Snowmobile sales in U.S. get chillier
Manufacturers blame 13-year-low on winters with less snow
By RICK BARRETTrbarrett@journalsentinel.com
Posted: Oct. 30, 2006
Snowmobiling in Wisconsin and the rest of the United States has suffered a meltdown from lackluster winters.
U.S. sales of the motorized sleds are at their lowest point in 13 years, according to the International Snowmobile Manufacturers Association, based in Haslett, Mich.
Polaris Industries, one of the largest manufacturers, expects to finish 2006 with 40% fewer snowmobile sales than in 2005.
"We are still in the business, but it's become a smaller piece of what we do," said Richard Edwards, spokesman for the Medina, Minn., company, which also makes all-terrain vehicles and motorcycles.
With about 216,000 registered snowmobiles, Wisconsin ranks behind only Michigan and Minnesota in the sport's popularity. As a major part of winter tourism, snowmobiling supports hundreds of hotels, restaurants and taverns.
The lack of snow in recent winters has been a key reason for a steady decline in snowmobile sales. There have been other reasons, such as more people turning to all-terrain vehicles instead of sleds.
The number of ATVs sold in the U.S. has far surpassed that of snowmobiles in the past 10 years. More than 200,000 ATVs are now registered in Wisconsin, more than double the number 10 years ago, according to the state Department of Natural Resources.
But even ATV sales have slipped, partly because of a decline in consumer spending, according to a Robert W. Baird & Co. report on the power sports industry.
Some dealers have used promotions, such as free winches, to fuel sales.
"No deal walks. If we make a dollar, we sell," one dealer wrote in the Baird report.
Snowmobile dealers still have on hand older-model sleds that didn't sell in 2005. Some dealers have launched aggressive sales promotions to clear out sleds that have been on the showroom floor for three years.
"If someone is going to buy a snowmobile, and they don't need to have this year's latest and greatest, I think there are some absolutely great buys out there," Christopher Twomey, chairman and CEO of Arctic Cat Inc., said last week in a conference call with industry analysts.
The typical U.S. snowmobiler is 42 years old, is married and has more than $70,000 in household income, according to the International Snowmobile Manufacturers Association.
To lift sales, manufacturers have launched an ad campaign at www.gosnowmobiling.org that's similar to efforts promoting motor homes and camper trailers as family-oriented recreation.
On the rebound?
It's too early to measure the campaign's success. But judging from sales in recent weeks, snowmobiling might be on the rebound.
Sales of Arctic Cat snowmobiles totaled $121.5 million in the company's most recent fiscal quarter, up from $111.4 million a year earlier. The Thief River Falls, Minn., company expects a 5% to 9% revenue increase this year from snowmobiles.
"I think there's a belief in the general population that we are finally going to have a real winter again," said Ed Klim, executive director of the International Snowmobile Manufacturers Association. "That's a good thing because, historically, people buy snowmobiles when we have lots of snow."
Better sleds, including new ones that are quieter, more reliable and have push-button reverse, have drawn buyers back to the dealerships. In some cases, people want to trade in sleds that are decades old, said Eric Pedersen, president of Riders Power Sports Inc., a Big Bend snowmobile dealership.
"We have guys who are still fixing their 1979-vintage Yamahas and some other dinosaurs," Pedersen said.
New snowmobiles can range from about $4,000 to $12,000 for a machine with amenities such as hand warmers, electric power outlets, adjustable windshield and adjustable suspension.
"One of the best things is the gas mileage. Some of our fuel-injected models get 17 to 22 miles per gallon," Pedersen said.
Demographics ought to work in the snowmobile industry's favor, because baby boomers are still young enough to ride and have ample money to spend on recreation.
Some boomers have taken early retirements and moved north, further fueling snowmobile sales.
"Their kids are out of school, and they're buying toys for themselves," Klim said.
Most snowmobile riders in southern Wisconsin now haul their sleds hundreds of miles north to find snow and trails, unlike years ago when they could ride in farmers' fields.
Statewide, snowmobile clubs are worried about having fewer places to ride.
"Our access to trails is getting to be a real problem. With all of the new home development going on, the builders aren't leaving room for recreation," said Tom Chwala, vice president of the Association of Wisconsin Snowmobile Clubs.
Years ago there were 104 snowmobile manufacturers, making sleds at a frenzied pace in the late 1960s and early 1970s.
Some of the manufacturers, such as John Deere Inc. and Massey Ferguson Co., were better known for lawn tractors and farm equipment. Outboard Marine Co. and Mercury Marine Inc., both of Wisconsin, made snowmobiles but were better known for boat motors.
Safety regulations imposed on the industry, in the 1970s, drove a lot of manufacturers out of the snowmobile business.
Now, only four major snowmobile manufacturers remain: BRP Inc. of Canada; Yamaha Motor Corp. of Japan; and Arctic Cat Inc. and Polaris Industries, both of Minnesota.
There's some snowmobile- related manufacturing in Wisconsin.
Polaris has an engine plant in Osceola, and Yamaha does product development in northern Wisconsin. BRP buys parts from Wisconsin manufacturers, although its Ski-Doo snowmobiles are made in Canada.
Although U.S. snowmobile sales have declined steadily for years, sales in Europe have increased. They're especially strong in Finland, Norway, Sweden and Russia.
5 months ago