GE Capital Releases Annual Review of Canadian RV, Motorsports and Marine Industries
November 29, 2012
MISSISSAUGA, ON – GE Capital’s Commercial Distribution Finance (CDF) business recently released its assessment of volume and aging trends in the Canadian recreational vehicle (RV), motorsports and marine industries through the end of the Canadian selling season. Among the key findings are that the age of inventory held by RV and motorsports dealers decreased year-over-year through September, while the age of inventory held by marine dealers held steady.
As a result of its longstanding position as the leading financing provider to Canadian manufacturers and distributors and their dealers, CDF periodically provides market intelligence that may help companies throughout the supply chain manage their businesses.
Recreational vehicles"The level of inventory aged more than one year held by RV dealers decreased from 20% in 2011 to a healthy 14% today," said Howard Shiebler, president and CEO of CDF in Canada. "As we enter into the seasonal down period, the levels of aged inventory look healthy and position dealers well for ordering new product in the new year thanks to our dealers’ thoughtful ordering patterns last year and early this year."
Regionally, inventory aged more than one year remains slightly more concentrated in Alberta and British Columbia as well as in the Atlantic provinces.
Shipments of RV products financed by CDF increased to 12 percent year-over-year through September. Growth is being driven by Saskatchewan and Manitoba.
MotorsportsIn the motorsports industry, dealers continued to stock products conservatively through September. Aging dropped to a healthy 11 percent.
"On a regional basis, aging levels dropped across all provinces. They range from a high of 15 percent in the Atlantic provinces to lows of 7 percent in Saskatchewan and Manitoba for the second consecutive year," said Shiebler.
When it comes to volume, there was a slight decrease in orders by Canadian motorsports dealers. This could be related to the fact that those in British Columbia, Alberta and the Maritimes went into the summer selling season holding extra snow-related inventory that didn’t sell in 2011, Shiebler noted.
MarineThe aging of marine products held by dealers remained steady through September; it has dropped only one percentage point since 2010. "The three-year aging trend is basically flat," Shiebler said. "Naturally, we work collaboratively with our customers to monitor situations where levels may become problematic."
The regional trends provide more insight. The sell-through of aged inventory caused aging levels to drop in British Columbia, Alberta, Saskatchewan and Manitoba. The only province with aging levels above the national average is Quebec.
The country did experience a positive increase in marine orders financed by CDF — 19 percent in 2012, up from 9 percent in 2011. The regional view shows that growth in the west far outpaced that in central and eastern Canada.
About this analysisAging is the number of days it takes for a dealer to sell a product that it’s holding as inventory. Limiting older inventory ensures that dealers have capacity to take advantage of new product launches and promotions. It’s important for dealers to have an adequate mix of products on hand for retail buyers so some level of aging is expected; however, excessive aging will tend to increase the cost of carrying inventory which, in turn, may mean lower profit margins for dealers.
CDF provides inventory financing, also known as floorplan financing, which allows dealers to stock, market and sell a wide variety of products from manufacturers, including those in the RV, marine and motorsports industries. It’s an important element of a successful manufacturer-dealer business model; manufacturers benefit from enhanced product flow and increased sales opportunities, and dealers obtain improved credit availability and terms.
About GE Capital, Commercial Distribution FinanceGE Capital, Commercial Distribution Finance provided nearly $32 billion in financing for more than 30,000 manufacturers, dealers and distributors across the U.S. and Canada in 2011. Programs include inventory and accounts receivable financing, asset-based lending, private label financing, collateral management and related financial products. Customers have access to exclusive online tools and analytics to manage their accounts and inventory. For more information, visit http://www.gecdf.com/or follow company news via Twitter (@GEInventoryFin).
GE Capital offers consumers and businesses around the globe an array of financial products and services. For more information, visit www.gecapital.com or follow company news via Twitter (@GECapital).
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.
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