The Warranty Group has been operating in the powersports industry across various parts of the world for nearly 25 years. In North America, the majority of our business is sourced directly through manufacturer and aggregator partnerships where we provide mechanical repair service contracts, guaranteed asset protection, theft protection, pre-paid maintenance plans and tire and wheel coverage.
How do you define powersports products – which kind of vehicles do you include?
While there has been some level of variation over the years, in our definition of a “powersports” vehicle, driven by the product application or a regulatory requirement, we traditionally have defined powersports to include all-terrain vehicles, utility vehicles, motorcycles, scooters, snowmobiles and personal watercraft.
How has the powersports market changed in the last 6-12 months?
2012 showed a slight increase over 2011 in terms of sales of motorcycles and all-terrain vehicles, but the past 12 months, however, have shown mixed sales results, with continued increases in new categories such as higher powered utility vehicles and side-by-sides. We have experienced continued growth with several of our partners due to a heightened focus on point of sale penetration. While the finance & insurance process as we think of it in the automotive industry is still underdeveloped within powersports as a whole, the dealers who have made it a priority have seen improvement and income gains.
Where do you see the powersports category as a whole going in 2014?
We believe the powersports industry will continue to expand and experience growth through 2014. Additionally, we believe as dealers continue to emphasize parts and accessories at point-of-sale, that manufacturers and third parties will create new products to cover these additional items that would typically fall outside the scope of a traditional service contract's coverage. We will also continue to watch how the evolution of electric motors and comparable technology may impact the industry in 2014 and beyond.
What are the top products for powersports today? How will that change in the next 12 months, if at all? Why?
We offer several ancillary products for powersports, however, mechanical repair service contracts still comprise the majority of our sales and revenue, as this is the main product offering proposed at the point of sale. Our expectation is that, so long as the finance & insurance process remains relatively concentrated to a smaller dealer universe, this will continue as a general rule, though we do see additional ancillary parts and accessory coverages making an entry, and potentially an additional emphasis on pre-paid maintenance.