Automotive Dealers, NEC

SIC 5599

Companies in this industry

Industry report:

Establishments in this industry are primarily engaged in the retail sale of new and used automotive vehicles, equipment, and supplies, not elsewhere classified, such as snowmobiles, go-karts, dune buggies, utility trailers, and golf carts. Also included in this industry are establishments primarily engaged in the retail sale of aircraft. Not included in this classification are automobiles, light trucks, recreational vehicles, motorcycles, boats, motor scooters, all-terrain vehicles, and personal watercraft.

According to the U.S. Census Bureau, 2,165 firms engaged in the retail sale of new and used automotive vehicles, equipment, and supplies not elsewhere classified in 2010. Together these firms employed 13,083 people who earned a total annual payroll of more than $493 million. Overall the industry generated approximately $6 billion in annual revenues. Major segments of this industry are retailers of aircraft, utility trailers, and golf carts.

Retail businesses engaged in selling aircraft and aircraft parts tend to move through boom-bust cycles with the swings in the economy. Therefore, this business segment was significantly impacted by the economic recession at the end of the first decade of the 2000s. Manufacturers cut production as demand dropped and the market was flooded with unused and underused aircraft. Business jets also were hit with public perception problems, appearing extravagant and wasteful. At the end of 2008, marketing research firm PMI reduced its forecast of the number of very light jets to be delivered between 2008 and 2017 23 percent, from 5,970 to 4,610. Nevertheless, the firm predicted in 2011 that the global light jet industry would be worth $7 billion by 2020. According to National Aircraft Resale Association (NARA), approximately 4,000 business jets are traded every year and at any given time between 10 and 20 percent of all business jets owned in the United States are for sale.

Snowmobile retailers sell new and used snowmobiles, parts, and equipment and are involved in the servicing of the vehicles. Dealers contract to carry the product lines supplied by a handful of snowmobile manufacturers worldwide. In the early 2010s one of these was Arctic Cat Inc., headquartered in Thief River Falls, Minnesota, which sold about 30 types of ATVs and 40 snowmobile models. Sales for the company in 2011 were $464.6 million, about half of which came from the United States. Polaris Industries, headquartered in Medina, Minnesota, registered sales of $2.6 billion in 2011, with about 70 percent originating in the United States. In addition to snowmobiles, Polaris produced one of the top brands of ATVs. Yamaha Motor Corp. USA also sold both ATVs and snowmobiles. Headquartered in Cypress, California, and a subsidiary of Japan's Yamaha Motor Co., the firm had sales of $303.2 million in 2011. Although based in Canada, Bombardier Recreational Products (BRP) had manufacturing facilities in the United States and was the creator of the original Ski-Doo snowmobile.

According to the International Snowmobile Manufacturers Association (ISMA), there were more than 2,000 snowmobile dealers in the United States in 2011, and more than 90,000 full-time North American jobs were generated by the snowmobile industry in manufacturing, dealerships, and tourism-related businesses.

The sport of snowmobiling is relatively new, with the first snowmobiles having been mass produced in the 1950s by Bombardier Inc., a Canadian company. The market peaked around 1971, when dealers sold approximately 500,000 units. By 2000, according to ISMA figures, units sold globally fell to just over 208,000. Sales continued to steadily decline through the first decade of the 2000s, falling to 164,753 units in 2008 (79,552 in the United States). By 2011, 123,063 snowmobiles were sold worldwide, 51,796 of which were sold in the United States, with a total retail value of $434.9 million. ISMA also reported that 1.5 million snowmobiles were registered in the United States in 2011. Minnesota had the most, followed by Michigan, Wisconsin, and New York. Together these four states accounted for approximately 56 percent of all snowmobiles owned in the United States.

Like other segments of the industry, the golf and utility cart sector struggled at the end of the first decade of the 2000s to overcome the decline in consumer spending, particularly on nonessential and recreational items. Nonetheless, the industry was helped by the introduction of advanced technology, such as golf carts with electronic speed control and utility carts with added versatility and power. In addition, some states began to allow at least limited access to roads by golf and utility cart drivers, opening further marketing opportunities for the industry. E-Z-GO, located in Augusta, Georgia, was one of the largest distributors of golf and utility carts in the world in the early 2010s through its factory locations and independent distributors. Club Car Inc., located in Augusta, Georgia, was a subsidiary of giant Ingersoll Rand and a leader in the distribution of golf carts as well as utility carts. The company, which posted revenues of $93.5 million in 2011, had a network of 600 dealers, distributors, and factory stores worldwide.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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