Interesting read on Facebook on the Snowmobile market

[03RX1-ER-LE]

The following was on a snowmobile page on Facebook which really does hit the nail on the head so to speak.
I think Arctic Cat is serious on marketing sleds this year, however what does this do to all the 17/18/19 sleds sitting in showrooms, who the hell would pass up these 2020 prices if really in the market for a new sled.

Greetings,
OK, this is going to sound like a rant, and yes, it is. Additionally you need to be a snowmobiler to even care about it....

There has been a major issue ongoing in the snowmobile industry with “Overproduction”. While it sounds like it should help snowmobile values, it is not.

Last year #YamahaMotorSports took steps, and greatly reduced production, which supported the value of their current models for sale, along with helping support the used sled market.

This year #ArcticCattxtsv has reduced pricing on their snowmobiles 13%-15% across the board. To get that pricing you must Spring order (now) the sled you want this fall. The 13%-15% reduction has now priced their snowmobiles $2,500 to $3,000 less than their competitors.

#SkiDoo and #Snowmobiles.Polaris are continuing to overproduce, pricing their products as they have in the past.

So, what the problem? Here is an example.

So for the particular model of SkiDoo that I want is considered an upgrade from floor stock models. They are not shy about up charging big time for this snowmobile. Up charge is $2,800, and yes it is an upgraded model. You must Spring order (now) that snowmobile for fall delivery.

Then they overproduce the cheaper floor stock models, and force dealers to carry the inventory of them.

They, due to over production ,in January they start coming out with rebates on the floor stock models. This year the rebate from #Skidoo was $2,000-$2,500.

Combine the $2,800 up front higher charge for the premium model, and the rebate and the price difference now becomes $4,800!

That an extra $4,800 for making a nearly order commitment.

Now an even bigger problem is how the rebates are ruining the prices of used or trading snowmobiles.

We early order at the higher prices, the rebates come out and the $2,000 discounts knock the used or trade value of snowmobile by a similar amount.

Now comes #ArcticCat for 2020 with their price reductions, and direction to reduce over production.

Instead of penalizing those who early order, they are discounting their product line to everyone. They are basically providing what would be a rebate, up front to all customers.
Well Done #ArcticCat!

Great website created by #ArcticCat to see competitive models, with pricing below.

https://arcticcat.txtsv.com/shoppin...0MBbBud5nAevnI5eI2W6JHqPqm_qB93X8sDiEcV8a2OqM

 

[Deeppow16]

I think what Arctic Cat is doing is very smart. They are finally pricing sleds what they should be. If you know they were going to offer rebates in the winter anyways why not offer them now so people who spring order don't get screwed on the price. I'm very tempted to go order a new Cat because of the pricing right now. What I don't understand is how can ski-doo and Polaris keep over producing and still make any money? How are they making it work?

 

[Wannaviper]

Arctic Cat is making the spring order an actual "deal" for their customers. Spring orders for Yamaha have been induced by the availability of the special LE models with upgraded shocks, longer warranty, special colors and graphics etc., but there has not really been much of a financial incentive to make the spring purchase. Last year, Yamaha dealers spring ordered a bunch of the Sidewinders for themselves, and as a result they had SRX and LE sleds for sale on the showroom floor come December. My buddy bought a new LE off the showroom floor in January, and by then there were price reductions and 0% financing. As a result, he got the sled he wanted, and saved a ton of money over the guys who spring ordered the same sled. He didn't have to make a downpayment in the spring, and he didn't have to pay for his sled last fall and hold onto it until snow fell. Assuming the dealers do the same thing this year, why would anyone spring order a Yamaha? Arctic Cat appears to be giving you the "deal" up front, and you can spring order a sled with a realistic hope that somebody else isn't going to get a better deal on the same sled next December. If Yamaha wanted to really encourage spring orders, they would give a price guarantee that refunded money to you if the price of your sled went down in the future.

 

[03RX1-ER-LE]

I think what Arctic Cat is doing is very smart. They are finally pricing sleds what they should be. If you know they were going to offer rebates in the winter anyways why not offer them now so people who spring order don't get screwed on the price. I'm very tempted to go order a new Cat because of the pricing right now. What I don't understand is how can ski-doo and Polaris keep over producing and still make any money? How are they making it work?

I am sure like all manufactures, the money is made in accessories such as the linq cans/storage, clothing etc. parts, other product lines (marine/off road) so if little profit on sled, it is made up elsewhere.

 

[number1kyster]

I like what they are doing. If I was spring ordering a new sled, it would be a Cat.

 

[03RX1-ER-LE]

I really believe Yamaha and Cat both trying to fix a huge concern in the sled industry. I know they, Yamaha, seem priced high however factor in the incentives. Remove the value of those and not far off from CAT pricing. Walk into any showroom right now, Doos and Poos with steep discounts on 17/18 and 19 models, so many they coming out of their ears.

 

[biffdotorg]

This biggest bang AC is getting from this program, is they are coming off of an incredible snow season too. Guys are hyped up to go get that new sled. Where as in November/December, many have winter fever. But even more are fence sitting till that snow starts to fall.

Any company in the slightest bit of financial stress will take what they can get now.

 

[RAMSOMAIR]

The Cat and the Yamaha will be very closely priced at the end of the day. The Cats only come with a 1 year warranty where the Yamaha are 4-5 years depending on US or Canada. The Cat dealers are going to make bare bones profit so you bet your #*$&@ they will push hard on extra years of warranty and accessories to fatten their wallets. That now brings the price up $1000 or more. You will be able to negotiate approx. $2000 down on a Yamaha and now we are getting pretty close to the same out the door price. Also, I heard Cat dealers will have 2 weeks to pay for the new delivered sleds in full after its delivered. That means if it shows up in September, the owner will have to pay in full. Thats about 2.5 months ahead of full payment for Yamaha. Its all marketing!

 

[SqueezeER]

I like what they are doing. If I was spring ordering a new sled, it would be a Cat.

Me too!

 

[74Nitro]

I think what Arctic Cat is doing is very smart. They are finally pricing sleds what they should be. If you know they were going to offer rebates in the winter anyways why not offer them now so people who spring order don't get screwed on the price. I'm very tempted to go order a new Cat because of the pricing right now. What I don't understand is how can ski-doo and Polaris keep over producing and still make any money? How are they making it work?

Well the BRP SP has went from over $70 to $36 since last September, so the market isn't liking something there.

 

[T-Bone]

I think what Arctic Cat is doing is very smart. They are finally pricing sleds what they should be. If you know they were going to offer rebates in the winter anyways why not offer them now so people who spring order don't get screwed on the price. I'm very tempted to go order a new Cat because of the pricing right now. What I don't understand is how can ski-doo and Polaris keep over producing and still make any money? How are they making it work?

I may be wrong on this so if a dealer could chime in that would be great.

When the sled leaves the manufacture to be delivered to the dealer, it is considered sold from the manufactures perspective and the dealer now owns it. At that point the manufacture has made its money on the sled. The dealer typically has paid for the sled through use of floor plan financing provided by the manufacture or a bank. The dealer at this point is essentially holding the bag on the sled until it is sold to the consumer. If it takes two years to sell it then the dealer has paid interest on the loan and has thus reduces their profit made on the sled. If a rebate is offered on a leftover sled, usually that is just a credit to the dealer from the manufacture. That credit goes to pay down the floor plan loan reducing the amount of money the dealer owes the manufacture.

Over production causes more issues the next year when the dealer places their order in the spring for sleds to be delivered to consumers that fall. The dealer has leftover sleds from the previous years so they reduce the number of current year sleds that order, say 100 sleds. The manufacture, having to meet certain sales numbers and profits, tells the dealer if they take more (say 150) sleds than what they want, the manufacture will lower the interest rate on the floor plan on the leftover sled they have. Think of it as an incentive to the dealer. The dealer takes the deal against maybe his better judgement and he will now have to sell the leftover sleds he already has and the 150 new ones coming in the fall. If there is a bad snow year you can see how this compounds the issue.

 

[Deeppow16]

The Cat and the Yamaha will be very closely priced at the end of the day. The Cats only come with a 1 year warranty where the Yamaha are 4-5 years depending on US or Canada. The Cat dealers are going to make bare bones profit so you bet your #*$&@ they will push hard on extra years of warranty and accessories to fatten their wallets. That now brings the price up $1000 or more. You will be able to negotiate approx. $2000 down on a Yamaha and now we are getting pretty close to the same out the door price. Also, I heard Cat dealers will have 2 weeks to pay for the new delivered sleds in full after its delivered. That means if it shows up in September, the owner will have to pay in full. Thats about 2.5 months ahead of full payment for Yamaha. Its all marketing!

This all depends IF you choose to get the extended warranty. I have never gotten an extended warranty on any of the sled I have bought. I like to add to many things to my sled that will give me problems if I try to bring it to the dealer with a warranty plus I have zero problem working on my own sleds. I actually enjoy tearing my sled apart and seeing how they are built. So for me its a hell of a deal if I were to order a new Cat. Everyone is different but that's the route I would go.

 

[murdered141]

Let's not forget that ski Doo was in the same boat as gm and dodge year's ago and got bail out money to stay afloat.

 

[Wannaviper]

I won't turn down an extended warranty on a sled, or any other motorized vehicle, but I won't pay extra for it either. I average at least 1,500 to 3,000 miles a year on my sleds, and so far I have found that if there are going to be issues with the sled (that will be covered by warranty) they usually show before the end of the first season. Admittedly, if we have a low or no snow year, my theory may not be as valid. It seems that most of what can or does go wrong on a sled is considered "normal wear and tear," and is not covered by the warranty. My stepson's Sidewinder has over 10,000 miles on it, and so far this year we have done nearly $4,000 in repairs. None of it was covered by the extended warranty.

 

[ishpeming fan]

Kudos to Cat! Nice sleds at a reasonable price is what its all about. You by buy a new chevy cruze for less than a Sidewinder. Crazy