Specialty Market Update

Motorcycle & Powersports Market Update June 2021

“In what is becoming a regular occurrence, Powersports values continue to set records month after month. Just like last month, all segments except Snowmobiles are up by amounts ranging from healthy to eye-popping. Demand continues to far outpace supply for both new and used vehicles.”– Scott Yarbrough, Senior Analyst, Motorcycle & Powersports

May to June Average Segment Change in Value

Picking up right where May left off, June sees record pricing across the entire Powersports marketplace. So far, the loosening of COVID-19 restrictions, that is accelerating rapidly at the moment, is doing nothing to lessen demand for Powersports vehicles of all types. The economy is heating up, and with vaccination rates rising steadily, we are speeding our way back to normal at a rate much faster than many had expected.

Our biggest movers this month are the Utility Vehicles, up 4.4%, followed closely by the Dual Sports, up 4.0%. The Dual Sports have seen slightly smaller increases the past few months, and now appear to be catching up to the rest of the on-road segments. The water segments, Jet Boats and Personal Watercraft, are up 3.3%, not surprising considering the time of year and hot market.

Segment Spotlights & Industry News

Street Bike Performance

Street bikes continue to be in high demand as we are now firmly in the prime selling season for on-road bikes. The amazing thing is that prices never took a significant break over the winter and are running about 18% higher this year than last for the same exact bike.

ATV & Utility Vehicle Performance

The chart below shows the initial shocks to vehicle sales as much of the country shut down last spring, followed by the steep rise in prices that continues today, as dollars originally slated for sports, vacations, and other social activities started to flow into the Powersports market.

• The Motorcycle Industry Council (MIC) Retail Sales Reporting system which tallies new motorcycle retail sales from14 leading manufacturers showed a 31.4% increase in sales for the first quarter of 2021 versus the same quarter last year.
• Powersports Business reports that a research note from BMO Capital Markets analyst Gerrick Johnson observed that May retail demand for Powersports vehicles was up versus April, and that manufacturer incentives are lower versus both the same time last year, and last month.
• Inventory levels are low across the entire Powersports industry. The yearlong combination of lessened output from the manufacturers and unprecedented demand has left dealer lots seriously depleted. Many dealers are now actively prospecting their own customer bases looking for units to stock showrooms. Until the inventory situation improves, we expect prices to remain elevated.

Recreational Vehicles Market Update June 2021

“The values of used RVs sold at wholesale auctions rose across the board last month. We have been hearing from dealers around the country that consumer demand is still very high, and they have only about 25% of the used inventory that they would like. Several said that manufacturers had been raising prices on their new units, which was letting them price their used units higher as well.”– Eric Lawrence, Principal Analyst, Specialty Markets

Wholesale RV Values Reach Another All Time High

For Motorhomes (including Class A, B, and C)

• Average selling price was $64,474, up $1,507 (2.3%) from the previous month.
• One year ago, the average selling price was $36,470.
• Auction volume was up 12.7% from the previous month.
• The average model year was 2010.

For Towables (including Travel Trailers and Fifth Wheels)

• Average selling price was $22,214, up $393 (1.8%) from the previous month
• One year ago, the average selling price was $13,631.
• Auction volume was up 27.6% from the previous month.
• The average model year was 2015.

Industry Highlights

According to the RVIA, the total number of RVs shipped in April reached 51,813, the largest amount ever for the month, and an increase of nearly 620% over COVID-19 restricted April 2020. Towables totaled 46,760 units and motorhomes accounted for 5,053. Truck Campers came in at 406 units and Folding Camping Trailers reached 648.

• Lazydays reported 1Q 2021 revenue of $271 million, up $80 million (42%) from last year.
• The Consumer Confidence Index was 117.2 for May 2021, essentially the same as April.
• The RVIA reported that 56 million people plan to take an RV trip this summer.
• Statistical Surveys reported that 54,829 RVs were registered in February, an increase of 52.5% year over year.
• Camping World announced the launch of a Peer-to-Peer RV rental marketplace, marketed as Camping World RV Rentals. They also announced they have acquired two dealerships in Michigan and are building a new SuperCenter in Wyoming.
• Yogi Bear’s Jellystone Park announced they are expanding into Utah, near Zion National Park.
• The RVDA and Baird announced the results of a survey showing that RV dealer sentiment was very high in March, with a score of 80. Their three-to-five-year outlook was not quite as optimistic, coming in at 60. (Score is out of 100, anything over 50 is considered positive.)

Collectible Cars Market Update June 2021

“As we head into the summer months we are beginning to see more live events take place. Restaurants are open, ball games have people in the seats, and collectible car shows and auctions are getting back to normal. The past month saw the return of several significant auctions; they were all well attended and both the sell through ratios and combined sales totals were very impressive.”– Eric Lawrence, Principal Analyst, Specialty Markets

Auction Activity

• RM Sotheby’s returned to Amelia Island in grand fashion, selling 95 percent of their lots at the beautiful Ritz-Carlton for an impressive $42,174,340. 2021 marked their 23rd year as the official auction house of the Amelia Island Concours d’Elegance, one of the nation’s premier collectible car events. Vintage Ferraris were very popular at this year’s auction, resulting in five of the top ten sales wearing the prancing horse, but there were also outstanding examples of nearly every other genre, from vintage to late model, both foreign and domestic.
• Bonhams also recently held an auction in Amelia Island at the Fernandina Beach Golf Club. This was their first live sale in the United States since the pandemic, and the results were very good, a sell through rate of 90% and total sales of over $20 million. Four cars sold for in excess of seven figures, and one of the highlights of the sale was the Lange Collection of thirteen important Brass Era automobiles.
• Mecum’s 34th annual Original Spring Classic was held at the Indiana State Fairgrounds May 14-22. This is always a very large, multi-day event, with up to 2,500 cars expected to cross the block. This year’s auction was a huge success, with sales approaching $110 million and a roughly 83% sell through rate. Continuing the trend we have been noticing for the past several years, vehicles from several (27) private collections were available, as long time collectors continue to liquidate or thin out their holdings. Although it wasn’t the highest seller, Parnelli Jones’ Bronco Race Truck “Big Oly”, which won the Baja 1000 in 1971 and 1972, got most of the pre-event media attention, and was one of the top performers, achieving an impressive $1,870,000. Although Mecum has a reputation for selling special cars like this, a very notable “no-sale” was the 1971 Plymouth Hemi ‘Cuda Convertible, which topped out at $4.8 million. One of only three 4-speed cars (out of a total of eleven), its pre-sale estimates ran as high as $6 million.

Notable Recent Auction Sales Include:

• 1967 Shelby Cobra 427 S/C $3,300,000 (Mecum)
• 2020 Ford GT Coupe MkII (track only) in Ken Miles Livery $1,870,000 (Mecum)
• 2014 McLaren P1 Coupe $1,347,500 (Mecum)
• 2011 Ferrari 599 SA Aperta $880,000 (Mecum)
• 1929 Duesenberg Model J Torpedo Convertible by Murphy $5,725,000 (RM Sotheby’s)
• 1995 Ferrari F50 Roadster $3,772,500 (RM Sotheby’s)
• 2012 Lexus LFA $700,000 (RM Sotheby’s)
• 1934 Mercedes-Benz 500/540K Spezial Roadster $4,900,000 (Bonhams)
• 1912 Stutz Bearcat Roadster $643,000 (Bonhams)
• 2019 Porsche 911 Speedster $412,000 (Bonhams)

Market Trends

The Vintage Muscle Car segment represents high performance cars from American Motors, Ford, General Motors, Dodge, and Plymouth produced from the mid-1960s through the early 1970s. A few representative examples would be American Motors AMX 390, Buick GS400/GS455, Chevrolet Chevelle SS396, Dodge Charger R/T, Ford Torino Cobra 428CJ, Oldsmobile 4-4-2, and Pontiac GTO. Some Pony Cars with big block engines, such as Hemi ‘Cudas, Challenger R/T 440s, SS396 Camaros, and Pontiac Trans Ams will also cross over into this category. After dipping in the latter part of 2017, muscle cars have been on a general upwards trend as similar new cars being sold currently have rekindled interest in the segment.

The changes by vehicle segment type were mixed this past year. Muscle Cars, Pony Cars, and Trucks all increased, while American Classics, European Sports Cars, and Vintage Exotics declined. The drop in Sports Cars values is not as dramatic as it looks at first glance; they had spiked during the last few years but are now settling down as prices return to a more normal level. American Classics dropped because of a generational shift in the hobby, favoring newer vehicles, and older Pickups/SUVs continue to be very popular.

Medium and Heavy-Duty Truck & Commercial Trailer Market Update June 2021

“We continue to have delays in production due to supply chain issues. There are not enough trucks, nor commercial trailers to keep up with freight and construction demand. There are also not enough drivers and operators to occupy the units that are available to haul freight. This will cause continued strength in pricing on both the new and used side through the remainder of 2021.”– Josh Giles, Principal Automotive Analyst, Vehicle Valuations & Residuals

Commercial Truck Market Update

Heavy-Duty Trucks

• The chart above shows the monthly adjustment trends for each segment within the Heavy-Duty market.
• Continued improvements in freight demand mixed with limited inventory on new and used trucks remain the driving forces behind the price increases.
• We are seeing continued strength in all segments, but especially Regional and Over the Road tractors.
• Since the beginning of this year highway tractors have increased an overall weighted average of 15.4%.
• Heavy-Duty Construction units remain stable; however, we have not seen as much of an increase in this segment compared to road tractors and medium duty trucks.

Medium-Duty Trucks

• The chart above illustrates the monthly adjustment trend for Medium Duty trucks.
• We continue to see price increases in all Medium Duty truck classes thanks to slow production and increased demand.
• Since the beginning of this year Medium Duty Trucks have increased an overall weighted average of 16.2%.
• Dry vans and box trucks have grown in demand as production delays continue to limit the number of new trucks being delivered
• Due to the production delays, fleets are keeping their units in service longer, which equates to higher mileage, lower condition units being sold at auction.

Retail Sales and Freight Demand

• Supply chain issues are having a large impact on the commercial market because not only do you need microchips, tires, seat foam, and different metals/materials to build commercial trucks and trailers, these units are necessary to ship all of these goods from one place to another.
• According to data gathered from the Federal Reserve Economic Data (FRED), new retail sales dropped 15% from March to April of this year. The month prior new retail sales grew 38%. The reduction in new retail sales from March to April is due to the microchip shortage.
• According to the ATA Truck Tonnage Index, overall freight has taken another monthly decline due to a shortage of drivers and equipment. We haven’t seen Truck Tonnage numbers this low since June of 2017.
• New and Used truck values will continue to slowly rise through the rest of this year. We are expecting a slow recovery, so prices will remain stable through the first half of 2022.

Commercial Trailer Market Update

• Commercial Trailer values have been on an upward trend since August of 2020 due to production shortages and strong frieght demand.
• Our team is currently analzying the most recent auction data and retail transactions to make another round of value increases in the coming weeks.
• Since the beginning of the year Dry Vans have increased 16.1%, Refrigerated Vans have increased 8.4%, Lowboys have increased 3.2%, and Dump Trailers have increased 2.8%.
• These numbers are amazing when you consider that by this time last year Dry Vans had deprciated 9.0%, Refrigerated Vans were down 13.1%, Lowboys were down 2.7%, and Dump Trailers had deprciated 9.1%.
• Recent auction and retail sales figures indicate that this market will continue on an upward trend through the remander of this calendar year as commercial trailer production slows and freight demand grows.