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Changing industry: Snowmobile sales plummet, but enthusiasts say the sport still thriving

FOR IMMEDIATE RELEASE
March 20, 2005

CONTACT: , Chronicle Staff Writer

YELLOWSTONE NATIONAL PARK — The streets around West Yellowstone are incredibly quiet this year.

Gone, for the most part, is the constant buzz of snowmobiles, the crowds in restaurants and hotels and the dollars they pump into the town's economy.

The scene is a far cry from winter in West Yellowstone just a few years ago, when the town bustled throughout the winter.

But Doug Edgerton, a former town councilman, said West Yellowstone just reflects what is happening nationwide to snowmobiling.

"It's dying," he said. "I was just down in Idaho Falls and it was the same thing -- dead."

West Yellowstone has grappled for years now with the uncertainty of whether, and how many, snowmobiles will be allowed in Yellowstone National Park. Many local business owners blame the regulations, which under an interim plan allow 720 guided snowmobiles into the park a day, for the declining business.

But a national trend may be taking its toll on this tourism-dependent town, Edgerton said. Snowmobile sales nationwide have plummeted in recent years, a pattern that's also been seen by some local dealerships.

Brad Schmier has co-owned Yellowstone Adventures, where he sells sleds to both the public and rental shops, since 1968, In the mid 1990s, Schmier sold on average more than 100 non-rental sleds a year. Now he's selling between 25 and 30 snowmobiles a year.

Snowmobile enthusiasts, however, dispute that the hobby is in decline. They point out that even though sales of new snowmobiles are down, there are more registered snowmobiles in the United States than ever.

They also acknowledge that snowmobiling has been hampered over the past decade by mild winters. And it is that, more than the restrictions placed on snowmobiling in Yellowstone, that affect perceptions of the health of the sport and the industry.

"It's a weather-dependent business," Ed Klem, president of the trade group International Snowmobile Manufacturers Association, said in a telephone interview from his Haslett, Mich., office.

"We haven't had long-lasting, cold, snowy winters in the northern United States for many years, and you don't snowmobile if you don't have snow," he said. "I don't think Yellowstone has had a negative impact on sales nationwide at all."

PLUMMETING SALES

Snowmobile sales in the United States peaked in 1997 at 170,325 machines, according to ISMA statistics. The trade group represents the four companies that make snowmobiles in North America: Arctic Cat, Polaris, Yamaha and Bombardier Recreational Products, the parent company of Ski Doo snowmobiles.

Sales prior to 1997 had steadily climbed every year from 1992, when 81,946 snowmobiles were sold in the United States. But with the exception of one year, snowmobile sales have dropped every year since.

Last year Americans bought 109,750 snowmobiles, which is a 35 percent drop from the 1997 peak.

Nearly everyone agrees that the mild winters in the upper Midwest, which statistically has the lion's share of the snowmobilers nationwide, are the driving factor.

But another reason for the decline in snowmobile sales, ironically, is the incredible improvements in snowmobiles over the past decade. In a sense, snowmobile makers are victims of their own success.

And it's tougher to sell them when a new one with all the bells and whistles costs more than $10,000, while a base model runs about $6,000.

BETTER MACHINES

Today's snowmobiles are immeasurably better machines than those of even a decade ago. An old saying about snowmobiles was ride them for an hour, then work on them for an hour.

Instead, modern snowmobilers enjoy posher rides, heated handles and seats and cleaner, quieter engines. Most of all, modern snowmobiles have mechanical features, such as electronic fuel and oil mixing, that allow them to run longer with less maintenance.

"It's very similar to cars, where your first tune up may be 100,000 miles," said Kale Wainer, spokesman for Arctic Cat, a snowmobile and ATV company based in Thief River Falls, Minn. "Some of the snowmobiles now are 10,000-mile machines, where you don't have to do anything to them until 10,000 miles."

Couple the better machines with the fewer miles put on snowmobiles because of the weather and riders don't need to replace their sleds nearly as often.

"If it's two years old but they've only got 1,000 miles on it, there's not really a need to replace it," Schmier said.

Another factor that has hurt snowmobile sales include the growing popularity of all-terrain vehicles, which people can use essentially year round.

PLENTY OF RIDERS

The decline in snowmobile sales, however, does not mean that the sport is dying, snowmobile enthusiasts contend.

Klem points out that last year there were 1.77 million snowmobiles registered in the United States, the highest number ever.

Montana, too, has more registered snowmobiles than ever before: 26,531, according to the state Motor Vehicle Department.

In addition, the industry has seen solid growth every year in the number of helmets, snowmobile suits and accessories sold, Klem said. And there's greater attendance at snowmobile trade shows. "There's still a high level of enthusiasm," he said.

CHANGING INDUSTRY

Despite the lower sales nationwide, snowmobile manufacturers are thriving. That's largely due to booming sales of all-terrain vehicles, dirt bikes and other products that they've branched into.

"They've just been very smart and they've diversified, they're just making other vehicles," Klem said.

Gross sales, volume and profits are all skyrocketing for the four companies, according to statistics provided in the companies' past few annual reports.

For example, Polaris Industries made a record $424 million in profit last year, compared with 2003 profits of $363 million for the Roseau, Minn., based company. And Arctic Cat also had a record sales year, although its profit of $30.4 million was slightly down from $32.7 million in 2003.

As for the snowmobile side of the business, the manufacturers have also seen solid growth in overseas markets, in particular Scandinavia, Klem said.

Snowmobile sales there have grown steadily and continue to climb. Scandinavians, especially in the northern regions of Finland, Sweden and Norway, use the vehicles more for transportation than for pleasure riding.

Klem has ridden with doctors, veterinarians and reindeer herders who are dependent on snowmobiles. They use them to make house calls and haul oats to livestock.

"The snowmobile's the only way to get out, those are the life-saving machines," he said.

As such, Scandinavian customers like the new, four stroke machines. They're quieter, cleaner and require less maintenance.

The biggest advantage, however, is their dramatically better fuel efficiency. Four-stroke snowmobiles can get up to 23 miles per gallon, compared with about 15 mpg for two-stroke models.

"If you're out in the middle of nowhere and there are no gas stations, that extra five or seven miles to the gallon is huge," Klem said.

STILL SELLING LOCALLY

The nationwide trends don't concern Curt Lance, general manager at Team Bozeman, a snowmobile, motorcycle and ATV dealership. He's responsible for selling between 45 and 55 snowmobiles a year.

For Team Bozeman, snowmobile sales have hovered consistently around 50 machines a year for several years, Lance said. But the store's profits -- when other motorized toys are added in -- are higher than ever.

In a sense, Team Bozeman is like a microcosm of the industry.

"I had the largest parts and accessories winter I've ever had," Lance said in the store's showroom on Simmental Way.

And despite the longer life of snowmobiles, eventually people come in for a new one to enjoy the better technology.

That would include Todd and Carol Lingard, who are active in the Montana Snowmobile Association. Carol Lingard took a ride on her husband Todd's new Polaris 600 snowmobile, which he bought last fall at Team Bozeman, and was hooked.

It was lighter, easier to turn and smoother than her old machine, a 1997 model, which was so heavy and tough to maneuver that she was pondering quitting the sport.

"After I saw how much easier it is to ride, I said 'I've got to have one of these,'" Lingard said.

In total, the couple spent about $17,000 on the new Polaris snowmobiles. Carol Lingard said she plans to make the snowmobile she bought this year her last.

But as a recent retiree, she might put on more miles than she has in the past decade, especially if winters grow more snowy and cold.

That's what the industry, both manufacturers and communities that cater to snowmobilers, are banking on.

"We've got to pray for snow," Klem said. "It's a little bit like being a farmer, without the subsidies."

Number of snowmobiles sold in the United States since 1992, according to the International Snowmobile Manufacturers Association:

2004 109,750

2003 114,927

2002 134,082

2001 140,629

2000 136,601

1999 147,867

1998 162,826

1997 170,325

1996 168,509

1995 148,207

1994 114,057

1993 87,809

1992 81,946

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