Accelerating Through the EarlyPandemic Period Many motorsports dealerships

Accelerating Through the Early-Pandemic Period § Many motorsports dealerships had to close their doors with the onset of the pandemic. The approximately 1, 700 US motorcycle dealers utilizing the CDK Lightspeed Dealership Management System (DMS) reported March 2020 major unit sales decreased 19. 7% YOY. § By April, the YOY major unit sales decrease was only 0. 02%, but then May was an unprecedented, positive month, with many dealers reporting the best May ever, even with customer appointments only and reduced staff. § During the summer, the youth market was particularly robust, adding to a 51. 2% YOY increase for same-store revenues for 1, 626 dealerships using the CDK Lightspeed DMS.

Still in Top Gear During Late 2020 § After a 53. 5% YOY increase of major units sales during June and 32. 7% during July at the 1, 651 dealerships using the CDK Lightspeed DMS, August major unit sales moderated to a 12. 5% YOY increase, which almost every dealer would welcome during a “normal” year. § With warmer weather in the Northeast, dealers there led major unit sales during August 2020 at +17. 5% YOY after just a 7. 5% YOY increase during the January–May period. All the other regions had double-digit major unit sales increases, except the West at +5. 4%. § During November, the parts category increased sales the most YOY: +17. 7% across the US, +18. 6% Northeast, +22. 2% South, +9. 8% Midwest, +17. 8% West and +22. 0% Northwest.

Some Manufacturers Are Profitable, Others Still Recovering § Major manufacturers in the motorsports industry had to shut plants or reduced work time initially, which resulted in some inventory issues for dealers during the summer months. Nonetheless, Polaris reported a 15% YOY increase for Q 3 2020 North American retail sales. § BRP reported a 1. 9% YOY increase of Q 3 revenues and a 16% YOY increase of Q 3 North American powersports vehicle sales. Harley-Davidson’s Q 3 revenues decreased 8% YOY, shipments -6% YOY and retail motorcycle sales -25% in Canada and -10% in the US. § Yamaha’s Q 3 performance was equally disappointing at -7. 2% YOY, but an improvement from the -15. 8% YOY for the first nine months of its fiscal year. Increasing sales of outdoor recreational vehicles in North America has led the recovery.

ATV Market Insights § Although based on pre-pandemic research (3/1/19– 2/29/20), a CDK Global Recreation study found most ATVs (67%) are purchased at Lightspeed DMS dealerships in the South or Midwest and a vast majority (87%) of these dealerships sell new ATV models. § While dealerships in the South region had the largest ATV unit count sold/year or 130, Midwest dealerships had the largest average accessory dollars spent or $685, compared to $611 West, $585 Northeast, $514 South, $421 Northwest and $168 California. § The top three accessory categories, and representing almost 75% of all sales, were body 25%, plow 24% and winch 23%, with tires 7%, control 5% and wheels 5%.

The Motorcycle Crowd § According to The Media Audit’s 60 -Market 2020 Aggregate Survey, the average of adults whose household owns a motorcycle was 42. 5, with the average among women 18+ slightly more than men 18+, or 42. 9 and 42. 0, respectively. § By generation, the data reveals 34. 9% of the 6. 6% of adults 18+ whose household owns a motorcycle were Millennials, 35. 0% Generation X and 21. 9% Baby Boomers, with younger Boomers 7. 1% and older Boomers 14. 8%. § Latinx American adults 18+ are 25 points more likely to live in a household that owns a motorcycle than Caucasian American adults 18+. African Americans are 22 points and Asian Americans 37 points less likely than Caucasian Americans.

Motorcyclists and Media Use § Adults 18+ whose household own a motorcycle have considerable daily exposure to four media: the Internet (97. 2%), outdoor (96. 1%), social media (93. 4%) and TV (92. 0%), but less so to direct mail (82%), radio (78. 9%) and newspaper (53. 9%). § The largest percentages watched the NFL on TV during the past 12 months (31. 2%) and the Super Bowl (21. 1%), followed closely by MLB (20. 5%) and the NBA (18. 3%). They are 79 points more likely to watch NASCAR/Indy Car/Auto Racing than the total target audience. § The largest percentages of adults 18– 34 and 35– 49 logged on You. Tube during the past month, or 77. 8% and 77. 4%, respectively. Among adults 50+, Facebook garnered the largest share or 76. 5% and You. Tube second at 70. 6%.

Advertising Strategies § As the pandemic continues to dissipate, motorsports dealers can maximize additional sales with robust ad campaigns, utilizing TV to boost their brand the digital channel to attract more younger adults. § Dealers will also benefit from campaigns specifically targeting Latinx Americans as they are more likely to own a motorcycle than other ethnic groups. Plus, multiple sales to other family members are possible as they tend to participate in activities and travel together. § Based on The Media Audit data on slide #7, motorcycle owners are much more likely to watch auto racing on TV than the total audience, providing another efficient and effective programming to reach motorcycle enthusiasts.

New Media Strategies § With outdoor activities serving as an escape during the pandemic, ask customers and other motorsports enthusiasts to post short videos on social media relating how important being able to ride has helped to reduce stress. § With so many motorsports units sold during 2020, dealers have an opportunity to sell many parts and accessories during 2021. Use social media to promote weekly specials and have employees host short explainer videos of new products and post to social media. § Adults 50+ are regular visitors of You. Tube almost as much as Millennials and Gen Xers, and many are becoming influencers. Dealers can incentivize one or more customers in this age group to serve as their influencers, posting content about their motorsports life.