Category Archives: Sales figures

Polaris Announces Q3 2016 Results

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The Polaris RXR XP Turbo is being recalled because of a potential fire hazard.

Recalls of vehicles like the Polaris RXR XP Turbo were a drag on the company’s financial performance for the quarter.

Polaris Industries announced their financial results for Q3 2016 with third quarter sales down 19% to $1.18 billion as impacts of massive vehicle recalls are still being felt. CEO Scott Wine stated that the company is prioritizing “…recall execution and quality validation and delay the launch of many of our model year 2017 Off-Road Vehicles.” The following are highlights from the earnings call as they relate to the small, task-oriented vehicle market.

  • Off-road vehicle industry retail declined modestly (down low single digits%) for the quarter with oil/gas and agriculture segments remaining weak
  • ORV and Snowmobile segment sales declined 23% in Q3 to $923.4 million driven by weak industry dynamics and delayed model year 2017 shipments as products were revalidated
  • RZR retail dropped precipitously in the first two months of the quarter but improved significantly in the third month along with overall side-by-side retail driven by promotions and better product availability
  • Management reports that RZR recalls have now passed the 50% penetration rate for both the RZR 900/RZR 1000 recall and the more recent Turbo recall and the majority of the recalls should be completed by year end
  • Gross margins were negatively impacted by higher promotional and customer appreciation costs to bolster confidence and credibility with our Off-Road Vehicle owners
  • The Ranger 1000 has shown good early signs for sales
  • Management reports that RZR market share is nearly 2.5 times all competitors combined and Ranger share over 2 times the next largest competitor
  • Global Adjacent Markets segment revenue increased 6% to $78.5 million in Q3 driven by the prior Taylor-Dunn acquisition
  • Sales in the Defense business and Work and Transportation businesses were lower quarter-over-quarter due to delayed military orders and weak rental and B2B sales
  • RFM inventory management system will be aggressively rolled out next year and should improve ORV dealer’s ability to replenish vehicles, manage inventory and make models available to customers
  • Guidance for full year 2016:
    • ORV and Snowmobile sales are expected to be down high single digits to low double digits percent but should show some retail growth in Q4
    • Defense and Work and Transportation segment sales are expected to be up high single digits for the year

Learn more:  Seekingalpha.com (earnings call transcript)

Polaris Issues Another Large UTV Recall

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2014 Ranger XP 900 EPS White Lightning

The Ranger XP 900 EPS White Lightning is a part of another large Polaris recall that include three-passenger and crew versions of the 2014 Ranger 900 models.

2014 Ranger XP 900 Polaris Pursuit Camo

2014 Ranger XP 900 Polaris Pursuit Camo

2014 Ranger Crew 900 Solar Red

2014 Ranger Crew 900 Solar Red

On the heels of a string of large recalls of UTVs, Polaris Industries has issued a recall of approximately 42,500 model year 2014 Ranger 900 vehicles. The heat shield on the vehicle can fall off and create fire and burn hazards to riders. The recall includes Ranger XP 900, Ranger XP 900 EPS and Ranger Crew 900 vehicles, which come in various colors. The following information is from the Consumer Products Safety Commission.

Recall Details

Units:  About 42,500

Description:  This recall involves all model year 2014 Polaris Ranger XP 900, XP 900 EPS, and CREW 900 recreational off-highway vehicles (ROVs). The recalled ROVs were sold in a variety of colors and have either three or six seats and a rear box. “Ranger” is printed on the rear box, and “900” is printed on the hood of the ROVs. All 2014 Ranger 900 models and Vehicle Identification Numbers (VINs) are included in this recall. To check for recalled vehicles by VIN, visit www.polaris.com.

Incidents/Injuries:  Polaris has received 36 reports of the recalled ROVs overheating and catching on fire, including reports of three minor burns and one sprained wrist.

Remedy:  Consumers should immediately stop using the recalled ROVs and contact Polaris to schedule a free repair. Polaris is contacting all known purchasers directly.

Sold at:  Polaris dealers nationwide from April 2013 through June 2014 for between $13,200 and $16,200.

Importer(s):  Polaris Industries Inc., of Medina, Minn.

Distributor(s):  Polaris Industries Inc., of Medina, Minn.

Manufactured in:  U.S. and Mexico

Learn more:  CPSC.gov

Comment:  Polaris just lowered their financial guidance for the rest of the fiscal year because of existing recall issues and I’m sure this won’t help the situation. I think the larger issue with these recent recalls is that they potentially point to an underlying design flaw in the vehicles. In turn, this may reveal an underlying problem in their product development process that allowed the design issue to make it into production.

In the long term the sheer number of vehicles and recalls could have a negative impact on the brand. In the short and medium term, depending on how long it takes to clean up the problem in the product development process, there may be an impact on the rate of new vehicle introductions by Polaris. This has been a competitive advantage for Polaris as they produce a large range of vehicles in terms of price points and feature sets. Management frequently refers to their “armada” of models. This is important in the UTV market where an extensive and differentiated product line can target a diverse range of end use applications at a range of price points.

BRP Quarterly Results for Q2 FY2017

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Can-Am continues to build out their Defender lineup with the hunter oriented Defender Mossy Oak Hunting Edition.

Models from BRP’s Can-Am Defender product line, like the Mossy Oak Hunting Edition shown here, helped increase their market share in the utility UTV segment and drive revenue in BRP’s Year-Round products unit.

BRP, maker of Can-Am side-by-sides, recently announced their second quarter financial results for fiscal year 2017. The quarter ended July 31, 2016 and the year ends January 31, 2017.  Management reported revenues for the quarter to $856.1 million, an increase of 5.4% year over year. The increase was driven by higher wholesale in Year-Round Products, which includes ATVs, UTVs and the Spyder, and favorable exchange rates. Revenue from Year-Round products jumped 9% form $298.4 million to $326.3 million for the quarter. Gross profit increased 1.5% from $169.4 million to $172.0 million. For the first six months of the fiscal year revenue for Year-Round products increased from $696.5 million to $726.5 million. The following are some highlights from the earnings call related to the UTV market.

  • North American UTV market ended the season up mid-single digits %
  • The sport segment is down low teens % related to Polaris RZR issues, the crossover segment up mid-teens % and the utility/work segment up low teens %
  • Can-Am retail was up mid-single digits %
  • Can-Am Defender now the highest selling model in the Can-Am UTV line-up
  • Defender is performing well in New Zealand, Australia and Western Europe as well
  • Management is targeting on becoming the number 2 brand in the utility segment in two to three years
  • New Defender models will look to address other subsegments of the utility segment
  • Introduction of the Can-Am Defender and addition of new dealers increased dealer inventory but was offset by decreases in Commander and Maverick UTV inventory
  • Can-Am renewed their sponsorship agreement with NASCAR for another two years
  • The company introduced the new Maverick X3 side-by-side during the quarter
  • Management increased their full year guidance for Year-Round products from 6% to 10% revenue growth to 8% to 12%

Learn more:  BRP.com

Arctic Cat Recalls Arctic Cat 700 HDX UTVs

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2016 Arctic Cat 700 HDX

The 2016 Arctic Cat 700 HDX Hunter Edition is part of the recall.

2016 Arctic Cat 700 HDX XT TAG

The XT models like the 2016 Arctic Cat 700 HDX XT shown in Team Arctic Green are included as well.

2016 Arctic Cat 700 HDX XT

The 2016 Arctic Cat 700 HDX XT in black.

The 2017 Arctic Cat 700 HDX Crew model is also part of the recall.

The 2017 Arctic Cat 700 HDX Crew model is also part of the recall.

Arctic Cat announced a recall of approximately 4,500 utility vehicles involving all model year 2016 Arctic Cat 700 HDX and model year 2017 Arctic Cat 700 HDX Crew models. This includes the 2016 Arctic Cat 700 HDX XT variations as well. The throttle cable can stick and prevent the throttle mechanism from returning to an idle position upon release of the throttle and cause the rider to lose control, posing a crash hazard and risk of injury. So far only one injury has been reported, a wrist injury. The following information is from the Consumer Product Safety Commission.

Recall Details

Units:  About 4,500

Description:  This recall involves all model year 2016 Arctic Cat 700 HDX models and model year 2017 Arctic Cat 700 HDX CREW models within the vehicle identification number range of 300001 through 301280. The recalled utility vehicles have four wheels with side-by-side seating for three or six people. They were sold in a variety of colors including green, black, fire red, true timber camo and other colors. “Arctic Cat” is printed on the sides, front and rear of the utility vehicles. “HDX” is printed on the sides of the front fenders. The vehicle identification number on the 700 HDX CREW models is stamped into the upper frame tube under the rear of the cargo box.

Incidents/Injuries:  Arctic Cat has received 14 reports of the throttle cable malfunctioning, including one report of a wrist injury.

Remedy:  Consumers should immediately stop using the recalled side-by-sides and contact an Arctic Cat dealer to schedule a free repair. Artic Cat is contacting all known purchasers directly.

Sold at: Arctic Cat dealers nationwide from April 2015 through July 2016 for between $14,500 and $16,000.

Manufacturer(s):  Arctic Cat Inc., of Thief River Falls, Minn.

Manufactured in:  U.S.

Learn more:  CPSC.gov

Arctic Cat Reports Q1 2017 Results

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The new Arctic Cat HDX 700 Crew XT for model year 2017.

The new Arctic Cat HDX 700 Crew XT for model year 2017 helped drive sales for the quarter.

Arctic Cat recently reported financial results for fiscal year 2017 first quarter which ended June 30, 2016. Management reported sales of $104.9 million and a loss of $0.81 million for the quarter compared to $134.4 million and $1.1 million for the prior year quarter.

The following are highlights from the earnings call related to the utility vehicle market.

  • Management reported progress on expanding their dealer network, adding 17 top tier dealers in underrepresented territories during the quarter. The goal is to add 75 top-tier dealers for the FY.
  • Dealer inventory was reduced during the quarter
  • A new state-of-the-art R&D facility expansion in St. Cloud, Minnesota, which will become home for all new wheeled product development, was finished
  • Sales of ATVs and ROVs (side-by-sides) in the 2017 first quarter totaled $43.7 million, down 17.3% compared to prior-year sales of $52.9 million.
  • Sales of ROVs including Wildcat were strong while core ATV sales decreased
  • Arctic Cat ROV retail sales declined high single digits versus a ROV market up low single digits compared to prior year quarter that had tough comparables. ROV retail picked up towards the end of the quarter driven by new products.
  • New models were introduced including the 6-passenger HDX Crew UTV and the entry priced Prowler 500
  • Key marketing initiatives include Arctic Cat 360 where virtual reality headsets allow consumers visiting Arctic Cat event displays and dealerships to feel the thrill of riding an Arctic Cat Wildcat side-by-side in a realistic 360-degree world, and Wildcat stadium side-by-side races.
  • Management reports a strong rebate and incentive environment. Pricing is competitive unless you have a “hero” product that can sustain a premium price.
  • Product mix indicates some shifting to lower priced vehicles
  • Guidance for the full fiscal year includes sales of $635 million to $655 million with second half sales driven by new product launches.  ATV/ROV sales should be flat to up low single digits.

Learn more:  Seekingalpha.com (Earnings call transcript)

John Deere Recalls RSX860i Gators

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The RSX860i utility vehicle being recalled by John Deere.

The RSX860i utility vehicle being recalled by John Deere.

John Deere has announced a recall of their RSX860i Gator utility vehicles. The fuel hose could leak or separate when the fuel system is pressurized, posing a fire hazard. No injuries have been reported related to this issue. The recall is small, involving only about 240 vehicles manufactured in June 2016.

The following recall information is from the Consumer Product Safety Commission

Recall Summary

Name of product:  Utility vehicles

Hazard:  The fuel hose could leak or separate when the fuel system is pressurized, posing a fire hazard.

Recall Details

Units:  About 240

Description:  This recall involves John Deere High-Performance Gator™ RSX860i TB and RSX860i TE utility vehicles manufactured in June 2016 with serial numbers beginning with 1M0860T. The recalled utility vehicles are four-wheel with side-by-side seating for two people and have a green hood and yellow rims. A complete list of serial numbers included in this recall is on the firm’s website. The model number is printed on the hood and John Deere is printed on the cargo box. The serial number is located on the frame at the rear of the machine above the hitch.

Incidents/Injuries:  None reported

Remedy:  Consumers should immediately stop using the recalled utility vehicles and contact a John Deere dealer for a free repair. John Deere is contacting all registered owners of the recalled utility vehicles directly.

Sold at:  John Deere dealers nationwide from June 2016 through July 2016 for between $12,300 and $14,000.

Manufacturer(s):  Deere & Company, of Moline, Ill.

Manufactured in:  U.S.

Learn more:  CPSC.gov

Comment:  This is a pretty small recall compared to typical industry recalls, and it appears they caught the problem fairly quickly. It is another case where a component of the fuel system in a utility vehicle is the issue. The RSX860i was introduced in June 2015.

Kawasaki Recalls 28,000 Mule UTVs

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One of the Kawasaki Mule models being recalled.

One of the Kawasaki Mule models being recalled.

One of the Kawasaki Mule models being recalled.

One of the Kawasaki Mule models being recalled.

Kawasaki announced the recall of approximately 28,000 of their Mule UTVs because the front floor cover can be punctured by a foreign object, posing an injury hazard to riders. There has been one report of debris striking an operator’s leg. The recall covers a wide range of Mule models for model year 2015, 2016 and 2017 including the PRO-FX, PRO-FXT, PRO-DX and PRO-DXT models and related configurations. specific models affected are described below. Towards the end of last year Kawasaki recalled a large number of their Teryx recreational UTVs for a similar floor issue.

The following information is from the Consumer Product Safety Commission.

Recall Details

Units:  About 28,000

Description:  The recall involves 2015, 2016 and 2017 model year side-by-side recreational off-highway vehicles. The recalled models are 4-wheel side-by-side seating for three to six people and automotive style controls. The vehicles come in various colors. The model name is printed on the right and left front fender. The vehicle identification number (VIN) is located on the steel frame between the right front lower A-arm mounts.

Screen Shot 2016-07-08 at 9.33.55 AMScreen Shot 2016-07-08 at 9.34.21 AMIncidents/Injuries:  Kawasaki has received two reports of debris coming up from the floor cover, including one report of debris striking an operator’s leg.

Remedy:  Consumers should immediately stop using the recalled vehicles and contact their local authorized Kawasaki dealer to schedule a free repair.

Sold at:  Kawasaki dealers nationwide from July 2014 through June 2016 for between $12,000 and $16,900.

Manufacturer(s):  Kawasaki Motors Corp., U.S.A. of Foothill Ranch, CA.

U.S.

Learn more:  CPSC.gov

Comment:  This is a large recall and combined with the previous Teryx recall for the same reason brings the total number of vehicles involved to 47,500. What is disconcerting is that it seems to be a basic design flaw in that the company did not engineer the front floor boards to be strong enough to withstand normal use. On the heels of major recalls from Polaris, there are now almost a quarter million UTVs being recalled from two of the most prominent brands in the market, most from the last several model years.

Polaris Recalls 43,000 Ranger 570 UTVs

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The 2016 Polaris Ranger Crew 570 Mid-Size is one of the range of model year 205 and 2016 Ranger 570 models being recalled.

The 2016 Polaris Ranger Crew 570 Mid-Size is one of the model year 2015 and 2016 Ranger 570 models being recalled.

One of the 2015 models being recalled.

One of the 2015 models being recalled.

Polaris has announced the recall of approximately 43,000 model year 2015 and 2016 Ranger 570 vehicles due to a potential overheating and fire hazard. The recall covers a range of model variations for the two model years. The vehicles can overheat during heavy engine loading, slow-speed intermittent use and/or high outdoor temperatures and catch fire. No injuries have been reported due to the problem. This is the second very large recall from Polaris, which in April recalled 133,000 RZR UTVs.

The following information is from the Consumer Product Safety Commission.

Recall Details

Units:  About 43,000

Description:  This recall involves 2015 and 2016 model year Polaris Ranger 570 recreational off-highway vehicles (ROVs). They have either two or four seats and a rear box. “Ranger” is printed on the rear box and “570” is printed on the hood. “Polaris” is stamped onto the front grill. The ROVs were sold in several colors. The following models are included in the recall.

Model Year 2015:  Ranger 570, Ranger 570 EPS, Ranger 570 EPS HD, Ranger Crew 570, Ranger Crew 570 EPS

Model Year 2016:  Ranger 570 2×4, Ranger 570, Ranger 570 EPS, Ranger 570 EPS HD, Ranger 570 EPS ZUG, Ranger Crew 570, Ranger Crew 570 EPS

Incidents/Injuries:  Polaris has received seven reports of the recalled ROVs overheating and catching on fire. No injuries have been reported.

Remedy:  Consumers should immediately stop using the recalled ROVs and contact Polaris to schedule a free repair. Polaris is contacting all known purchasers directly.

Sold at: Polaris dealers nationwide from August 2014 through June 2016 for between $10,000 and $12,500.

Importer(s):  Polaris Industries Inc., of Medina, Minn.

Distributor(s):  Polaris Industries Inc., of Medina, Minn.

Manufactured in:  Mexico

Learn more:  CPSC.gov

Comment:  One very large recall is bad enough but a second in a matter of months could present some significant problems for Polaris. Besides the sheer cost of repairing so many vehicles, there is also the operational difficulties in handling so many repairs in a reasonable amount of time. These are both relatively short term issues, but in the long term the impact on the Polaris brand may be more critical. For a company that prides itself on innovation and engineering prowess, and, in fact, considers such prowess a strategic advantage these recalls may have more of an impact on their brand image. I would imagine they also are generating some internal soul-searching regarding their product development processes as the issues appear to point to an underlying design flaw, as opposed to a faulty part.

Kubota Recalls Over 23,000 UTVs

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The Kubota RTV400 being recalled.

The Kubota RTV400 being recalled.

The Kubota RTV500 being recalled.

The Kubota RTV500 being recalled.

Kubota has issued a large recall of their model year 2013, 2014, and 2015 RTV400 and RTV500 utility vehicles. Approximately 23,400 vehicles are being recalled because the steering shaft can break and cause loss of vehicle control. Kubota has received nine reports of shafts breaking and one injury as a result. Owners should immediately stop using the recalled utility vehicles and contact an authorized Kubota dealer for a free inspection and free repair. The following recall information is from the Consumer Product Safety Commission.

Recall Summary

Name of product:  Utility Vehicles

Hazard:  The steering shaft can break and cause the operator to lose control of the vehicle, posing an injury hazard due to risk of collision.

Consumer Contact:  Kubota Tractor Corporation at 800-752-0290 between 8 a.m. and 5 p.m. PT Monday through Friday, or online at www.kubota.com and click on More, then Safety, then Safety Notices for more information. Kubota is contacting known customers directly.

Recall Details

Units:  About 23,400

Description:  This recall involves model year 2013, 2014 and 2015 Kubota RTV400 and RTV500 series gas-powered utility vehicles. Recalled utility vehicles come in orange and camouflage and have serial numbers ranging from 10001 to 22042 for the RTV400 and 25083 to 40991 for the RTV500. The model is on the side of the unit and on the data plate on the back of the cab, between the cab and the bed. The serial number is also on the data plate.

Incidents/Injuries:  Kubota has received nine reports of shafts breaking, including one in which a consumer lost control of the vehicle and collided with a barbed wire fence, resulting in a cut on the arm.

Remedy:  Consumers should immediately stop using the recalled utility vehicles and contact an authorized Kubota dealer for a free inspection and free repair.

Sold at:  Authorized Kubota dealers nationwide from 2010 to 2015 for between $21,000 and $22,000.

Distributor(s):  Kubota Tractor Corporation, of Torrance, Calif.

Manufactured in:  United States

Learn more:  CPSC.gov

Comment:  This is a large recall. Even though the sales period stretches over several years, anything over 10,000 units let alone 23,000 is a sizable number. I would also surmise that this repair might be a more involved and thus more expensive than most recall repairs.

Honda Recalls 2016 Pioneer 1000 UTVs

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The 2016 Honda Pioneer 1000 EPS being recalled.

The 2016 Honda Pioneer 1000 EPS being recalled.

The 2016 Honda Pioneer 1000-5 Deluxe being recalled.

The 2016 Honda Pioneer 1000-5 Deluxe being recalled.

Honda has recalled approximately 3,300 model year 2016 Pioneer 1000 utility vehicles due to the front door potentially opening unexpectedly and posing an injury risk. The recall involves both 3 and 5 passenger models. (See specific model information below) Only one incident has been reported and no injuries have been reported. Vehicle owners should contact their local Honda dealer for free replacement of the front door striker plates. The following is recall information from the Consumer Product Safety Commission:

Recall Summary

Hazard:  The front door can open unexpectedly while the vehicle is in use, posing a risk of injury to occupants.

Consumer Contact:  American Honda toll-free at 866-784-1870 from 8:30 a.m. to 4:30 p.m. PT Monday through Friday or online at www.powersports.honda.com and click on Recall Information at the bottom of the page for more information.

Recall Details

Units:  About 3,300

Description:  This recall involves model year 2016 Honda Pioneer 1000 side-by-side recreational off-highway vehicles. The ROVs are motorized off-road vehicles with a steering wheel, a gas pedal, a brake pedal, bucket or bench seats, seat belts and an occupant protection structure. The recalled ROVs were sold in three-seat and five-seat models in red, silver or camouflage color. “HONDA” is printed on the front grill and rear tail gate. “Pioneer 1000” is printed on the sides of the vehicle near the tailgate. The model and serial numbers are on a certification label located at the top rear of the left front wheel well. The following model/types and serial number ranges are included in this recall:

Honda recall model info 5-16Incidents/Injuries:  Honda has received one report of an unexpected door-release incident during a dealer set-up of the vehicle. No injuries have been reported.

Remedy:  Consumers should immediately stop using the recalled vehicles and contact their local authorized Honda dealer to schedule an appointment to have the original front door striker plates removed and replaced, free of charge.

Sold at:  Authorized Honda Powersports dealers nationwide from February 2016 through April 2016 for between $14,000 and $17,200.

Manufacturer(s):  American Honda Motor Company Inc., of Torrance, Calif.

Manufactured in:  U.S.A.

Learn more:  CPSC.gov

Comment:  This recall happened relatively quickly as the vehicles were only sold in the last few months. It is not a very large recall, and not that recalls ever happen at a good time, but, since Honda has been making a stronger push into the side-by-side market in the last few years it’s not the best timing from a marketing standpoint. On a positive note, they seem to have identified the problem fairly quickly.