what happens with any tariffs. I see them as pressure to get better trade deals for USA. Often a bargaining chip thrown out, then retracted. Trudeau already visited Mar a lago to meet with trump.

kidfish wrote:

25% tariff won’t help the prices of BRP products in 2025.

Tariffs have been put in place since his first go around. This isn’t something new.

Bearcat89 wrote:

Tariffs have been put in place since his first go around. This isn’t something new.

Not 25% or at all. For Mexico or Canada being the source as far as I can tell from HTS codes regular ATVs have no tarriff and side-by-sides are either free or 2.5% maybe depending on what the correct code is.

crawdaddy wrote:

Layoffs, periods of high inflation, Yamaha exits the sled business, swanky downtown restaurants quality down the drain, MN budget goes from surplus to projected deficit. I’m not really sure I would say the economy is good right now. Hard to put a finger on all of it. It’s been a wild 5 years.

For every point there is a counterpoint. Unemployment is hovering around 4% percent, best in the past approx 25 years? Smart planful companies are thriving. And have you looked at your 401k lately?

I don’t trust any of those jobs reports. A few months after they report them they adjust the numbers way down. The number of full time jobs has plummeted while part time is climbing. That’s hardly a positive.

yea parttime help is a big piece of crap…..no benefits. more profit!!

we had an unfortunate thing happen to our newest wheeler at the cabin, went up in flames. the only thing we could save was a tire, the ball hitch and maybe 1 or 2 small items.

we replaced it with another Yamaha 700 4 wheel drive, added a wench for about 8500 bucks. was a 2024 model, which i didnt think was to bad!!

President-elect Trump has promised to impose tariffs of 25 percent on all imports from Canada and Mexico and an additional 10 percent tariff on all imports from China when he takes office. If imposed permanently, we estimate these tariffs would generate $1.2 trillion in tax revenue from 2025 through 2034 on a conventional basis. In the long run, we estimate the tariffs would reduce GDP by 0.4 percent and employment by 344,900 jobs. Our estimates do not capture the effects of retaliation, nor the additional harms that would stem from starting a global trade war.

Don Meier wrote:

President-elect Trump has promised to impose tariffs of 25 percent on all imports from Canada and Mexico and an additional 10 percent tariff on all imports from China when he takes office. If imposed permanently, we estimate these tariffs would generate $1.2 trillion in tax revenue from 2025 through 2034 on a conventional basis. In the long run, we estimate the tariffs would reduce GDP by 0.4 percent and employment by 344,900 jobs. Our estimates do not capture the effects of retaliation, nor the additional harms that would stem from starting a global trade war.

Sounds serious…

Unemployment is low. How about underemployment? Cost of housing? Is the middle class growing or shrinking? Inflation hits hardest those struggling to get by.

The tariffs are not in place yet. If Mexico and Canada stop the flow of illegals they may stop the tariffs from coming into existence. I have no idea if any of this will work. It will be nice to have a president who is not years into mental decline. The new admin has been given a mandate by the American people.

My understanding is that gas here in the Midwest would skyrocket by 75-90 cents/gallon if tariffs are imposed on imported Canadian oil. Most of our crude oil used here in this part of the country is not domestically-produced; it comes from Canada.

I’m not an economist so I don’t know if that’s what would actually occur. But I am fairly certain that’s where the majority of the crude oil comes from here in the Midwest, in addition to some from western North Dakota.

dirtywater wrote:

<div class=”d4p-bbt-quote-title”>crawdaddy wrote:</div>
Layoffs, periods of high inflation, Yamaha exits the sled business, swanky downtown restaurants quality down the drain, MN budget goes from surplus to projected deficit. I’m not really sure I would say the economy is good right now. Hard to put a finger on all of it. It’s been a wild 5 years.

For every point there is a counterpoint. Unemployment is hovering around 4% percent, best in the past approx 25 years? Smart planful companies are thriving. And have you looked at your 401k lately?

Great Counterpoint however people don’t want to see or admit the record unemployment rates. If Trump was in office last 4 years you would hear how great the unemployment rate is and people wouldn’t counterpoint.
As far as 401k’s go? I looked and mine is BOOMING. What I think is funny is when Trump was in office all you heard was “have you looked at your 401k lately” now…. people don’t want to talk about how good it has been. To prove that, just read the comments after this post.

glenn57 wrote:

yea parttime help is a big piece of crap…..no benefits. more profit!!

we had an unfortunate thing happen to our newest wheeler at the cabin, went up in flames. the only thing we could save was a tire, the ball hitch and maybe 1 or 2 small items.

we replaced it with another Yamaha 700 4 wheel drive, added a wench for about 8500 bucks. was a 2024 model, which i didnt think was to bad!!

Fire huh?
I know not what you speak of.

I forgot that Stewart haas racing is not fielding a team in NASCAR next year. This issue runs deep.

glenn57 wrote:

yea parttime help is a big piece of crap…..no benefits. more profit!!

we had an unfortunate thing happen to our newest wheeler at the cabin, went up in flames. the only thing we could save was a tire, the ball hitch and maybe 1 or 2 small items.

we replaced it with another Yamaha 700 4 wheel drive, added a wench for about 8500 bucks. was a 2024 model, which i didnt think was to bad!!

Did you buy a Kodiak? If so how do you like it ?

Yes itsca Kodiak honestly haven’t used it muck, but the one that fried was also Kodiak and liked it except gor the 3 recalls

My brother has the Yamaha next step up but friggin can’t remember the name!

Yea EPG we now feel your pain. We’re just lucky the whole chippewa forest didn’t go up in flames it was dry as hello and windy as all freakin get out