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Specialty Market Insights – 3/18/2021

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Motorcycle & Powersports Market Update

“After the strong start to 2021 we observed last month, for March, most Powersports segments have seen relatively minor changes in value. Since this is normally the month when most vehicle types wholesale prices begin to show significant strength from their winter lows, the currently elevated prices fueled by COVID-19 are likely to upset long standing patterns and trends.”

– Scott Yarbrough, Senior Analyst, Motorcycle & Powersports

Feb to Mar Average Segment Change in Value

  • Snowmobiles are our biggest gainers for the third month in a row, up 6.0% as we enter March. Despite their later start, the sleds have now followed the rest of the powersports market since the pandemic began to much larger than normal seasonal gains in value.
  • Inventory still remains tight on both the new and used side of the industry, helping to keep all prices elevated well beyond normal levels. Many one- and two-year-old used bikes are currently retailing for near, or even above, original MSRP.
  • A little over 2 full months into 2021 it is becoming apparent that the changes to the Powersports market brought by the COVID-19 pandemic will continue to affect seasonal valuation trends for the foreseeable future. This month’s modest changes stand in stark contrast to past years’ March prices, which saw much larger spikes in value.
  • Personal Watercraft and Jet Boats are our second and third largest gainers this month, signifying that the water-based segments will likely be strong performers once again as we head towards summer.

Segment Spotlights & Industry News

Cruiser Performance

Looking at the graph below of the performance of the Cruiser segment versus its performance from a year ago shows a significant change in how the market has performed over the winter months. Instead of declining as occurred during the winter of 2019/20, prices rose steadily, but now appear to be headed for smaller increases heading towards spring.

Off-Road (Dirt Bike) Performance

Much like the Cruiser segment, the Dirt Bikes never saw any significant depreciation during the winter months, leaving their prices elevated as we enter the Spring selling season. This has led to smaller increases than we would normally see for the time of year. It is still important to remember that with overall values above historical norms, normal spring appreciation trends may be lower than usual.

  • The National Marine Manufacturers Association (NMMA) reports in Boating Industry Magazine that current inventory levels are running 20% to 60% below normal for the recreational boating industry, which includes both the Jet Boat and Personal Watercraft segments, as well as traditional boats. The NMMA’s December Monthly Shipment Report showed a 17% increase in shipments versus November as the industry recovers from COVID-19 related issues, and manufacturers work to replenish dealer inventory after 2020’s record sales.
  • With the recent passage of the $1.9 trillion American Rescue Plan by Congress, $1,400 stimulus checks have started going out to tens of millions of people. This flood of money, coupled with the annual tax return season, is likely to induce another spring selling surge similar to last year. While vaccines are beginning to make a dent in the coronavirus pandemic, the desire for “socially distant” recreation is likely to remain a while longer, and coupled with tight inventory levels, we anticipate current elevate pricing levels to continue.

Recreational Vehicles Market Update

“Although the values of used RVs sold at wholesale auctions had dipped in December, they rebounded in January and actually reached all-time highs. With the exception of a few blips, the values of both motorhomes and towables have increased steadily since late Spring when RVing really caught on as a way to get out of the house and do something fun while still being safe and socially distant.” – Eric Lawrence, Principal Analyst, Specialty Markets

Wholesale RV Values Reach All Time Highs

For Motor Homes (including Class A, B, and C)

  • Average selling price was $60,739, up $5,667 (10.2%) from the previous month.
  • One year ago, the average selling price was $51,490.
  • Auction volume was up 7.9% from the previous month.
  • The average model year was 2011

For Towables (including Travel Trailers and Fifth Wheels)

  • Average selling price was $19,570, up $1,379 (7.6%) from the previous month.
  • One year ago, the average selling price was $14,812.
  • Auction volume was up 9.1% from the previous month.
  • The average model year was 2014.

Industry Highlights

According to the RVIA, the total number of RVs shipped in January reached 45,930, a record for the month, and an increase of 39.2% over January 2020. Towables totaled 41,414 units and motorhomes accounted for 4,516. The latest projections forecast that total 2021 production will come in at 533,356, which would be a new annual record, topping the 504,600 units shipped in 2017.

  • Thor Industries announced their fiscal 2Q 2021 sales reached $2.73 billion, up 36% year over year.
  • The RVIA reported that 11.2 million households currently own an RV, an increase of 26.1% over ten years ago.
  • Camping World announced they are in the process of opening new RV dealerships in Georgetown, Delaware; Lincoln Nebraska; and Billings, Montana. They have also acquired several existing dealerships during the past several months.
  • Statistical Surveys reported that 29,958 RVs were registered in January, an increase of 26.1% year over year.
  • RV technicians are in high demand – it is the third fastest growing job in the United States.
  • RV Megadealer Camping World reported fourth quarter 2020 revenue of $1.1 billion, up 17.5% over the same period in 2019. Net income rose to
  • $40.3 million after posting a net loss of $80.9 million in 2019 due to restructuring.
  • The RVDA and Baird announced the results of a survey showing that RV dealer sentiment trended positive in February, with a score of 70. Their three-to-five year outlook was also 70. (Score is out of 100, anything over 50 is considered positive.)

Collectible Cars Market Update

“The first few months of the year are typically a very important time in the collectible car world, as the results achieved at the auctions set the overall tone for the upcoming year. This year COVID threw a wrench into the usual order of things, but many of the events that were cancelled earlier in the year are starting to take place and things appear to be getting somewhat back to normal.”

– Eric Lawrence, Principal Analyst, Specialty Markets

Auction Activity

  • GAA Classic Car Auction’s most recent sale was held the last weekend in February at their usual Greensboro location, “the Palace”. They announced that they set several internal records, including: highest sell through percentage (94%), total sales amount (over $19 million), and number of registered bidders (over 1,000).
  • RM Sotheby’s held their live streamed Paris auction February 13th, offering 40 high-end sports cars and a collection of memorabilia. Total sales came in at just over $11.1 million, with a preliminary sell through rate of roughly 70%. Some of the featured lots included one of Rod Stewart’s personal Lamborghinis and several vehicles from “The Gold Collection”.
  • Gooding & Company held the second part of their Geared Online: Phil Hill Automobilia Collection in early February. The auction featured 306 items, including some of Mr. Hill’s racing helmets, Rolex watches, racing suits, clothing, awards and trophies, and even an original signed script from the 1966 movie Grand Prix. All items were declared sold, producing a sell through rate of 100%, and totaling over $1.15 million.
  • Bonhams’ Legends of the Road auction was a very small auction by typical standards, with only six cars and a handful of vintage parts being offered, but they were all sold and generated just under $9 million in sales, not including the Ferrari 275 GTS convertible that was sold to a private party just prior to the public auction
  • RM Sotheby’s Online Only: Open Roads February auction was billed as their first transcontinental sale and was really three separate auctions presented as a group. The first one to close was based in Europe and the UK, which saw total sales reach roughly $4 million, day two was for cars based in North America and totaled $3.2 million, and day three wrapped up with a Swiss single-owner collection of seven rare Porsches, which accounted for just under $4 million. All told, the auctions had a grand total of just over $11 million with a 76% sales conversion rate.

Notable Recent Auction Sales Include:

  • 1971 Lamborghini Miura P400 SV $2,900,000 (RM Sotheby’s)
  • 2005 Porsche Carrera GT $835,000 (RM Sotheby’s)
  • 1954 Kaiser Darrin Roadster $137,500 (RM Sotheby’s)
  • 2016 Porsche 911 R Coupe $441,375 (RM Sotheby’s)
  • 1956 Mercedes-Benz 190 SL Roadster $110,000 (RM Sotheby’s)
  • 1988 BMW M6 Coupe $55,000 (RM Sotheby’s)
  • 2017 Ford Shelby GT350 R Coupe $73,700 (RM Sotheby’s)
  • 1937 Bugatti Type 57 Roadster $5,665,000 (Bonhams)
  • 2017 Ford GT Coupe $970,000 (GAA)
  • 1959 Dodge Custom Royal Convertible $175,000 (GAA)

Market Trends

The Vintage Pickup Truck segment was originally limited to pickups, but has recently expanded to include collectible SUVs, many of which were constructed on modified truck chasses. A few examples are Ford, Chevy/GMC, and Dodge pickups built from the mid-1940s up through the early 1970s, early Jeep CJs, Toyota FJ40s, International Scouts, early Range Rovers, and first-generation Chevy Blazers and Ford Broncos. Pickups have been on a run for the better part of a decade, and SUVs have been on fire for the past two or three years, with values doubling or sometimes tripling during that time frame.

The changes by vehicle segment were mixed this month. While Pony Cars, Vintage Exotics, and Classic Trucks and SUVs increased, Muscle Cars, American Classics, and Vintage European Sports cars dropped a little. As the demographics within the collectible car community continue to evolve over time, we are seeing tastes shift as older owners continue to age out of the hobby and be replaced with younger ones.

Medium and Heavy-Duty Market Update

We continue to see strength in all truck segments as we prepare to enter the second quarter of 2021. Continued supply chain issues are still having a huge impact on new equipment production. Conversations with OEMs and industry professionals lead us to believe that these issues will continue throughout much of 2021. Production will likely not catch up with demand until this time next year. Auction volume continues to decrease. Many fleets are choosing to keep units they might would normally remarket, as uncertainty in new production remains. In addition, dealers are keeping many of the trade-ins they receive because they need retail inventory. The majority of the units we see showing up at auction are rough, higher mileage units. Recent auction and retail transactions show increasing prices on late model and older units as overall new and used supply continues to decrease. Reports from Taylor and Martin, Ritchie Brothers. Manheim, and Adesa show continued week over week strength in used pricing. JM Wood is holding an auction this week (March 16th-20th) in Montgomery, AL. As usual, they will run a number of dump and straight trucks and will provide us with some great insight into where prices and demand are trending on construction units.

Heavy-Duty Trucks

  • Over-the-Road and Regional Tractors continue to increase in demand and price due to limited availability.
  • Heavy-Duty Construction units remain strong; however, we have not seen as much of an increase as we are seeing on other segments. This is likely due to how strong this segment has been in the past.
  • Below you can see how stable Construction Trucks have been compared to OTR and Regional Tractors.

Medium-Duty Trucks

  • We continue to see price increases in all Medium Duty truck classes thanks to production slowdowns.
  • With no immediate fix in place, we expect to see stable pricing for the majority of 2021.
  • Last mile delivery services continue to thrive. This is helping increase the demand for most Medium-Duty units.

Retail Sales

According to data gathered from Federal Reserve Economic Data (FRED) retail sales figures were relatively flat from January to February due to production limitations. OEMs simply cannot produce trucks fast enough to keep up with demand. Fleets are in need of new trucks in order to replace aging equipment and also to keep up with improving freight demand. Discussions at recent industry events such as ACT’s 64th Outlook Seminar and NTEA’s Work Truck Show help support a positive outlook for transportation, construction, and freight. This increase in demand mixed with increasing production issues will lead to further stabilization and increase pricing in Medium and Heavy-Duty trucks for much of 2021 as OEMs and suppliers scramble to produce as many trucks as possible.

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