Inventories at historic lows, installation of missing parts on products in workshops and deliveries over longer periods: the enthusiasm for recreational vehicles since the start of the pandemic and the supply difficulties are reflected in the dealerships, where almost everything is sold several months in advance.
A consumer looking for a new snowmobile risks returning empty-handed. For a personal watercraft, in many cases, most models are already sold even if the white carpet has not yet settled in the four corners of Quebec.
Press has reached out to dealers in recent weeks.
“We didn’t have a lot of snowmobiles to sell this fall,” says Alain Carrier, president of Performance NC, owner of seven BRP brands, on the phone. I’m not sure we have any left at this time of year. The time of the sale has moved. It’s more work for us. ”
Recreational vehicles have served as a loophole for many consumers since the onset of the health crisis, which has been accompanied by numerous restrictions on travel.
PHOTO DAVID BOILY, PRESS ARCHIVES
BRP factory
While manufacturers of snowmobiles, personal watercraft, ATVs and side-by-side vehicles like BRP have benefited greatly, they are struggling to meet demand.
They are not immune to the shortage of semiconductors, components that are found in electronic chips essential to the operation of certain modules.
As a result, almost everything is sold in advance at dealerships, who have to complete assembly of vehicles in their workshops because dials, sensors and other electronic parts are missing upon receipt.
“The workshop is operating at 110%,” says Simon Constantineau, vice-president of the F. Constantineau dealership in Mont-Laurier.
He explained that about 2% of the snowmobiles that were to be delivered by BRP would arrive later than expected, in February. This has prompted customers to cancel their orders due to delays, but cases have been very rare, Constantineau said.
“We will sell all our orders”
Before the pandemic, about 20% of personal watercraft were sold through pre-orders at Claude Ste-Marie Sports, in Saint-Hubert, in the southern suburbs of Montreal.
This time, they should be very rare by the time the season begins, underlines its vice-president, Luc Marchand.
Closing the sale is much less of a factor. We know that we will sell all of our orders. In the end, I would have done without. It is as much effort, if not more.
Luc Marchand, vice-president of Claude Ste-Marie Sports
At Performance NC, Mr. Carrier estimates that between 60% and 70% of personal watercraft stocks have been reserved within his network.
“Last year, around April, all of our personal watercraft were sold,” he says. I believe it will look like this again. ”
A break on the brakes
BRP has been going at full speed since the start of the pandemic.
The Valcourt-based company posted record results after the first nine months of its fiscal year. However, in the third quarter ended October 31, the multinational saw its profits and revenues decline, as supply problems hampered its ability to replenish inventory at its dealers.
Despite an improvement seen in semiconductors, it is difficult to get around some logistical challenges, said BRP President and CEO José Boisjoli on Wednesday during a conference call with financial analysts.
It’s always difficult with the high Christmas season. As you know, there is a shortage of containers, boats… all of this is creating disruption.
José Boisjoli, President and CEO of BRP
The current context affects all product categories at BRP, affirms Mr. Boisjoli. Dealers can now accept pre-orders for ATVs, but with a manufacturer’s recommendation.
“We said to only sell the units that have been allocated,” said the president of BRP. Currently, dealers know how many ATVs they will receive in December, January, and February. They are authorities to sell these units. ”
A game of balance
All dealers reached by Press estimated that in the circumstances, BRP “delivers the goods”, even if they must inform certain customers that they will have to wait a little longer than expected to get their recreational vehicle.
Would they like to receive more units, since the demand is high?
“There is always a fine line between having enough and having too much,” says Carrier. Rather than flooding the market, everyone is happy. In addition, in [le marché d’occasion], customers benefit. When they sell their vehicle, they get a good price. ”
In addition, the market will sooner or later “take a stand”, estimates the president of Performance NC. We must therefore find a balance so as not to “fall from a height” if this rebalancing occurs.
BRP in the third quarter
- Revenue: 1.59 billion (- 5%)
- Net profits: 127.7 million (- 36%)
- Adjusted operating profit: 251.7 million (- 28%)
- Toronto Stock Exchange close stock price: $ 98.72 (- $ 2.24, or 2.2%)
44%
Percentage decline in inventory at BRP dealers at the end of the third quarter, compared to a year ago.
Source: BRP