Polaris Reports Q1 2016 Earnings

Posted on April 22, 2016 by Marc Cesare

One of the Polaris RZR models involved in the large first quarter vehicle recall.

Polaris reported earnings for the first quarter 2016 fiscal year with sales and earning declining for the second consecutive quarter. Revenue was down 5% to $983 million driven by inventory management and currency impacts. Earnings per share was down a significant 45% with currency, volume and mix and considerable legal and warranty costs more than offsetting leaner operations. The following are some of the highlights related to the small, task-oriented vehicle market.

Polaris is recalling more than 160,000 RZR vehicles to address fire and other thermal risks. This figure appears to include vehicles outside the US as the CPSC reported a figure of 133,000.
Management expects to “…address all of the recalled vehicles within the quarter…” and emphasized their commitment to resolving the issue quickly.
Side-by-side dealer inventory declined upper single digit percent in the quarter.
Year-over-year (YOY) North American side-by-side retail decreased slightly in an industry up mid to high single digits, so some market share was lost.
Management is positive about the performance of the new GENERAL product line and reports cannibalization of Ranger and RZR lines is not significant.
Side-by-side market remains weak in oil producing states but overall management is optimistic about the ORV (ATV & side-b-side) industry.
Management reports higher variability from month to month and regionally in the ORV market.
The Global Adjacent Markets business unit saw a 8% decrease in revenue with strength in Aixam, national accounts and GEM offset by weakness in Bobcat and Brutus. Defense business (MRZR and Dagor) declined “significantly” due to tough comparables but the order backlog is up.
The European ORV industry grew low single digits in the first quarter, with Polaris retail outperforming, up mid-single digits.
Multix retail and distribution, while still relatively small, are on plan through the first quarter. Multix is a small multi-purpose vehicle for the Indian market.
Ranger production will begin in the second quarter at the new Huntsville, AL plant, which should provide significantly better operating efficiencies and better inventory and retail flow management.
Management expects Global Adjacent Markets to be up in the high single digits percent range, reflecting the recent acquisition of Taylor-Dunn and ORV/Snowmobile sales to be down low to mid single digits.

Learn more: Seekingalpha.com (earnings call transcript)

Polaris Recalls 133,000 RZR 900 and 1000 Vehicles

Posted on April 20, 2016 by Marc Cesare

Polaris announced a massive recall of approximately 133,000 RZR 900 and RZR 1000 side-by-side vehicles covering model years 2013 to 2016 because of a potential fire and burn hazards to drivers and passengers. The recall covers a wide range of RZR 900 and RZR 1000 model variations (a few are pictured above). The following information is from the Consumer Product Safety Commission.

Recall Summary

Name of product: Polaris RZR recreational off-highway vehicles (ROVs)

Hazard: The recalled ROVs can catch fire while consumers are driving, posing fire and burn hazards to drivers and passengers.

Consumer Contact: Polaris at 800-POLARIS or 800-765-2747 from 8 a.m. to 9 p.m. CT Monday through Friday and 9 a.m. to 5 p.m. CT Saturday and Sunday or online at www.polaris.com and click on “Off-Road Safety Recalls” on the main page of the Polaris website.

Recall Details

Description: The U.S. Consumer Product Safety Commission (CPSC) in cooperation with Polaris Industries Inc., of Medina, Minn., is announcing a recall for about 133,000 Polaris Model Year 2013-2016 RZR 900 and RZR 1000 recreational off-highway vehicles (ROVs).

CPSC and Polaris warn consumers to stop using these recreational vehicles immediately and contact their Polaris dealer for a free repair. Polaris has agreed to voluntarily suspend sale of all recalled vehicles until they are repaired.

Polaris has received more than 160 reports of fires with the recalled RZR ROVs, resulting in one death of a 15 year old passenger from a rollover that resulted in a fire and 19 reports of injuries, including first, second and third degree burns.

Visit www.polaris.com to determine if your RZR ROVs VIN number is included in this recall.

2013/2014 RZR XP 900
3NSJT9EAXEF364144 – 3NSJT9EA4EF385345
4XAJT87A0DP456738 – 4XAJT87A8EF366714

2014/2015/2016 RZR XP 1000 *additional VIN numbers included. Visit Polaris.com.
3NSVDE992FF361215 – 3NSVDE998GF784060
4XAST1EA0EB165962 – 4XAVFE992GB344924

2015/2016 RZR 900 *additional VIN numbers included. Visit Polaris.com.
3NSVAE871FF366883 – 3NSVAE874GH861374
4XAVAA878FB926614 – 4XAVAE873GB673176

2015/2016 RZR S 900 *additional VIN numbers included. Visit Polaris.com.
3NSVBE870FF361395 – 3NSVBA876GH860331
4XAVBE879FP340592 – 4XAVBE876GB673749

2016 RZR S 1000 *additional VIN numbers included. Visit Polaris.com
3NSVBE994GH102740 – 3NSVBE99XGH108171
4XAVBE995GP340655 – 4XAVBE997GB673744

The VIN is normally located on the driver’s side rear frame rail, above the PVT cover. Check your Owner’s Manual if you have any difficulty locating the VIN. VINs are not sequential and not all VINs in the ranges above are included in this recall. To determine if a specific ROV is included in this recall visit www.Polaris.com and click on “Off-Road Safety Recalls” under the “Rider Community” heading on the main page of the Polaris website.

The ROVs were sold at Polaris dealers nationwide from July 2012 through April 2016 for between $16,000 and $26,000. The ROVs were manufactured in the United States and Mexico and imported and distributed by Polaris.

Due to the serious risk of injury, owners and riders should stop using these recalled vehicles immediately. Repairs will start April 22, 2016. To schedule a free repair, consumers should call their local Polaris dealer. Contact Polaris at 800-POLARIS or 800-765-2747 from 8 a.m. to 9 p.m. CT Monday through Friday and 9 a.m. to 5 p.m. CT Saturday and Sunday or online at www.polaris.com and click on “Off-Road Safety Recalls” on the main page of the Polaris website.

In a company press release Polaris CEO Scott W. Wine stated,

“One of our foremost guiding principles is Safety and Ethics Always…We know that the foundation of a good ride is a safe ride, and we have been proactive, aggressive and thorough in putting forth a plan to get our vehicles repaired and give us – and our customers – confidence in the safety of our RZR vehicles. We are working day and night to inform our customers and dealers and to obtain the parts needed for the repairs we identified in our comprehensive analysis. We apologize for the inconvenience to our customers as we work to ensure all the systemic thermal risks we identified are eliminated from our vehicles.”

Polaris is instructing riders not to carry fuel or other flammable liquids in their vehicles.

Learn more: CPSC.gov

Comment: I believe this is the largest recall by far of any side-by-side vehicle. The most recent very large side-by-side recall was from Kawasaki last year that involved about 20,000 vehicles. With 133,000 vehicles involved, the cost of repairing the vehicles could be substantial. Although Polaris has more than enough financial resources to absorb the costs, they are likely concerned to the hit their brand image may take. Not only are they the market leader but the company emphasizes their engineering excellence and innovation.

Can-Am Launches 6-Passenger Defender Max Models

Posted on April 14, 2016 by Marc Cesare

The new 2017 Defender MAX DPS HD8 from Can-Am in Mossy Oak Break-up Camo.

The new 2017 Defender MAX XT HD10 from Can-Am in Intense Red.

Can-Am has expanded their line of Defender utility-recreational side-by-side vehicles with the addition of four 2017 Can-Am Defender Max models. The six passenger Defender Max model is available with either a 72-hp HD10 or 50 hp HD8 Rotax V-twin engine and as an XT version with factory installed accessories. Key standard features for all Defender MAX models include:

PRO-TORQ transmission with Quick-Response System
Three driving modes and a four-mode traction system with Visco-Lok QE front differential
1,750 lb. payload capacity
2,000 lb. towing capacity
1,000 lb. dumpable cargo bed
Cargo bed tie-down points and recesses for five gallon buckets
Removable toolbox
Dynamic Power Steering (DPS)
10″ of front and rear suspension travel
10″ of ground clearance
Integrated front steel bumper
Central skid plate
2″ hitch receiver
Adjustable tilt steering

The four models introduced by Can-Am include the Defender MAX DPS HD8, Defender MAX DPS HD10, Defender MAX XT HD8 and Defender MAX XT HD10. The XT versions add the following:

14″ rather than 12″ aluminum wheels
27″ Maxxis Bighorn 2.0 tires instead of 26″ Maxxis M923/924 tires
4,500-lb. winch with roller fairlead
Full skid plate
Full hard roof
Adjustable driver seat
XT seat skin

The MSRPs for the new models are as follows:

Defender MAX DPS HD8 – $14,399
Defender MAX DPS HD10 – $16,299

These models are available in Green, Yellow or for $800 more Mossy Oak Break-up Country Camo.

Defender MAX XT HD8 – $17,199
Defender MAX XT HD10 – $19,099

The XT models are available in Pure Magnesium Metallic, Intense Red or for $100 more Mossy Oak Break-up Country Camo. BRP is targeting “global tradesman, hunters and farmers” with these new models. Learn more: Can-am.brp.com

Yamaha Recalls YXZ1000R Side-by-Sides

Posted on April 14, 2016 by Marc Cesare

The 2016 Yamaha YXZ1000R in red and white is being recalled as well as the following 2016 model year versions.

The YXZ1000R in orange.

The special edition YXZ1000R-SE in yellow.

The 2016 Yamaha YXZ1000R in blue and white being recalled.

The YXZ1000R in blue and white being recalled.

Yamaha is recalling approximately 7,000 2016 YXZ 1000R and 1000R SE side-by-side utility vehicles due to the potential of water freezing in the throttle cable and posing a crash hazard. No injuries or incidents have been reported related to the potential hazard. The following is the recall information from the Consumer Product Safety Commission.

Hazard: Water can get into the throttle cable and if it freezes during cold weather, the ice can prevent the throttle from returning to idle. This can cause the rider to lose control, posing crash and injury hazards.

Units: About 7,000

Description: This recall involves model year 2016 YXZ1000R and YXZ1000R SE Side-by-Side utility vehicles sold in four colors: orange and black, blue and white, silver and red, and yellow and white. The model name (YXZ…) and “1000” is displayed in a graphic on both the left and right side of the vehicle. The vehicle identification number (VIN) is stamped on the frame near the driver’s side rear wheel. The letter G in the 10th position of the VIN number indicates that the unit was made in the 2016 model year.

Incidents/Injuries: None reported

Remedy: Consumers should immediately stop using the recalled utility vehicles and contact their local Yamaha dealer to schedule a free repair. Yamaha is contacting all registered owners directly.

Sold at: Yamaha side-by-side dealers nationwide from September 2015 to February 2016 for between $19,800 and $21,600.

Distributor(s): Yamaha Motor Corporation USA, of Cypress, Calif.

Manufactured in: USA

Learn more: CPSC.gov

Comment: This recall is relative large in size but more importantly for Yamaha it involves their newest entry into the high-end recreational segment. After their problems with the Rhino, Yamaha had not been active in that market segment for a number of years before the introduction of the 2016 YXZ1000. While in the long run the recall should not be detrimental to their efforts, they would have preferred a recall free re-entry into the recreational side-by-side market.

Club Car Accessory Packages for Carryall Models

Posted on April 12, 2016 by Marc Cesare

Club Car is targeting the commercial market with the Carryall 700 and other vehicles.

Club Car is targeting the commercial market with the Carryall 700 and other Carryall models.

Club Car continues their targeting of commercial markets with the launching of commercial accessory packages for their Carryall utility vehicles. They are offering model specific packages for the Carryall 300, 500, 550 and 700. The packages are available for gas or electric models. The package for Carryall 300 utility vehicles includes:

A cargo box
Tailgate tethers
Heavy-duty trailer hitch
Tail lights, brake lights, turn signal and horn

The package for the Carryall 500 utility vehicle includes:

A cargo box
Tailgate tethers
Improved ride quality
Tail lights, brake lights, turn signal and horn

The package for the Carryall 550 utility vehicle includes:

A cargo box
Tailgate tethers
Heavy-duty trailer hitch
Tail lights, brake lights, turn signal and horn
Heavy-duty brush guard
Improved ride quality

The package for the Carryall 700 utility vehicle includes:

A flat bed
Heavy-duty brush guards
Tail lights, brake lights and horn

According to Club Car the packages are less expensive compared to purchasing each accessory separately. The accesory packages for each model are “…based on a detailed analysis of buying patterns of commercial companies, so it includes the accessories most commonly ordered for that vehicle by customers…”. Learn more: Clubcar.com

Comment: Club Car has been rolling out a number of products and services over the past year or so specifically targeting commercial segments. They have launched the new Carryall vehicles, new accessories, fleet management and maintenance services and now these accessory packages. With the decline and now stagnation in the golf car fleet market, the golf car manufacturers are looking to commercial and other non-fleet markets to boost sales of vehicles as well as parts, accessories and related services. Club Car is marketing to specific verticals, which they have defined as Resorts, Education, Non-Industrial Rentals, Industrial Rentals and Government.

$230 Million for California’s Clean Vehicle Rebate Program (CVRP)

Posted on April 7, 2016 by Marc Cesare

Source: SVR based on CVRP data.

The California Air Resources Board (ARB) is proposing $230 million in funding for the California Clean Vehicle Rebate Program (CVRP) for fiscal year 2016-2017.

CVRP offers vehicle rebates on a first-come, first-served basis for light-duty ZEVs, plug-in hybrid electric vehicles (PHEVs), zero-emission motorcycles, and neighborhood electric vehicles. Rebate amounts are $2,500 for battery electric vehicles (BEVs); $1,500 for PHEVs; $5,000 for fuel cell electric vehicles; and $900 for zero-emission motorcycles and neighborhood electric vehicles. As of February 1, 2016, the CVRP has rebated over $291 million, covering 137,000 vehicles.

NEVs have been a small portion of these vehicles, totaling only 147 vehicles and just over $151,000 in rebates from 2010 to 2016, according to the CVRP statistics. One issue is that there have been only four brands that have been eligible for the rebates including GEM, Miles, Vantage and EVI eMega. By far GEM has been the most prevalent NEV in the program, accounting for 111 of the 147 vehicles. However, the model year 2014 and 2015 vehicles have not been eligible because the do not meet CVRP performance requirements. According to the CVRP website there are no current model year NEVs eligible for the rebate. As the above chart shows, there has been a significant drop-off in NEV rebates since 2013.

Source: SVR based on CVRP data.

Only 35% of the NEV rebates went to businesses, 34% to federal, state or local governments and 22% to individuals with the remainder to non-profits. These figures are not that surprising as GEM sells mostly to commercial customers. Learn more: Cleanvehiclerebate.org

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