PowerNewsTM

VOLUME 6 • JULY 2015www.npauctions.com

IN THIS ISSUENPA Turns 25Editor’s Note - Seasonal ShiftsNADA InsightsNPA All-Stars

They say that the more things change, the more they stay the same. That is certainly the case in the powersports industry! From Ducati’s retro styled Scrambler to Kawasaki bringing back the H2 super bike for 2015, what is old is new again… and cooler than ever! For the first time since the 2008 crash, motorcycle sales are approaching double-digit growth with throwback bikes like the air-cooled BMW R nineT, the return of the Road Glide to Harley’s line-up, the Triumph Thruxton, and other retro plays on the past. During the past quarter century the powersports industry has proven to be incredibly cyclical… and the good news is that it looks like we are on another upswing. However one constant is that NPA has been setting the pace for successful dealers for the past 25 years. Originally created as Cycle Express, National Powersport Auctions serves lenders and dealers throughout the nation with

a complete range of auction-related services… concepts that were largely unheard of back in 1990! Of course the market then was also set to enjoy 13 consecutive years of growth, buoyed by consumer financing from the OEMs. Financing initially helped dealers sell new more than used units, but the Lomas family and now NPA CEO Cliff Clifford persevered. The auctions gradually increased in size and frequency and the number of units grew from about 300 units total that first year to more than triple that in a single day, repeated four

times a month! From the first live auction in 1991 and the 1997 opening of the NPA facility in Atlanta (Cliff’s best NPA memory, see “Two Tribes” on page 4) all the way through the opening of Dallas in 2004, the first NPA eSale in 2003, the first live simulcast in 2007, and the opening of the Cincinnati operation in 2008, NPA has experienced a series of its own milestones. To put the NPA milestones in perspective, take a look back at where we were 25 years ago. After the boom in the 1980s and the bust courtesy of

see NPA Turns 25 p2

MIC SnapshotAIME 2015NPA On The MoveNPA Living Legends

Going Back ToThe Old School

NPA TURNS 25

It happens every year, yet the exact timing and impacts are unknown: Pre-owned values adjust as the riding season pivots from the windshield to the review mirror. Last year the pre-owned market experienced a steep adjustment the second half of June. As I write this column today (July 7th, 2015), seasonal values have declined more slowly but are sure to shift as Fall approaches. What can we learn from this? First, if you are new to pre-owned, the pre-owned market has a natural curve that’s softer in the summer/fall due to new model launches and rebates. It also is the time of season that dealers start to prepare for fall and winter and are less aggressive with stocking up. Second, you can never time the market accurately and first money is best money. Like riding a motorcycle, be sure to look ahead when you are taking trade-ins. We recommend valuing a trade 45-60 days out to stay ahead of current market values, which can adjust a few points each month to bottom out 6%-12% in the fall/winter from their Spring averages. When looking at NPA Value Guide and NADA guide values be sure you make the appropriate adjustments as you go. This will help ensure that you are in the trade appropriately so if it goes to auction, you are “in it right” and can liquidate it quickly. Although the details of seasonal shifts vary each year, you can use NPA values, monthly NPA market reports and the knowledge that the market will shift to help you price trades better so you can turn your capital back into cash quickly at auction. If you ever have any questions or would like more information on market changes please feel free to reach us at info@npauctions.com

the CPSC Consent Decree, three-wheelers were phased out in favor of 4-wheelers. Harley-Davidson’s year-over-year unit sales were on the rise after the AMF-era and near shut-down of the entire operation; Honda and Yamaha were turning concept bikes into sales floor realities; and the Sturgis Rally was celebrating its 50th Anniversary as the nation’s largest biker bash! Suzuki actually brought the quad concept to market first in 1983 with the little LT125, but it was Honda who became the quad kings. During the 1990s Honda transitioned its ATC to ATVs and were selling them like hotcakes. In fact, during the decade, Honda sold more than 530,000 of their ubiquitous FourTrax 300s alone — talk about covering your tooling costs! NPA recognized that many of the early four-wheelers were true utility machines rather than recreational toys and added a specific auction lane to accommodate quads in the Poway flagship facility… a line that is still going strong in 2015. Thanks to Malcolm Forbes and his “Capitalist Tools” gang, and with the introduction of the FLSTF Fat Boy in 1990, Harley-Davidson sales surged. Hogs were in and The Motor Company’s sales jumped from 62,458 that year all the way up to nearly 350,000 units at Harley’s high-water mark in 2006. Add in another 12,500 Buell motorcycles to the mix and Harley/Buell was selling nearly as many units in 2006 than the entire industry combined had sold (including

scooters and ATVs) in 1990! The 50th Annual Sturgis Rally in 1990 marked the largest gathering of bikers in the world. More than 400,000 bikers rode to the Black Hills of South Dakota to celebrate. That number jumped to 633,000 for the 60th in 2000, but for the 70th Anniversary in 2010, the post crisis number had dropped to 466,000. Conversely NPA recorded its best year, running a record 90,000 units down the auction lanes by December that year. This year, rally attendance is expected to climb back up to the 500,000+ range as motorcyclist from all over the world

SEASONALSHIFTS

SENIOR EDITOR ..............Robin Hartfiel

PRODUCTION EDITOR ... Ryan Keefe

ART DIRECTOR. ...............Efraim Manuel

www.npauctions.comNPA San Diego, 12400 Stowe Drive • Poway, California 92064 TOLL FREE 1.888.292.5339 • Fax 858.513.1599Copyright 2015, National Powersport Auctions

VOLUME 6 • JULY 2015 • NPA POWERNEWS • WWW.NPAUCTIONS.COM • P2

ride in for the 75th Annual Sturgis Rally… and NPA’s momentum is going strong. In 1990 more than 433,000 motorcycles, scooters and ATVs were sold at the retail level. Heady times were in store as the motorcycle market was about to bounce back from a crippling recession and go on a run of double-digit year-over-year growth that would span the next 13 years! Is it mere coincidence that the industry experienced double-digit growth for more than a decade after NPA was founded in 1990? Perhaps not! Following the 2008 crash, the cycle looks like it is starting all over again. Industry guru Don J. Brown said back in January 2009 that used motorcycles were the secret to sales in tough times and that dealers need to concentrate on how they merchandize and sell used bikes if they want to improve profits. He repeated himself again in June

of that year, saying, “I’ll say it again: When the economy sinks as it has recently, it’s the used bikes and accessories that can help make the difference at your bank!” According to MIC data, a little more than 465,000 motorcycles sold in 2013. Add in scooters and ATVs and the grand total was 694,000 units. In 2014, motorcycle sales had climbed to 483,526 and the grand total came to 713,000+ for the year. Check out the positive Q1

2015 sales increase in the MIC Snapshot report on page 4 and you can see the new unit sales are continuing to increase. While we wouldn’t be so presumptuous as to predict another 13 year run of new unit sales like we experienced following NPA’s launch in 1990, we can appreciate the fresh flow of pre-owned inventory that will be coming through the auction lanes in the coming months. Fast-forward from 1990 to 2015 and three wheelers are still selling like hotcakes…although instead of the little Honda ATC 90,

By Jim Woodruff

SAN DIEGO • DALLAS • CINCINNATI • ATLANTATOLL-FREE 888.292.5339 WWW.NPAUCTIONS.COM

NPA TURNS 25

CONTRIBUTORS

MANAGING EDITOR .......Becky Sabala

SECTION EDITOR ........... Sara Spohr

continued from cover

Adjusting Trade-InValues For The Fall Season

CLIFF CLIFFORD - STANDING ON THE 1ST FOUNDATION OF NPA

it is now the Can-Am Spyder, which just commemorated 100,000 units being sold, and the Polaris Slingshot. Harley-Davidson’s sales are also on the rise, led by the return of the Road Glide and the small displacement 500cc and 750cc Street models that are buoying global sales for The Motor Company. “There is a reason why NPA has been around for the past 25 years, through thick and thin,” notes NPA COO Jim Woodruff. “There is a profit opportunity for every dealer in this country. We realize we play an important role in the growth and profitability of all our customers, and we are dedicated to providing them with the

tools and first-class service they need to be successful,” he adds. As for NPA’s next 25 years the road map is being laid with technology, partnerships, tools to maximize dealer convenience, and the hundreds of thousands of NPA data points to help dealers make the right business decisions. There are several projects already in the works with a few debuting as early as 2016. The powersports race has no finish line, but plenty of winners. From the holeshot 25 years ago, NPA has been here to support successful dealers. Here’s to the next 25!

Set for October 15-18, 2015 at the Orange County Convention Center in Orlando, Florida AIMExpo is now the largest powersports industry trade event left on the calendar. A combination trade/media/consumer show, AIMExpo’s one-stop shopping approach provides dealers and consumers a chance to get a holeshot on 2016. From BRP/Can-Am and BMW to KYMCO and the Japanese Big Four, the OEMs are all-in for this high-stakes game. Nearly 450 of the

leading aftermarket firms are already on the exhibitor list for Orlando in October! Of course any opportunity to reach out to dealers and OEMs, as well as the media and our partners like GE Capital, means that NPA is in the middle of the mix as an exhibitor, marketing partner to AIMExpo and perhaps most importantly an educator. “The ability to educate and listen to dealers is ideal, and the key reason NPA has participated in every AIMExpo,” says COO Jim Woodruff. “We are particularly proud of our role in the PowerSports Business Institute educational program.” More than just presenting, NPA has facilitated access to experts from the OEM side, The Motorcycle Industry Council and leading financial institutions including Capital One, GE Capital and Sheffield Financial Services to provide a real world “state of the industry” roundtable. Like the major exhibitions in Europe that AIME is modeled after, this show has a consumer component. “While we are focused on dealer-only auctions, our world class auction staff will be donating their time to the Pediatric Brain Tumor Foundation Charity Auction at AIME as well,” adds Woodruff. Between the educational sessions with dealers and the charity auction, you will be able to find the NPA crew at Booth 265 on the show floor. If you are interested in getting jump on the 2016 season’s race for profitability, register now at: aimexpousa.com

AIME 2015

NPA PICKS UP A PAIR OF PLAYERSAll-Stars Avello & Ramanauskas Added To The TeamNational Powersport Auctions has picked up a pair of all-stars with its first round draft picks as industry veterans Tony Avello and Chris Ramanauskas have joined the team. These seasoned pros will be serving dealers in key areas of the country effective immediately. As the old saying goes, sometimes you can’t tell the players without a scorecard so here are the stats on these two players. Tony Avello combines 15 years of auto dealership experience with three years in the financial services industry. As the latest Regional Sales Manager on the NPA team, Tony is taking care of dealers in the Dakotas, Wisconsin, Minnesota, Nebraska and Iowa. Despite his auto industry background, Tony is a motorcycle guy through and through, according to NPA Sales Manager, Mike Murray. “Tony literally grew up in the paddock and he still owns his first bike, a 1991 Yamaha FZR 600 that is currently parked next to his 2012 Aprilia RSV4. He combines the passion for powersports with the professionalism of the finance industry, which made him the ideal candidate for the RSM position.” Murray isn’t kidding about Tony being a motorcycle guy from the first day of spring training. “In the late 90’s my older brother Greg started road racing in the Championship Cup Series for Buell,” says this slugger. “Of course I had to see what my brother was up to, so I always went with him to the track to help pit crew. It wasn’t long before I got the urge to throw a leg over a bike and bought my first bike my junior year of high school. Being at the track and around people who love motorcycles from the start has helped shape my strong passion for the sport.” Fast-forward to 2015 and Avello is amped to

be on NPA’s roster! “The powersports industry is gaining momentum. New models are bringing new faces to the powersports world and it couldn’t be a better time to get onboard.” Welcome to the team, Tony! Although Florida is home to many MLB teams, spring training camps, industry All-Star Chris Ramanauskas is extending the season year-round for dealers in the Southeastern Region. With 35 years in the industry, including 17 years at the dealership level, Ramanuaskas has played every position in the powersports field. “I have been in the powersports industry since I was 16 years old,” says Chris. “I have seen many changes come to our industry, and I think the next 5 years are going to be a grand slam for our business… time to play ball in pre-owned or strike out!” After spending the past 18 years with aftermarket winner Parts Unlimited, Chris is a familiar face to dealers in the region and is looking forward to what happens next in his new RSM role. From his first 3.5 HP Briggs & Stratton mini bike with a scrubber rear brake at age 5, motorcycles have been an obsession for Ramanauskas. “No one in my family rode, but I saw the fun, adventure and skill level that motorcycling requires. From watching Evel Knievel to Carlsbad Motocross on Wide World of Sports, I was hooked! I still ride to this day, both dirt and street, as often as I get

the chance.” Dealers, time to step up to the plate and PLAY BALL!

VOLUME 6 • JULY 2015 • NPA POWERNEWS • WWW.NPAUCTIONS.COM • P3

www.npauctions.com

MIC SNAPSHOT

YEAR TO DATE

MONTH

As Spring unfolded and weather improved, most powersport vehicle segments saw an uptick in sales and interest in Q1. That trend was mirrored in the wholesale market as auction prices rose in the Spring. This was expected as dealers were aggressively stockpiling inventory for the peak of their selling season. Most dealers reported an increased consumer appetite for pre-owned vehicles, which is a great complement to the overall rise in new unit sales reported by the MIC as OEMs release all new models at attractive price points. The general increase in consumer interest in new and used motorcycles is reflected in the latest analysis from NADA on trends in consumer search patterns for Q1. The figures below are based on consumer traffic on NADAguides.com and are calculated by comparing the percentage change of consumer interest, for the top 15 researched manufacturers, January-March 2015 as compared to January-March 2014.

YoY Change in Research of Top Powersport Brands

VOLUME 6 • JULY 2015 • NPA POWERNEWS • WWW.NPAUCTIONS.COM • P4

VEHICLE TYPE GENERAL TYPE 2015CURRENT

2014PRIOR

UNITCHANGE

PERCENTAGECHANGE

ATV ATV 45,780 45,385 395 0.9 %

MOTORCYCLE DUAL 7,718 7,644 74 1.0 %

MOTORCYCLE OFF-HWY 18,741 16,597 2,144 12.9 %

MOTORCYCLE ON-HWY 70,948 65,301 5,647 8.6 %

MOTORCYCLE SCOOTER 4,881 4,992 -111 -2.2 %

MOTORCYCLE TOTAL 102,288 94,534 7,754 8.2 %

GRAND TOTAL 148,068 139,919 8,149 5.8 %

VEHICLE TYPE GENERAL TYPE 2015CURRENT

2014PRIOR

UNITCHANGE

PERCENTAGECHANGE

ATV ATV 21,039 20,883 156 0.7 %

MOTORCYCLE DUAL 3,702 3,668 34 0.9 %

MOTORCYCLE OFF-HWY 8,423 7,703 720 9.3 %

MOTORCYCLE ON-HWY 35,436 33,467 1,969 5.9 %

MOTORCYCLE SCOOTER 2,416 2,425 -9 -0.4 %

MOTORCYCLE TOTAL 49,977 47,263 2,714 5.7 %

GRAND TOTAL 71,016 68,146 2,870 4.2 %

Led by record sales of high-end European street bikes for the first quarter, 2015 retail sales figures are up 5.7% overall according to the Motorcycle Industry Council (MIC). Compared to the 2014 Q4 increase of just .5% overall, this is cause for celebration! A record setting first quarter by Triumph Motorcycles America, which included the highest single day retail sales ever on March 31st, resulted in the company being the top selling European brand in North America. The ranking is based upon motorcycle unit sales in the 500cc-plus on-road and dual-sport categories for the U.S. and Canada. Triumph is up 16% year-to-date, well ahead of the MIC averages. Speaking of MIC figures, dealers can now become MIC members and access the same data as the OEMs, including the Flash Reports like this one. For more details on the benefits of MIC membership, visit: http://membership.mic.org

Some real high rollers will be headed to the Wynn in Las Vegas. But we are not talking about a seat at the World Series Of Poker final table… instead NPA will be participating in Powersports Finance 2015, a conference held in conjunction with the 15th Annual Auto Finance Summit. This is the first forum to share insights, best practices and practical intelligence on motorcycles, watercraft and other specialty vehicles directly with lenders and financial institutions. Jeff Young, Executive Vice President & Chief Operating Officer, Yamaha Motor Finance Corp., is kicking things off with a keynote address covering powersports market dynamics followed by a full day of sessions on Oct. 21 and concluding with a cocktail reception to kick off the 2015 Auto Finance Summit.

Readers of Racer X Magazine may recognize the “Two Tribes” format for this segment where we pit the two senior statesmen from NPA against each other for a series of questions. NPA Founder & President Cliff Clifford squares off against Director of Customer Service Al Sands in this battle of the legends… um, experienced industry professionals.

How Old Are You Really?Cliff Clifford: 56 years youngAl Sands: 54 years young(er)

Where Are You Originally From:CC: Pittsburgh, PennsylvaniaAS: Randolph, Massachusetts

What Was Your FirstJob In The Industry?CC: Set up and PDIAS: Sales at Fun Bike Center

What Was Your First Motorcycle?CC: Suzuki TS100AS: 1969 Honda CL450

How Long Have You Been In The Industry & How Long With NPA?CC: 40 Years & 25 years with NPAAS: 31 Years & 17 years with NPA

What Is Your Best NPA Memory? CC: Opening Atlanta in 1997AS: The walls going up at Cycle Express

What’s Playing on your Eight Track Cassette (seriously what’s your current music play list)?CC: Kid Rock—Rock N Roll Jesus. My eight track was Alvin Lee - Ten Years AfterAS: Pearl Jam & U2. My eight track was Led Zepplin & Lynyrd Skynyrd

THROUGH MARCH 2015

Going Back ToThe Old SchoolLIVING LEGENDS

MARKET INSIGHTSReading Between The Lines With NADA

NPA ON THE MOVE