Powersports Business Tests Subscriptions to Rev up Bottom Line

A new monthly subscription program is encouraging first-time users to hop onto all-terrain vehicles (ATVs), motorcycles, snowmobiles, boats and similar vehicles.

Powersports vehicle supplier Polaris reported Tuesday (July 26) during its quarterly earnings call that this new plan is drawing newcomers to the industry.

“Since launching Polaris Adventures Select early last year, 90% of our members are new to the powersports industry, again reflecting our commitment to open the industry up to new riders and customers,” Polaris CEO Mike Speetzen said during the call.

Drawing New Riders, Customers

The Polaris Adventures Select membership program, which began in a limited number of locations last year and then expanded nationwide at the beginning of June 2022, allows members to book these vehicles at any of 200 locations across the United States. With one of the monthly plans, members acquire credits that they can redeem for use of the vehicles.

By renting vehicles in this way — through what Speetzen said is the industry’s first monthly subscription program — members avoid the cost and long-term commitment of ownership, can use a variety of vehicles and can book the vehicles at participating dealers in their hometown or in a city they are visiting.

“Members now have open access to get outside and explore their own cities or bucket list destinations across the country in a new way, exploring the outdoors off-roading, touring the city in an open-air Slingshot or even cruising the open waters by pontoon,” Speetzen said.

Coping With Supply Chain Issues

In other news, Polaris reported in a presentation released in conjunction with the call that retail sales were down 23% year over year mainly due to supply chain challenges.

The company also reported that demand remains stable, and that supply chain is improving, but the supply chain continues to dictate performance as dealer inventory remains at a historically low level. In fact, dealer inventory in the second quarter was down 70% from that in the same quarter of 2019.

“With robust demand extending over the last several years, inventory levels have not been able to keep pace due to supply chain challenges,” Speetzen said, citing that statistic. “While demand has been strong since 2019, supply chain challenges have constrained the industry’s ability to deliver and as a result, Polaris has only grown at a 2% [compound annual growth rate] over the 2019 to 2022 period.”

In another challenge, commodity prices remain well above historical norms with some sequential improvement, Polaris reported.

Seeing a Resilient Consumer

Looking ahead, Polaris reported that it expects supply chain challenges to persist, with modest improvements, and full-year retail to be down modestly.

“Dealers continue to be positive around demand and more constructive around availability, which we appreciate but know we have more work to do to improve availability even further,” Speetzen said. “While other factors such as rising interest rates, inflation and higher gas prices are certainly a concern, our data continues to show a resilient consumer.”