Snowmobiles, personal watercraft and other recreational vehicles continue to find buyers despite the rise in interest rates. For boats, it’s a different story, which forces BRP to review its short-term ambitions in this niche – where the multinational set foot four years ago.
“When financing costs increase, spring is late and summer is gloomy, some customers prefer to delay the purchase of a boat,” explains the company’s president and CEO, José Boisjoli, in a telephone interview with La Presse on Thursday, on the sidelines of the publication of the second quarter results.
The maker of Ski-Doo, Sea-Doo and Can-Am beat analysts’ expectations during the months of May, June and July by posting a 42% increase in profits, notably thanks to an increase in sales of snowmobiles and two-seater UAVs (side-by-side vehicles).
This type of purchase can generally be financed over a period of three to five years and, in some cases, BRP can guarantee an interest rate varying, for example, between 2 and 4%. The picture is different when we talk about a boat – Alumacraft fishing boats and Manitou pontoons.
“With high-value boats, 70% of customers finance the purchase for 15 to 20 years,” says Mr. Boisjoli. The summer was ordinary, the client asked himself: “Do I want to finance a boat over 15 years at a rate of 12%?” »
Until things get back on track, the Valcourt company has decided to postpone the construction of its boat building factory in Mexico for 12 months. Activities should therefore start in 2026. The good news for BRP? Last year, the marine division accounted for only about 5% of the multinational’s total turnover of 10 billion.
“We are still a small player in the industry with less than 5% of market share,” emphasizes Mr. Boisjoli. We have also proposed new products that will be able to gain market share. It’s a US$36 billion industry and we only have a small share. So there are opportunities for growth. »
The prospects for the marine division did not seem to worry analysts.
At National Bank Financial, Cameron Doerksen was rather satisfied with the growth in retail sales – those of dealers – in all of the recreational vehicle manufacturer’s main markets.
“The average household income among BRP customers is US$165,000, which is an increase of 40% compared to four years ago,” the analyst wrote in a note. These consumers are less sensitive to economic ups and downs. »
This timeline has not changed, but the company is giving itself an additional year, until 2027, to electrify the rest of its products, such as all-terrain vehicles and two-seater autoquads.
“We develop our own technologies, such as batteries and modules,” emphasizes Mr. Boisjoli. We also work with suppliers. At first it may seem simple, but it doesn’t always go as planned. We wanted to give ourselves the latitude to adjust. »
Citing competitive reasons, the BRP manager did not want to comment on the pace of deployment of the other electric versions that will be offered.
On the Toronto Stock Exchange, BRP shares lost $1.52, or 1.5 per cent, to $100.48.
