Powersports Market Update
“After two consecutive months with declining values that appeared to signal the end of the pandemic fueled market we have been in since spring of 2020, values are back up again this month. Nearly all segments have shown an upwards trend in pricing, several by fairly large amounts. Clearly the market remains in a transition period as it heads towards its new normal.” – Scott Yarbrough, Senior Analyst, Motorcycle & Powersports
August to September Average Segment Change in Value
As mentioned above, the most noteworthy item in Powersports values this month is the rebound in pricing we have seen across the board. Values had been trending downwards for a few months, and with the vaccines and reopening of most of the country over the summer, it appeared the pandemic fueled demand for Powersports vehicles was starting to wane. Whether it is the concerns over the Delta variant causing an increase in consumer demand, or ongoing supply issues fromthe manufacturers, specifically the “chip” shortage, the end result is that prices are back on the rise again. Most surprising are the warm weather segments, Cruisers, Street Bikes, Scooters, and Dual Sports, all of which are up roughly 1.0% this month when they would normally be depreciating in value as cooler weather approaches. Utility vehicles oddly are down a bit, but this is likely a blip in the data considering overall rise in the rest of the market.
Segment Spotlights & Industry News
Cruisers, much as they did last year at this time, are once again bucking historical trends that usually see prices decline for these bikes as we head into fall. On top of that, the Domestic V-Twins are outperforming the Metrics by about half a point at the moment.
Dirt Bike Performance
Dirt Bikes continue to be one of, if not the, strongest segments since the pandemic began. Coming off only a mild drop in values last month, their strong 4.0% increase shows that the seasonal Fall demand for these units remains healthy.
- Quarterly earnings from BRP (makers of Can-Am, Sea-Doo, & Ski-Doo among others) hit another record with revenues up 54%, and normalized earnings per share up 154%. The company stated the results were due to strong consumer demand, market share gains, and their ability to maneuver through the current challenging supply chain environment.
- Seeking to fill a long-time desire of many in the Powersports industry, a new Nationals Powersports Dealer Association (NPDA) was launched this month. The association was created to “help the franchised and independent powersports Dealer through special services, products, programs, education, and advocacy of Dealer views and concerns to create a professional, successful, and profitable industry.” For more information please visit their website at npda.org.
Recreational Vehicles Market Update
“The values of used RVs sold at wholesale auctions rose across the board once again last month, making it seven months in a row of increases. The gains that we are seeing are slowing a bit, suggesting that we may soon see the wholesale market begin to flatten and return to more normal seasonal patterns. We are continuing to hear from dealers that they feel their lots are still understocked.” – Eric Lawrence, Principal Analyst, Specialty Markets
Wholesale RV Values Continue to Set New Records
For Motorhomes (including Class A, B, and C)
- Average selling price was $75,489, up $2,306 (3.1%) from the previous month.
- One year ago, the average selling price was $48,462.
- Auction volume was up 10.8% from the previous month.
- The average model year was 2009.
For Towables (including Travel Trailers and Fifth Wheels)
- Average selling price was $24,140, up $486 (2.1%) from the previous month.
- One year ago, the average selling price was $17,010.
- Auction volume was down 9.5% from the previous month.
- The average model year was 2016.
According to the RVIA, the total number of RVs shipped in July reached 44,537, the highest amount ever for the month, and an increase of 3.5% over July 2020. Towables totaled 40,511 units and motorhomes accounted for 4,026. Truck Campers came in at 4363, Folding Camping Trailers reached 646, and Park Models were 261. This is the ninth month in a row that a new monthly record has been set. Year over year, towables were up 3.4% and motorhomes rose 3.9%.
- The Hershey RV Show, presented by the Pennsylvania Recreation Vehicle and Camping Assn, is scheduled to be held September 15-19th after missing last year due to Covid. Often drawing in excess of 50,000 visitors, it is often called America’s Largest RV Show.
- Camping World announced they are planning to open at least 20 new locations during the next three years.
- Winnebago will be moving their corporate headquarters from Forest City, Iowa to Eden Prairie, Minnesota.
- Kampgrounds of America (KOA) predicts that 28 million families plan to camp over the Labor Day weekend.
- Statistical Surveys, Inc. announced there were 63,246 retail RV registrations in June, the 2nd best June on record.
- Keystone RV announced they will be adding solar panels as standard equipment on the majority of their towables.
Collectible Cars Market Update
“The auctions held in conjunction with the Pebble Beach Concours d’Elegance wrapped up a few weeks ago, and they certainly did not dissapoint! Total sales came in at just over $350 million, and that number could easily be pushed up if a few more of the closer “no sales” wind up coming to an agreement. The overall sell through rate was roughly 80%, which is impressive given the high dollar amounts of the vehicles being offered.” – Eric Lawrence, Principal Analyst, Specialty Markets
- RM Sotheby’s Monterey auction was a huge success, with the three-night total sales coming in at an impressive $148,528,300. Their sell through rate was 90%, with 42 cars selling for seven figures. This was their third highest grossing Monterey auction ever. There were active bidders from 34 different countries.
- Gooding & Company’s two-night Monterey sale was nearly as impressive, with a sell through rate of 87% and total sales of $107,045,410. This is their 17th year of being the official auction house of the Pebble Beach Concours d’Elegance. The pristine 1995 McLaren F1 road car (one of 64 ever built) was the week’s top seller.
- Mecum’s Monterey Daytime Auction was their most successful ever, with 411 of 519 cars hammering sold for a sell through rate of 80%. Their top ten grossing cars all sold for in excess of $1 million with a grand total of $57.4 million.
- Bonhams’ Quail Lodge Auction was also very successful and posted a 91% sell through percentage. Total sales came in at just over $37 million, and four international world records were set, including a 1928 Mercedes-Benz S-Type Roadster which brought nearly twice its low estimate.
- Russo and Steele’s Monterey auction was a bit smaller than some of the others, with 34 of the 68 vehicles offered being declared sold, resulting in a sell through rate of 50% with total sales just under $2 million.
Notable Recent Auction Sales Include:
- 1948 Talbot-Lago T26 Cabriolet by Figoni et Falaschi $1,875,000 (Bonhams)
- 1955 Mercedes-Benz 300SL Gullwing Coupe $1,700,000 (Bonhams)
- 2014 Ferrari LaFerrari Coupe $3,400,000 (Mecum)
- 1967 Shelby Cobra 427 S/C Roadster $2,800,000 (Mecum)
- 1995 McLaren F1 Coupe $20,400,000 (Gooding)
- 1959 Ferrari 250 California LWB Spider Competizione $10,800,000 (Gooding)
- 1962 Aston Martin DB4 GT Zagato Coupe $9,500,000 (RM Sotheby’s)
- 1958 Ferrari 250 GT TdF Coupe $6,000,000 (RM Sotheby’s)
- 1992 Dodge Viper RT/10 Roadster $132,000 (Russo and Steele)
- 2019 Ford Mustang Bullitt Coupe $80,300 (Russo and Steele)
1948 Talbot-Lago T26 by Figoni et Falaschi Courtesy of Bonhams
The Vintage Pickup Truck segment was originally limited to pickups, but has recently expanded to include collectible SUVs, many of which were constructed on a modified truck chassis. A few examples within this segment are Ford, Chevy/GMC, and Dodge pickups built from the mid-1940s up through the early 1970s, Jeep CJs, Toyota Land Cruiser FJ40s, International Scouts, early Range Rovers, and first-generation Chevy Blazers and Ford Broncos. Pickups have been on a run for the better part of a decade, and SUVs have been on fire for the past two or three years, with values doubling or sometimes tripling during that time frame.
Most of the vehicle segments we track went up a little last month, including Muscle Cars, Pony Cars, American Classics, Vintage Exotics, and Classic Trucks/SUVs. The sole decliner was European Sports Cars, which dipped less than one percent. This is not too surprising, given the amount they had increased the past few years, especially pre-1974 Porsches. As we are coming out of COVID and things have been getting back to normal (hopefully) there has been a lot of pent-up consumer demand. All of the “fun vehicle” categories are seeing increases, including Boats, Motorcycles/Powersports, RVs, and of course collectible cars and light trucks. Exotic cars, both vintage and modern, did extremely well at the auctions in Monterey, California associated with Pebble Beach.
Medium and Heavy Duty Truck & Commercial Trailer Market Update
“Used pricing for Medium and Heavy-Duty Trucks, as well as Commercial Trailers continues to increase as microchip delays, driver shortages, COVID-19, and flooding in the northeast help to increase new and used demand. We’ve seen stable to increasing price trends throughout much of 2021 and the market is expected to remain stable through 2022. Due to price fatigue, buyers did their best to slow the market down in August by only purchasing when absolutely necessary. Here recently, we’ve seen an increase in bidding and buying activity as production delays are expected to last until 2023. With freight demand increasing, fleets need equipment to move products, and the only place to find equipment is at the auction. With an increase of physical attendance and onsite bidding, auctions around the country are returning to normal operations despite increasing COVID concerns.” – Josh Giles, Principal Automotive Analyst, Valuations & Residuals
- The chart above shows the monthly adjustment trends for each segment within the Heavy-Duty market.
- We are seeing continued stabilization in most segments with Heavy-Duty Regional and Over the Road trucks and tractors preforming better than Construction units.
- Increasing freight and decreasing supply are helping to contribute to the strength in pricing.
- From August to September, Heavy-Duty Construction values increased an overall weighted average of 0.4%, Heavy-Duty Over-the-Road units increased 0.2%, and Heavy-Duty Regional Tractor values increased 0.3%.
- The chart above illustrates the monthly adjustment trend for Medium Duty trucks.
- Production delays mixed with increasing demand on last mile deliveries continue to help improve values for units in this segment.
- From July to August, Medium Duty Trucks have increased an overall weighted average of 2.1%.
- Since January of this year, Medium Duty values have increased 21.3%. This is amazing considering MD units had depreciated by 16.7% during the same period in 2020.
News and Notes
- According to the Federal Reserve Economic Data (FRED), new retail sales grew 4% from July to August. The month prior (June to July) new retail sales dropped 12%.
- Five months in a row of stable retail sales is encouraging and could be a sign that OEMs and their venders have corrected some supply chain issues; however, further delays are expected to hinder new production. This will likely result in retail sales figures remaining below current numbers through the first quarter of 2023.
- The ATA Truck Tonnage Index fell from May to June, as equipment and drive shortages continue to slow overall freight and delievery expectations.
- Reports are indicating that driver interest is down due to the reduced number of driver applicants and graduates coming out of school. There is also a lag of drivers returning to work due to unemployment benefits. Interest will likely increase as time goes on and unemployment benefits are reduced.
- New and Used Commercial Truck values will continue to slowly rise through the rest of this year. We expect a slow recovery and for this market to remain strong through the first quarter of 2023.
Commercial Trailer Market Update
- Commercial Trailer values have been increasing since December of 2020 due to production shortages and strong freight demand.
- In January of this year, prices began to increase as freight demand grew and new and used supply became more scare.
- Our team is currently analyzing the most recent auction and retail transactions to make another round of value adjustments heading into next month.
- Since the beginning of the year, Dry Van values have increased 32.4%, Refrigerated Vans have increase 11.2%, Steel flatbeds have increased 2.9%, and Dump Trailers have increased 3.4%. To put this in perspective, during this period last year, Dry Van values had fallen 18.3%, Refer Vans were down 23%, Steel Flatbeds were down 15.7%, and Dump Trailers were down 10.1%.
- Recent auction and retail sales figures indicate that this market will continue on an upward trend through the remainder of this calendar year as commercial trailer production idles and freight demand grows.