Motorcycle and Powersports Market Update
“All Powersports segments are down this month as pricing continues its recent downward trend. Mixed economic news coupled with increased new unit supplies from the manufacturers are finally bending the supply and demand curve back towards historical norms. Prices are still higher than they would otherwise be, but we expect them to continue decreasing in the near term.”– Scott Yarbrough, Senior Analyst, Motorcycle & Powersports
September to October Average Segment Change in Value
The large swath of red in the chart above shows something we have not seen in a while, the entire Powersports market declining by significant amounts. While manufacturers are finally ironing out the remaining supply-chain issues and increasing new unit production, economic headwinds in the form of inflation and higher interest rates are having a cooling effect on the broader economy. This is leading to prices dropping across the board. Of particular note is the fact that the off-road segments, which have historically been strong performers at this time of year, have also dropped by 2 to 3 percent as well. We will be keeping a close eye on these segments to see if they rebound a bit next month or continue to decline as we head deeper into fall. Despite this, overall prices remain elevated versus historical norms.
Segment Spotlights & Industry News
Street Bike Segment Performance
Street Bikes are performing very similar to last year. This pattern of steady increases from spring to mid-summer, followed by declines as we head towards fall, is the typical seasonal pattern street bikes and other on-road vehicles have followed for years prior to the pandemic. The biggest difference from last year to now is that prices continued to increase or hold steady through September last year before dropping, while they peaked earlier in July this summer.
ATV & Utility Vehicle Segment Performance
The ATVs and Utility Vehicles, unlike the Street Bikes to the left, are behaving differently this year versus last. They did not rise in value as much or as consistently during the warm weather months, and they have been dropping earlier and by larger amounts this fall versus last. Reflecting growing inventories and tougher economic conditions, we expect recent downwards trends to continue over the next few months, though volatility in this segment has been higher than normal this year.
- Powersports Business recently surveyed dealers to see how they are doing versus their own internal business plans, with 55% being either on or above plan, and 45% below plan. This compares to July where 66% reported they were either on, or above plan, an 11% drop.
- The Federal Reserve has signaled at its latest meeting that they are on a path to continue raising interest rates even after September’s 75 basis point increase. At least one more increase is expected before the end of the year, which will likely further cool the economy.
- The Motorcycle Industry Council (MIC) and other trade organizations joined together to lobby the Office of the United States Trade Representative to renew existing exclusions on tariffs for Chinese products brought into the US. Many powersports parts and products are included in these tariffs. The existing exclusions are set to expire soon, and with current inflationary pressures and supply chain issues ongoing, providing relief for consumers is a top priority of the MIC and other industry groups.
Collectible Cars Market Update
“Fall used to be a time of year when auction activity slowed down a little as everyone was beginning to think about heading out to Arizona for the Scottsdale auctions in January, but this year there are several more auctions left on the schedule, as well as several daily online auctions. Recent results have been strong, even with the growing concern about the economy and the possibility of a prolonged recession.”– Eric Lawrence, Principal Analyst, Specialty Markets
Bonhams’ recent Zoute sale was their tenth auction held in conjunction with the Zoute Grand Prix in Knokke-Heist, Belgium. This year’s event was quite successful, producing their best ever sales results for this venue, coming in at roughly $25 million with a 95% sales rate. Eight vehicles sold for seven digits, including a BMW 507, a Mercedes-Benz Gullwing, a Ferrari Lusso, a Lamborghini Miura, and a pair of more modern exotics, a Mercedes-Benz SLR and a Porsche Carrera GT.
Mecum continued an excellent 2022 with their Dallas Auction, held over the course of four days. Total sales were $55.2 million with a sell through rate of 84%. This bested their previous Dallas record by over 50%, with the number of consignments increasing by 45%. Most of the top sellers were vintage muscle cars, but as usual, full classics and exotics were well represented. Their Elmer’s Auto and Toy Museum auction, held in Fountain City, Wisconsin, brought in $8.5 million in total sales, which was significantly above most pre-sale estimates.
RM Sotheby’s Gene Ponder Collection auction, held at his estate in Marshall, Texas, was a huge success, with nearly $25 million in sales and a perfect 100% sales rate. Over the course of the three-day auction, over 1,100 vehicles and pieces of automobilia crossed the block and found their way to new owners, with two of the vehicles selling for seven figures. Their Hershey sale, held during the AACA Fall Meet, is one of the high points on the auction calendar for pre-war vehicles. Initial reports have sales topping $10 million with a 90% sell through rate.
Notable Recent Auction Sales Include:
- 1957 BMW 507 Series 1 Roadster $2,000,000 (Bonhams)
- 1955 Mercedes-Benz 300SL Gullwing $1,335,000 (Bonhams)
- 1963 Ferrari 250 GT/L Lusso $1,650,000 (Bonhams)
- 1970 Lamborghini Miura P400 $1,080,000 (Bonhams)
- 1970 Chevrolet Chevelle SS396 Hardtop $242,000 (Mecum)
- 1959 Chevrolet Impala Convertible $121,000 (Mecum)
- 1969 Dodge Daytona Coupe 440/375 $418,000 (Mecum)
- 1960 Mercedes-Benz 300SL Roadster $1,595,000 (RM Sotheby’s)
- 1938 Bugatti Type 57SC Atlantic Recreation $1,155,000 (RM Sotheby’s)
- 1967 Ferrari 330 GTC by Pininfarina $797,500 (RM Sotheby’s)
- 1957 BMW 507 Roadster Courtesy of Bonhams
The Vintage Exotic segment focuses on high dollar European exotic sports cars produced from the late 1950s up through the mid-1970s. This is without a doubt the top end of the market. This segment includes Ferrari 250s, 275s, and 365s, Lamborghini Miuras, Maserati Ghiblis, Mercedes-Benz Gullwings, Porsche Speedsters, and coach-built Bentleys and Rolls-Royces. Although most owners of these vehicles are wealthy individuals with a lot of disposable income, the market can still be very volatile and fluctuates quite a bit as these models fall in and out of favor, sometimes being seen as a safe haven in which to park money and other times as an out-of-touch extravagance. Values have been generally increasing for about a year, with some more desirable models rising faster than others. Limited production “modern” exotics, such as Ferrari F40s and F50s, have been very hot.
All of the collectible vehicle market segments we track increased in value during the past year, including Muscle Cars, Pony Cars, Post War American Classics, European/Asian Sports Cars, and Classic Trucks & SUVs. The collectible market has been very strong for well over a year now, and most of the recent auctions have produced impressive results. The economy is still a big question mark. Some indicators are pointing up, some are pointing down, and the only thing the economists can agree on is that they don’t agree with each other. As of early October, the stock market has been hit pretty hard, primarily due to fears of a prolonged recession and elevated interest rates, but there is no real consensus within the industry on what that will do to collectible car values. Some say that prospective buyers will be afraid to spend money in an uncertain economic environment, and others say that money will flow into tangible assets that seem to offer a safe haven from the unpredictable stock market. There are several more physical auctions coming up before the end of the year, and online auctions daily, and we’ll be watching them all closely to see which direction the market is heading.
Recreational Vehicles Market Update
“The average sales prices for motor homes and towables sold at wholesale auctions decreased last month, while auction volume increased to more typical levels. Various RV organizations reported that both manufacturer shipments and retail sales are down on new units, so it is very likely that as they become more available and dealers begin to discount, used RV values will follow suit.” – Eric Lawrence, Principal Analyst, Specialty Markets
Wholesale RV Values Decrease While Volume Increases
- For Motorhomes (including Class A, B, and C):
- The average selling price was $69,003, down $10,665 (13.3%) from the previous month.
- One year ago, the average selling price was $69,953.
- Auction volume was up 23.3% from the previous month.
- The average model year was 2011.
- For Towables (including Travel Trailers and Fifth Wheels):
- The average selling price was $20,532, down $689 (3.2%) from the previous month.
- One year ago, the average selling price was $24,280.
- Auction volume was up 10.1% from the previous month.
- The average model year was 2016.
According to the RVIA, the total number of RVs shipped in August was 33,783, a decrease of 36.0% from August 2021. Towables totaled 28,026 units (21,417 TT / 5,509 FW) and Motorhomes accounted for 5,757. Class B motorhomes (Van Camper) ended the month with 1,651 shipped, Class A’s (Conventional) totaled 1,294, and Class C’s (Mini) finished with 2,812. Truck Campers came in at 430, Folding Camping Trailers reached 670, and Park Models totaled 446.
- Kampgrounds of America (KOA) reported a 310% increase in “glamping” over the past ten years.
- Statistical Surveys, Inc. reported that there were 41,535 RV registrations in July 2022, down 28% from 2021.
- Thor announced fiscal fourth quarter net sales of $3.82 billion, with annual sales of $16.31 billion.
- Dutchmen RV celebrated their 35th anniversary.
- Nearly 50,000 people attended the 2022 Hershey RV Show.
- The 2022 Elkhart RV Open House was held the last week in September.
- German RV manufacturer Hymer has put the solar powered Venture S into production.
Medium and Heavy-Duty Truck & Commercial Trailer Market Update
Commercial Truck Market Update
“The Medium and Heavy-Duty Truck and Commercial Trailer market continues to fall as more new and used inventory becomes available. However, we’ve seen a slight reduction in the overall depreciation rate compared to September. We have noticed an increase in the number of units available at auction and online, which is having a direct impact on transaction prices. As we enter the final months of 2022, we expect to see continued softening in used prices as new truck shipments are expected to remain consistent for the remainder of the year.”– Josh Giles, Principal Automotive Analyst
- Above we see the overall weighted monthly value adjustments for Medium-Duty units in classes 3 through 6. (2019-2020)
- Heading into October, late model, Medium Duty truck values fell an overall weighted average of -3.0% ($1,955).
- Overall, values for medium duty units rose 39.6% from September of 2020 to April of 2022.
- Since April, Classes 4-6 began falling towards the end of March of this year. New truck deliveries are improving allowing fleets to release some of their aging fleet to the secondary market resulting in a combined drop of -15.9% ($10,956).
- We will likely continue seeing a bit of softening in values over the next couple of months as new trucks slowly help release some of the air in the market.
- Since April of this year, Class 4 trucks have fallen a combined -8.0%.
- Since April of this year, Class 5 trucks have fallen a combined -19.0%.
- Since April of this year, Class 6 trucks have fallen a combined -18.0%.
- Since April of this year, Class 7 trucks have fallen a combined -17.0%.
Heavy-Duty Trucks and Tractors
- The chart above illustrates the average monthly adjustments for Heavy-Duty Trucks and Road Tractors within classes 7 and 8 (2019-2020).
- Despite the recent drops in values, truck prices are still much higher than they should be. Prior to May of this year, Construction/Vocational units increased 34.8% ($37,925), Regional Tractors increased 41.1% ($33,713), and Over-the-Road Tractors increased 37.0% ($31,229).Commercial Trailer Market Update
- Commercial Trailer values dropped heading into the final quarter of 2022.• Much like commercial trucks, we expect to see continued depreciation in commercial trailers as more new and used inventory becomes availed.