After the pandemic and a few rough winters, snowmobile industry faces uncertainty
After the pandemic and a few rough winters, snowmobile industry faces uncertainty
On the shores of Starvation Lake in Northern Michigan, the Hideaway Bar is a popular spot for snowmobilers to thaw out after hours riding the trails. Curtis Goings and his buddies are here. They came all the way from Indiana.
“We got a group of about 10 of us,” Goings said. “We’re always out there drag racing. We’re always out there having a good time.”
At the height of the pandemic, while consumers were looking for recreational opportunities outdoors, snowmobile sales were healthy. But a flurry of macroeconomic and climatological factors seems to be squashing demand. The iconic snowmobile brand Arctic Cat sent that signal when it announced in December that it will “indefinitely” stop making new snowmobiles after finishing production on the 2025 model year.
Riding a snowmobile is thrilling. The speed, the fresh air, being outdoors — it’s all a lot of fun. But of course, it requires a decent amount of snowfall. In parts of Michigan this season, there’s enough snowpack to ride — which wasn’t the case for much of the snow-getting regions of the United States last year, when sales dipped. The International Snowmobile Manufacturers Association reports the average age of a snowmobile rider is 54.
“This whole week we’ve been up here, we’ve had beautiful weather,” Goings said. “But the time before that, we couldn’t come up because they didn’t have snow.”
This is the first time in two years that Goings has been back to Starvation Lake. With more snow piled up this year, Goings won’t miss any opportunity.
After a bite to eat, they hopped on their sleds, revved their engines and hit the trail again.
Goings and his group are enjoying this year. But the trend toward milder winters isn’t great for snowmobile business, in general.
“It’s the gravy train when snow hits,” said Lenny Sims, vice president of specialty vehicles at J.D. Power and Associates. “If it’s a good winter, the snowmobile market does pretty well. When it doesn’t, it’s a struggle.”
Warm winters are a struggle not just for snowmobile riders, but snowmobile manufacturers, dealers, service departments, small businesses and rural communities that rely on the money snowmobilers spend during the winter tourist season.
Sims said sales of snowmobiles boomed during the pandemic, when people were eager to get outdoors. Since then, low snow years coupled with inflation, high interest rates and other consumer expenses are softening demand for snowmobiles.
“[Consumers] are facing all of these other increasing factors and the pie is only so big for discretionary income,” said Jamie Katz, equity analyst at Morningstar.
In addition to snowmobile brand Arctic Cat, Yamaha is also folding its snowmobile division. While manufacturers Ski Doo and Polaris make up a much bigger share of the snowmobile market, Katz said it’s telling that two of the four big snowmobile companies are getting out of the business.
“You have this like amalgamation of headwinds that has really been unsurmountable for a lot of these guys,” Katz said.
There’s still a chance another company could swoop in to buy Arctic Cat and try to revive it. After all, snowmobile riders are a passionate community who go to great lengths to find snow — even if climate change makes it more difficult.
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