BLACK BOOK Specialty Market Insights
Motorcycle & Powersports Market Update
“The news is full of impactful, interesting, and frequently contradictory stories these days. From just the last week alone: inflation has slowed a bit from the torrid pace we have seen recently, gas prices are near all-time highs, and unemployment is the lowest it has been in roughly 50 years. For Powersports, the situation is not that much different. Global supply chains remain under strain, causing continued disruptions in new unit shipments. At the same time, increasing interest rates and an uncertain economic future are gradually lessening demand for Powersports vehicles leading to more mixed changes among the segments again this month.” – Scott Yarbrough, Senior Analyst, Motorcycle & Powersports
April to May Average Segment Change in Value
The Personal Watercraft and Jet Boats are once again our hottest segments, seeing increases of 4.1% and 4.9%. Both new and used units are in strong demand as the weather turns warmer and manufacturers struggle to meet demand. The rest of the segments are an interesting mix of changes. Cruisers are down 1.0%, with the Domestics barely dropping, while the Metrics are down 1.6%. At the same time, the Street bikes are up 1.3%. It is important to note that all segments are still at historically elevated levels regardless of the monthly changes.
Segment Spotlights & Industry News
Cruiser Segment Performance
The Cruisers are an interesting segment this month, not only are they down as a group when they would normally be increasing in value, the Metrics and Domestics are distinctly different as well. The overall segment is down 1.0%, with the Domestic V-Twins having barely changed from last month’s values, while the Metrics are down 1.6%. Contrast this to last year when the entire segment was up over 5.0%. Overall values are still historically high for the segment though.
ATV & UTV Segment Performance
In contrast to the Cruisers, the ATVs and Utility Vehicles are behaving a bit more as we would expect them to at this time of year. Unlike 2021, where they were on a constant upwards trajectory, this year they are merely holding their own, or even depreciating a bit over the past few months, as this is their weakest part of the year. Like all other segments though, overall pricing levels are still significantly elevated, a condition we expect to continue throughout 2022.
- Harley-Davidson announced that their Hardwire restructuring program is going according to plan, and they are further enhancing it with a Stage II update. The Motor Company continues to forecast revenue growth of 5-10% for this year, and is additionally forecasting an average annual growth rate of 5-7% for the 2021 to 2025 time period. Capital expenditures are expected to be $250-300 million annually by 2025.
- Polaris has increased retail pricing levels across all areas of its product lineup as a result of supply chain cost inflation. They are not the only manufacturer to do so; Can-Am, Kawasaki, and Yamaha have also increased the MSRPs of many of their off-road vehicles mid model year.
- Interest in on-road motorcycles is considerably higher than pre-pandemic levels as reported by PowerSports Business. Quoting user surveys and website lookup statistics from Cycle Trader, interest in street bikes is up 82% from Q1 2019 to Q1 2022, while dealer-buyer connections are up 101%. Additionally, 77% of people said they wanted to make a purchase fairly soon, and 66% reported they planned to pay cash.
Collectible Cars Market Update
“Last month we commented that Russia had invaded Ukraine, a new Coronavirus variant was making the rounds, gas prices were through the roof, inflation was at a forty year high, and the Fed had been raising interest rates. Well, this month we can add that the stocks have dropped quite a bit, nearing bear market territory. As of now the collectible market remains strong, but we’ll be watching carefully to see if any changes are looming.” – Eric Lawrence, Principal Analyst, Specialty Markets
- Worldwide Auctioneers’ second annual The Enthusiast Auction was held April 22-23 at their Auburn, Indiana headquarters. Hundreds of pieces of automobilia were offered, as well as about 60 classic automobiles, with approximately 50 selling. Worldwide announced that their overall sales rate was 90% with total sales of over $5 million. The Enthusiast Tour, a three-day driving event in Indiana, was held prior to the auction.
- H&H Classics’ Auction at the Pavilion Gardens saw total sales of just under $2 million with a sell through rate of 72%.
- Mecum is off to quite a start in 2022, with sales of well over $300 million, including $217 million in Kissimmee, Florida; $34.5 million in Houston, Texas; $66.3 million in Glendale, Arizona; and $22 million at their vintage motorcycle sale in Las Vegas, Nevada. Next on the agenda is the 35th annual Original Spring Classic, their flagship auction, which will be held May 13-21 at the Indiana State Fairgrounds in Indianapolis. This is always a huge event – this year they are expecting 3,000 vehicles and 2,400 pieces of memorabilia. With that many vehicles there are bound to be dozens of highlights, but a few that stand out are a variety of Ford GT supercars, several vintage Shelbys (both Mustangs and Cobras), a selection of historically significant Corvettes and Muscle Cars, late model Exotics, and 32 race cars from the personal collection of the legendary NASCAR Hall of Fame Crew Chief Ray Evernham.
- Online auction site Bring A Trailer, which rose to prominence during the pandemic lockdowns, has continued to thrive even as travel restrictions and bans on public events have been lifted. They offer a wide selection of vehicles daily, ranging from affordable entry level collectibles to high-dollar vintage exotics. Their community comments section is particularly helpful and there is often very interesting dialog between bidders and sellers.
Notable Recent Auction Sales Include:
- 2017 Ferrari LaFerrari Aperta $5,360,000 (Bring A Trailer)
- 1988 Lamborghini Countach 5000 QV $620,000 (Bring A Trailer)
- 1985 Renault R5 Turbo 2 Coupe $156,000 (Bring A Trailer)
- 2008 Alfa Romeo 8C Competizione Coupe $351,000 (Bring A Trailer)
- 1987 Buick GNX Coupe $225,000 (Bring A Trailer)
- 1974 Lotus Europa Twin Cam Special $31,250 (Bring A Trailer)
- 2003 BMW Z8 Alpina Roadster $350,000 (Bring A Trailer)
- 1964 Ferrari 330 GT 2+2 Series 1 Coupe $285,000 (Bring A Trailer)
- 2008 Dodge Viper SRT-10 ACR Coupe $112,360 (Bring A Trailer)
- 2020 Ford Mustang Shelby GT350R Coupe $117,000 (Bring A Trailer)
- 2017 Ferrari LaFerrari Aperta Courtesy of Bring A Trailer
The Vintage European/Asian Sports Car segment represents classic “sports cars” in the purest sense of the word. Although most immediate post war European and Asian vehicles were strictly utilitarian, a few lighter hearted enthusiast-type vehicles were part of the mix. As Europe and Asia continued to recover and rebuild in the late 1950s and 1960s, manufacturers expanded their sports car offerings. This genre would include MGs, Alfa-Romeos, Triumphs, Porsches, sporty Datsuns, Jaguars, BMWs, and many Mercedes-Benz models. These vehicles are really considered to be “timeless”, as their appeal spans multiple generations. The market has its peaks and valleys, but for the most part is very stable. After declining from late 2020 thru mid 2021, this segment has stabilized and even started to increase in value, seeing gains in each of the last four reporting periods.
All of the collectible vehicle market segments we track increased in value last month, including Muscle Cars, Pony Cars, Post War American Classics, European/Asian Sports Cars, Vintage Exotics, and Classic Trucks & SUVs. The market has been very strong for the better part of a year now, but we are keeping our eyes on several global situations that may impact the market in the next few months, including the war in Ukraine, inflation, the stock market, and the possible return of Covid. We commented a few months ago that one of the factors driving up collectible vehicle values was the shortage of new vehicles and the resulting jump in values of both new and used cars and light trucks. This situation shows no sighs of letting up, so consumers may continue to turn to collectible vehicles as their primary transportation. The stock market is a trickier question…on one hand as the market falls people have less overall wealth and may not feel as comfortable spending tens of thousands on a collectible vehicle, but on the other hand collectible vehicles are a tangible asset that they can see and touch, as opposed to an investment that they have absolutely no control over. We’ll be watching the physical collectible vehicle auctions and online sales venues carefully to see what effects the economy has on collectible vehicle values.
Recreational Values Market Update
“The volatile performance of the stock market and less than ideal economic reports in recent weeks have many consumers saying they are worried about their finances in the upcoming year, but the dealers we have spoken to continue to report strong sales and good showroom traffic. Last month we saw motorhome values rise slightly, which was offset by towables dipping a little.” – Eric Lawrence, Principal Analyst, Specialty Markets
Wholesale RV Values Mixed But Volume Up Across The Board
For Motorhomes (including Class A, B, and C):
- The average selling price was $76,418, up $86 (0.1%) from the previous month.
- One year ago, the average selling price was $62,967.
- Auction volume was up 6.7% from the previous month.
- The average model year was 2007.
For Towables (including Travel Trailers and Fifth Wheels):
- The average selling price was $20,361, down $577 (2.7%) from the previous month.
- One year ago, the average selling price was $21,821.
- Auction volume was up 8.2% from the previous month.
- The average model year was 2016.
According to the RVIA, the total number of RVs shipped in March was 64,454, an increase of 18.7% over March 2021. Towables totaled 58,902 units (45,707 TT / 11,803 FW) and Motorhomes accounted for 5,552. Truck Campers came in at 525, Folding Camping Trailers reached 867, and Park Models were 379. Class B motorhomes (Van Camper) ended the month with 1,691 shipped, Class A’s (Conventional) totaled 1,453, and Class C’s (Mini) finished with 2,408.
- Lazydays reported net income of $28.3 million for Q1 2022, up $19.4 million (37.3%) over 2021.
- Statistical Surveys, Inc. reported that there were 31,344 RV registrations in North America in February 2022, down 17.8% from 2021.
- Camping World reported first quarter 2022 revenue of $1.7 billion, up $104.6 million (6.7%) over 2021.
- The National Average Gas Price for the first week of May was $4.27, up $1.33 over last year.
- RV Retailer has acquired dealerships in South Carolina and Virginia, growing their state count to 30 with 96 overall locations.
- KOA (Kampgrounds of America) reported that 57 million households camped in 2021, a new record.
- The annual National Go RVing Day, celebrated the second Saturday of June, will be held on June 11th.
Medium & Heavy Duty Trucks and Commercial Trailers Market Update
“Overall, prices for Medium and Heavy-Duty Trucks began to decline and has continued that trend for the past couple of weeks. Supply chain issues continue to disrupt new production, which will help soften the rate of decreases over the remainder of the year. Exports from China will continue to impact production for at least 12 months. This impact may cause the US market to remain stronger than we had previously anticipated as global production slows.” – Josh Giles, Principal Automotive Analyst
The chart above illustrates monthly adjustment amounts for Medium-Duty cab/chassis units in classes 3 through 6 for model years 2011-2018.
Heading into May, Medium-Duty truck values between 2011 and 2018 were relatively unchanged, registering a +0.0% overall weighted change compared to the $663 (-1.7%) increase seen the month prior.
Over the past twelve months Medium-Duty units (2011-2018) have increased $8,449 (+27.0%), from an overall weighted average of $26,867 to $39,256.
Over the past decade Medium-Duty truck values (4-10 year old) have increased $24,289 (+110.9%), from an average of $18,001 to an average of $39,256.
Heavy-Duty Trucks and Tractors
- The chart above illustrates the average monthly adjustment amount for Heavy-Duty Trucks and Road Tractors within classes 7 and 8 (2011-2018).
- From April to May, Construction/Vocational Units increased an overall weighted average of $1,825 (+2.1%) compared to the $2,464 (+3.0%) increase seen the month prior.
- Over-the-Road units increased an average of $165 (+0.3%) heading into May, compared to the $1,696 (+3.0%) average increase seen the month prior.
- Regional Tractors followed a similar trend, increasing an average of $148 (+0.3%) from April to May, compared to the $1,651 (+3.2%) average increase seen the month prior.
Commercial Trailer Market Update
- Commercial Trailer values continue to increase as freight demand increases and New and Used Commercial Trailer inventory becomes more scarce.
- Dry Van values (2017-2021) have increased $10,751 (+37.6%) since the beginning of 2022.
- Dump Trailers values (2017-2021) have increase $2,383 (+5.4%) since the beginning of 2022.
- Refrigerated Van values (2017-2021) have increased $8,850 (+18.5%) since the beginning of 2022.
- Lowboy Trailer values (2017-2021) have dropped $500 (-0.7%) since the beginning of 2022.
Retail and Freight Demand
- According to Federal Reserve Economic Data (FRED), new retail sales for Commercial units in classes 4 through 8 were reported at 34,863 units in March of 2022. This is up 2,593 units from February.
- We expect to see these retail sales figures stabilize and slowly begin to increase towards the fourth quarter of 2022.
- ATA Truck Tonnage is one of the many leading indicators when it comes to the strength and stability of the trucking and freight industry.
- In February of 2022, ATA Truck Tonnage was reported at 115.1% compared to January’s rate of 115.5%. These figures have been inching up over the past six months, which is wonderful news as distribution companies work to release some of the congested ports.
- Freight demand remains strong and continues to trend in a positive direction. However, as the conflict between Russia and Ukraine escalates, we may see ATA Truck Tonnage drop as this conflict will impact importing and exporting from that region.