Need advise....considering opening a new atv/utv dealership

Like the title said.....myself and a partner are looking into opening an atv/utv/pwc in rural central Texas. We are looking into Polaris, Kawasaki, and Yamaha. We currently have a 8 bay full service center, ranch supply, as well as aftermarket truck bed and trailer sales. We are looking for something to add this to our portfolio.

The closest new atv dealer to us is about an hour drive. Any thoughts good or bad would be greatly appreciated.

Thanks,
Bill

 

One of my best friends just shut the doors on his Kawasaki, KTM dealership a few years back. The store had been in business for 20+ years. I know the profit margin was super slim to none on new bikes. He made his money on used bikes, parts, accessories and service. Your almost better off just selling used and providing parts and service IMO from seeing his business fold. I would say if you already have a successful business that won't be dependent on the profits of the motorcycle side right away you may have a chance but I don't really know your situation so thats a tough call.

 

Is the ATV/UTV market the same as the cycle market??

No clue about your area, but up here in Wiscy, I see TONS of unmoved inventory for those market segments sitting at the dealers. That the sum total of what I can contribute.

 

Can you get the ATV side of the business with Yamaha and the rest without the motorcycle side?

 

Thanks. Yes I believe you can get atv without cycle. Cycles would be a total loser here. Tons of utility vehicle use......metric tons!

 

I honestly think it's not a bad idea then. Parts and service, baby! That is if you have the floor space of course.

 

Depends on the farmers/ranchers in your area. I call on one dealer for my job. The recreational atvs/utvs they sell aren't enough to turn on the lights. The core of their business is selling to farmers who use them every day and have them destroyed within a couple of years.

Yes and I happen to think I know you can get a powersports franchise without bikes.

 

I think the area has a lot to do with being successful. Your nearest competitor is quite a ways away, that might help.
I have a friend that owns a Yamaha/Suzuki dealership. He sells quite a few new ATVs, he has 2 stores and is opening another. His main shop is on the east side of Indy, but he has another store about 30 minutes out of the city, and it's a huge ATV market for hunters, farmers, and country people. They are known for having a great service department.

Good luck in your search.

 

One of my good friends owns a Yamaha ATV/UTV/Snowmobile shop here in WI. They do not have the motorcycle line.

He's a motocrosser since he was born, so he really wanted the motorcycle line. Yamaha wouldn't give it to him because he was too close to two other dealers. In the end, it turned out to be a blessing. The UTV and sled guys spend a ton on gear and upgrades, and they break stuff. His accessories dept does very well, and I know he makes a killing off of distressed inventory purchased from either Yamaha or the floor plan bank at a great deal.

His store is called Powersports 1 in Little Chute, WI. Owner's name is Rod. He's a great guy and I'm sure he'd be willing to take five minutes chat with you.

 

I stop in there frequently. Nice shop.

 

Floorplan is the killer. OEM parts you can get from Ron Ayers.

Buy used, fix up, sell for profit, repeat.

 

I bet your service center will getting all its profits from Polaris products.
Around here... many shops refuse to service them mostly because they dont have techs with much experience with the line.

 

You can't make anything on new unit sales most of the time and the floorplan sucks up any profit. The ones that make out on new units are the banks.

 

Polaris is good for shop work, I get alot of them. Gonna be more I think, Polaris dealer 10 miles away just went out.

 

The Kawasaki dealer floor plan killed the shop I use to work at. Worked there in 08-10. You were lucky to sell 1 bike a month, then have them tell you that you need to order 100 units to meet your quota. Stick with used, fix up, offer a 6 month warranty.

 

To succeed as a franchised dealer, you need volume, lots and lots of volume.

 

New unit sales are for sure volume and usually sold close to tripple net. The profit comes from the back end: finance bump or flat pay, selling extended warranty, gap, maintenence contracts ect. If you can hold a few hundred before that stuff your doing well. But you need volume or the floor plan will eat you alive. If you turn the product within 120 days or so it should not cost you much if anything.

Be carefully with Polaris. They get you on a merry go round with units and programs 'you need to order 35 of these or you won't qualify for rebates' so if you don't order them you can't compete as the guys who did get can sell with the big rebates off the units.

Id say start with used. Get a line of credit and hithe up national powersports auctions. The good thing is your not competing with the guy down the street with the same new unit. Every used unit is unique and you can hold good money.

 

Thank you so much. Can you pm me his contact information. I would love to take 5 minutes of his time.

 

Line of credit is no issue for us.....I love your idea of sticking used and hitting national power sport auctions. Thank you