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Just inflation or justified rise?

Whether you are new snowmobilers or not, all consumers have noticed the high price of snowmobiles and their essential accessories.  Indeed, the cost has almost doubled in a little more than 10 years.  Many factors explain this price increase on the market; moreover, this increase has important impact on our economy and this, at all levels.  Here is why.

For the last 10 years, the snowmobile industry has known a technology explosion in order to fulfill the consumers’ requirements that get higher and higher.  Behind all that, there is another big challenge for the manufacturers:  to meet the new environmental standards of the Environmental Protection Agency (APE).  In 10 years, the noise and polluting emissions have almost been cut by half.  The electronic reverse, the electronic fuel injection, the direct injection, the pyramidal chassis and the 4-stroke engines adaptation are some technology examples that were very expensive for the manufacturers in research and development.  In addition to meet liability requirements, a new war against weight is going on.  This makes the engineers use new metal alloys always stronger and lighter.

Even though these last years the manufacturers have all known good sales periods in Québec, this is not the same in all the industry.  While almost 40 % of the worldwide sales are made in the United States, a rough crisis is shaking the market; sales are dropping very quickly.  Some manufacturers have even announced production cuts and have importantly limited their research and development budget, which may be harmful to the 2012 EPA goals.  Moreover, even if the snowmobiles are more and more fuel-efficient, the fuel price has also soared since this decade began.  Even if American were protected during the first half of the decade, this reality has finally reached them.

Here in Québec, even if the market seems in good shape, it remains very fragile.  Sales are good because credit is too accessible and because second hand snowmobiles sales are overvalued.  However, if our economy is still touched and if job losses increase, the market could change very quickly.  The numbers of buyers decreasing, it will automatically decrease the second hand snowmobile values; thus the cash down will be higher on a new buy.  In another level, many federated clubs have problems to keep in operation right at this moment; so imagine with a revenue loss.  Clubs closings would have catastrophic consequences on many tourist regions in the province of Québec.  Border regions are already affected by the lower number of Americans who were spending their money in Québec.  Many clubs will have to review their financing mode in order to stay alive.    

Now, maybe you will understand why a snowmobile costs almost the same than a car today.  With all this advance made since the last decade, I wonder what is coming for the next 10 years.  Whatever, even after the 2012 goals are reached, the manufacturers will keep on offering us some hi-tech products, because finally this is what we are looking for as faithful consumers.  Till then, enjoy 2010 and the beautiful Québec winter.  Have wonderful rides!

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