Polaris Issues Massive RZR XP 1000 Recall

Polaris RZR XP 1000

The Polaris 2014 RZR XP 1000 in Pearl Black is one of the models being recalled.

Polaris has once again had to issue a major recall of over 100,000 side-by-sides. The recall involves approximately 107,000 model year 2014 to 2018 RZR XP 1000 and RZR XP 4 1000 vehicles. The exhaust silence can fatigue and crack leading to too much heat for the heat shield to manage which in turn lead to components melting or fire. Consumers should immediately stop riding the affected vehicles and contact a Polaris dealer for a free repair. The following recall information is from the Consumer Product Safety Commission.

Name of product:  Model Year 2014-2018 Polaris RZR XP 1000

Hazard:  If the exhaust silencer fatigues and cracks, the heat shield may not manage heat, which may lead to melting of nearby components or fire.

Remedy:  Repair

Recall date:  April 2, 2018

Units:  About 107,000

Recall Details

Description:
This recall involves Model Year 2014-18 Polaris RZR XP 1000 recreational off-highway vehicles (ROVs). The ROVs have “POLARIS” stamped on the front and back grilles, and “Polaris,” “RZR,” “1000,” & “XP” stickers on the side panels. The Vehicle Identification Number (VIN) can be found on the right rear frame of the vehicle, to the rear of the engine. See CPSC.gov for specific model numbers.

Remedy:
Consumers should immediately stop riding the affected vehicles and contact a Polaris dealer for a free repair.

Incidents/Injuries:  Polaris has received 30 reports of cracked exhaust silencers, including 3 reports of fire. No injuries have been reported.

Sold At:  Polaris dealers nationwide since December 2013.

Manufacturer(s):  Polaris Industries, Inc., of Minn.

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

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

Manufactured In:  United States and Mexico

Recall number:  18-133

Consumer Contact:  Polaris at 800-765-2747 from 7 a.m. to 7 p.m. CT Monday through Friday or online at www.polaris.com and click on “Off Road Safety Recalls” at the bottom of the page for more information. In addition, check your vehicle identification number (VIN) on the “Product Safety Recalls” page to see if your vehicle is included in any recalls. Polaris is contacting all known affected consumers directly.

SVR’s Take:   This is yet another massive recall for Polaris. The company was just starting to rebound from the previous rounds of RZR and Ranger recalls. Some of these models pre-date the company’s efforts to implement a new quality system and add personnel to address issues while others are from after that effort. It appears that either the silencer component was either poorly made or not designed robustly enough to perform the task. In some ways this recall may be worse the prior ones since the management has taken steps to remedy the quality issues but they yet again have a large recall. The Polaris brand will likely take a hit from this. Occasionally the company provides some brand metrics in their presentations to analysts and it will be interesting to hear what the management says about the recall in the next earnings call.

JLG Unveils UTVs for Rental Market

JLG 615G rental market UTV

The new JLG 615G UTV developed by JLG and Textron for the rental market.

JLG 315G UTV

The three person JLG 315G UTV for the construction and event site rental markets.

JLG, a leading manufacturer of telehandlers, booms and aerial work platforms is entering the utility vehicle market, or at least a very specific slice of it. The 3-passenger JLG 315G and six-passenger JLG 615G UTVs were developed for the rental market. The company knows this space well from products like aerial work platforms, which is predominantly a rental market. The UTVs were developed in partnership with Textron Specialized Vehicles and based on an Arctic Cat vehicle platform. (In 2003 JLG had acquired a telehandler business from Textron.)

JLG reasons that they can better serve the rental market since they already have relationships with rental companies, and, therefore, can simplify inventory management and more easily provide parts and service. In addition, the UTVs were designed for the construction and event sites that rental companies serve. Durability, reliability and safety are important equipment requirements for these end-use applications where renters rather than owners can abuse them. Some of the key features designed with this in mind include:

  • Front bumper
  • Boot guards
  • Steel braided cables
  • Skid plates
  • Dupont surlyn hood
  • Beefed up braking system and axles engineered by JLG parent company Oshkosh
  • 1,000 lbs dump bed that can accommodate a full skid
  • 25 gal. under-hood storage
  • Contoured seats with extra shoulder room and individual headrests
  • Generous room for exit/egress

Other specs include:

  • 45 hp, 695cc four-valve, single cylinder gas engine with fuel injection
  • Engine braking system
  • Electric shift-on-the-fly 2/4WD with 4WD Lock
  • Duramatic CVT transmission
  • 4-wheel hydraulic disc brakes
  • 26” tires
  • 10” of suspension travel
  • 10” of ground clearance
  • 1,500 lbs. towing capacity

In the future diesel versions are expected to be available.

Learn more:  Compactequip.com  and JLG.com

 

SVR’s Take: This seems like a smart way for JLG to enter the UTV market, though I think this product introduction is primarily about the company exploiting their existing distribution channel and relationships than a strong interest in entering the UTV market as a whole. This is a simple add-on to their existing product offerings and Textron is doing the heavy lifting on the product development and manufacturing end. For Textron this is another way to target the commercial segment. They already have partnerships with Caterpillar and Toro via Arctic Cat for this segment. These UTVs is another way to utilize partnerships to expand their distribution channels for commercial markets without having to develop a specific network of commercial dealers. A quick check of the leading rental companies indicate that John Deere, Kubota, Bobcat and Club Car vehicles are currently available in the rental space. Polaris has a partnership with Bobcat to develop utility vehicles. Bobcat already provides a range of equipment to the rental market.

Marc Cesare, Smallvehicleresource.com

Polaris Introduces 2019 Ranger Crew XP 1000

2019 Polaris Ranger Crew XP 1000 EPS

The new 2019 Polaris Ranger Crew XP 1000 EPS in Sunset Red Metallic

Polaris Industries announced their new 2019 Ranger Crew XP 1000 with a host of improvements driven by owner feedback. The six-passenger Ranger Crew XP 1000 features a 82 hp ProStar 1000 engine, 2,500 lbs. of towing capacity, 1,750 lbs. of payload capacity and 13″ of ground clearance. Some of the key features and improvements for the 2019 Ranger Crew XP 1000 include:

  • High Performance On-Demand True AWD/2WD/VersaTrac Turf Mode
  • More rigid chassis
  • Redesigned heavy-duty PVT clutch system
  • Sealed suspension bushings
  • Crew-specific tuned shocks and springs
  • 1,000 lbs. cargo box capacity
  • EPS
  • 26″ tires (base model)
  • 11″ of front and rear suspension travel
  • 10% tighter turning radius
  • Thicker and more durable cut and sew seats
  • 5″ of additional clearance for front and rear seat entry and egress
  • New digital/analogue gauge
  • New flip-up front and rear seats and new under-seat-pass-through for better storage
  • Double glove box
  • 8 cup holders
  • Full body skid plate
  • Large front bumper with an integrated Polaris Glacier® plow mount as well as mounting points for lighting accessories and a Polaris winch

The Ranger Crew XP 1000 EPS comes in several trims including the base model in Sage Green with an MSRP of $16,299, the Sunset Red Metallic version for $17,4999 and the Polaris Pursuit Camo version for $17,699. The latter two include an adjustable driver seat, 27″ Maxxis MU51 tires and Aluminum Black Xcelerator 2.0 wheels in addition to their special paint and graphics.

There is also the Ranger XP 1000 EPS Northstar HVAC Edition which features the tire and wheel upgrade as well as a factory-installed heating and air conditioning system and the new, premium RANGER Pro Shield™ cab system. The cab has improved dust protection and air flow to the front and rear, crank window doors and a wiper/washer system. This model comes in Sunset Red Metallic and is available for $26,499. These models will be available at local Polaris dealers in late April.

Learn more:  Businesswire.com and Polaris.com

 

Can-Am Launches Maverick Sport UTVs

2019 Can-Am Maverick Sport

The new Maverick Sport UTV lineup from Can-Am targets recreational trail riders.

Can-Am announced the addition of the new 2019 Maverick Sport models to their lineup of UTVs. The 60″ wide vehicles will be available in two packages:  the Maverick Sport, and the Maverick Sport DPS which has two engine options. The lineup targets recreational trail riders. “The new Can-Am Maverick Sport is the best side-by-side vehicle we have ever developed for sporty trail riding,” said Bernard Guy, Senior VP, Global Product Strategy. “With Can-Am ingenuity, awesome Rotax power and incredible handling and comfort, they’re the perfect choice for people who want to tackle off-road adventures and challenges.” The vehicle launch continues Can-Ams four year plan of releasing new models every 6 months.

The base model Maverick Sport features and specs include:

  • 75 hp Rotax 976 cc engine with EFI
  • Quick Response System (QRS) CVT with high airflow ventilation and Electronic Drive Belt Protection Extra
  • Selectable 2WD / 4WD with Visco-Lok auto-locking front differential
  • Electronic hill descent control
  • 11.5″/12″ of front/rear suspension travel
  • FOX 2.0 Podium shocks
  • 12″ of ground clearance
  • 27″ Maxxis Bighorn 2.0 tires
  • 12″ Cast aluminum wheels
  • Dual 220 mm ventilated disc brakes with hydraulic twin-piston calipers
  • 300 lb cargo box capacity
  • 1,500 lb. towing capacity
  • Digital multifunction gauge
  • 55W reflectors and LED taillights
  • Front steel bumper
  • Full skid plates
  • Premium half doors
  • Mudguards
  • Adjustable tilt steering
  • Available in White
  • MSRP:  $14,699

The Maverick Sport DPS 1000, available in Can-Am Red, adds dynamic power steering and headlights with unique Can-Am LED signature, and has an MSRP of $16,499.

The Maverick Sport DPS 1000R features a 100 hp engine for an MSRP of $17,999 and is available in Can-Am Red or Sunburst Yellow.

Learn more:  Can-Am.com

SVRs Take:  The Maverick Sport line is essentially replacing Can-Am’s Commander lineup. The Sport line features more horsepower, more suspension travel, a slightly wider stance, significantly longer wheelbase (about 14″), upgraded transmission but only half the cargo box capacity. The Commander line had not been performing as well as the other product lines according to management comments in recent quarterly earnings calls. Expect to see four passenger and special edition Sport models to be added in the future, possibly in 6 months time, if past product line build outs are any indication.

Marc Cesare, Smallvehicleresource.com

U.S. Marines Testing Nikola Electric UTV

Electric Nikola Reckless UTV

The Nikola Reckless UTV on test by the US Marines.

The US Marines are testing modified versions of the Nikola NZT electric UTV. Named the Nikola Reckless UTV after a decorated Korean War military horse, Sgt. Reckless, the vehicle can be outfitted with a range of weaponry including a 7.62mm machine gun, 12.7 mm gun, 40 mm MK19 automatic grenade launcher or Javelin anti-tank guided missiles. The four-person vehicle includes an “an infra-red beam that can be used with night vision and a remote weapons system machine gun that can be controlled by a joystick anywhere in the vehicle. It’s light enough to go on a MV-22 osprey,” according to Andy Christian, Nikola’s Director of Defense. The company invested $500,000 to build four prototypes and the production military model will cost around $85,000.

The consumer version of the Nikola NZT can be configured several different ways depending on the number of motors and the size of the battery pack, which is available in 75Wh, 100Wh and 125 Wh. The most powerful four motor configuration delivers 555 hp and 4,900 ft-lbs of torque. The base model starts at $28,900.  Learn more:  OCRegister.com

SVR’s Take:  Given the high price of the Nikola NZT, Nikola Motors is smart to target the military market that can afford the cost of such a cutting edge vehicle. Electric vehicles fit into the US military’s ongoing efforts to reduce their dependence on fossil fuels. Special forces in particular already make widespread use of UTVs and ATVs. An electric UTV offers several advantages that could be critical in a combat zone including reduced noise, greater acceleration and reduced maintenance. I would imagine the biggest concerns would be the range of the vehicle, charging time and what options are available for re-charging the vehicle in a combat zone.

This effort puts Nikola Motors in direct competition with Polaris Industries which has a growing defense business that is largely based on military versions of their gas-powered RZR UTVs and their ATVs. It will be interesting to see if this draws any response from Polaris. They offer an electric Ranger and have a host of non-off-road electric vehicles like GEM, Taylor-Dunn and Goupil, but they have not put much emphasis on electric UTVs based on their consumer facing websites and marketing material.

Marc Cesare, SVR

Polaris Introduces The RZR XP Turbo S

Polaris RZR SP Turbo S

The new Polaris RZR XP Turbo S features 32″ tires, 16″ of ground clearance and 168 hp turbo engine.

Polaris RZR SP Turbo S

The RZR XP Turbo S has 25″ of usable front and rear suspension travel.

Polaris introduced their new, top-of-the-line RZR, the 72-inch RZR XP Turbo S. The RZR XP Turbo S was completely “redesigned and reengineered” with a reinforced chassis, stronger axels and other strengthened components. Like other high performance RZRs this model is powered by a 168 hp ProStar turbo H.O. engine. Rather than bump up the horsepower, Polaris beefed up almost every other aspect of the vehicle. The XP Turbo S features 32″ ITP Coyote tires 16″ of ground clearance and 25% more assist in power steering. This model also has the Dynamix Active Suspension system, 19″ or 21″ of wheel travel depending on settings and 25″ of what Polaris refers to as useable travel to the skid plate. The drive system is the new Isolated Xtreme Performance True On-Demand AWD/2WD with greater front drive impact strength, improved throttle control and a redesigned clutch box “..for better air flow and decreased belt temperatures.”

Other key specs and features of the RZR XP Turbo S include:

  • 4-Wheel Hydraulic Disc with Triple-Bore Front and Dual-Bore Rear Calipers
  • EPS
  • 2.5″/3″ FOX Podium Internal Bypass Shocks with Live Valve
  • Premium Sparco Steering Wheel
  • Bolstered Bucket Seats with 4-point Harness
  • Aluminum Roof
  • Bowed 1/4 Doors
  • Front Blacked Out White LED Low/High w/ Accent Lights & Rear Red LED Tail / Brake / Accent Lights
  • Rear Wired Camera
  • RIDE COMMAND™ 7” Glove-Touch Display with DYNAMIX Visualizer
  • Built-In GPS
  • Bluetooth & USB Smartphone Connectivity
  • GoPro® Control
  • In-Vehicle Communications Capable
  • Ride Command App Integration

The RZR XP Turbo S is available in Indy Red or Polaris Blue and has an MSRP of $27,499. The vehicle will be available at dealers in mid-March.  Learn more:  Polaris.com

SVR’s Take:  After years of manufacturers coming to market with new models with more horsepower the RZR XP Turbo S went in a different direction. They really focused on the ride and suspension as well as the ability of the vehicle to take a beating when powered by such a large engine. This introduction may signal that there are diminishing returns for increasing horsepower and/or that the rest of the vehicle features need to catch up with power of the engine. This could signal a market move towards focusing on durability, handling and creature comforts. How will other manufacturers in the market respond?

Mahindra Reveals Roxor Turbodiesel UTVs

Mahindra Roxor

The new Mahindra Roxor utility vehicle powered by a 62 hp urbo diesel.

Mahindra Roxor LE

The Mahindra Roxor LE adds features like a winch, soft top, LED light bar and more.

Mahindra, a well-known auto and tractor manufacturer, revealed two new turbodiesel powered utility vehicles, the Roxor and Roxor LE. The 152cc engine puts out 62 hp at 3,200 rpm and 144 ft lbs of torque at 1,400 rpm. The retro styled exterior is reminiscent of a classic Jeep and is married to a boxed steel frame. The Roxor seats two, has a top speed of 45 mph and 9″ of ground clearance. Both models are targeting recreational users. The vehicles are assembled in Mahindra’s Auburn Hills, Michigan plant. Other key specs include:

  • 3,490 lbs towing capacity
  • 349 lbs cargo capacity
  • 5 speed transmission
  • Selectable 2WD/4WD
  • Rigid leaf spring front suspension with stabilizer bar
  • Leaf spring rear suspension with hydraulic shock absorbers
  • Hydraulic front disc and rear drum brakes
  • Hydraulic power steering
  • Halogen headlights
  • Underseat storage
  • Available in Carbon Black, Classic White, Fire Orange or Tahoe Blue
  • MSRP:  $15,499

The Roxor LE adds the following features:

  • Bestop Bikini soft top
  • Warn 8,000 lb. winch
  • HD front bumper with mounting plate and HD battery
  • 40″ KC HiLites Light Bar
  • BF Goodrich KO2 radial off-road tiers
  • MTX AM/FM bluetooth sound bar
  • Side and rearview mirrors
  • ROPS mounted grab handles

The MSRP for this limited edition model is $18,899. Company marketing material indicates a Dune Edition will be coming later in California.

A marketing program to support the new vehicles will be launched this Spring and the vehicles will be available from over 240 Mahindra powersports dealers in the US.

Learn more: Roxoroffroad.com

SVR’s Take:  I think the very Jeep-like look could prove popular, although not everyone may want a diesel powered UTV. The styling really sets the vehicle apart in a market where there are plenty of options and more seem to materialize every day. If it proves popular I wouldn’t be surprised to see some of the larger players in the market come out with similar styling.

This is another example of an agricultural equipment company more aggressively moving into the UTV market to take advantage of their existing distribution channel. However, Mahindra appears to be putting more resources in the most by designing and manufacturing the vehicles themselves, and establishing dedicated new facilities in the US.

A quick perusal of their dealer network shows a large number of agricultural and power equipment dealers. The diesel powertrain makes the UTV a natural fit on farms. The company may have difficulty reaching beyond the farm and large area home owner market, which are a primary target given Mahindra’s popularity in the tractor market. It would appear that this vehicle could have wider appeal beyond these segments, but Mahindra may have to be creative in developing dealers or partnerships to expand the reach of their current distribution channel.

Marc Cesare, SVR

 

Kubota Updates UTV Lineup

Kubota RTV-XG850 Sidekick utility vehicle

The new Kubota RTV-XG850 Sidekick utility vehicle, gas-powered and with a 40 mph top speed.

Over the last few months Kubota has unveiled two significant model additions to their utility vehicle lineup that will be available at dealers in the first part of 2018. The first reveal was the all new RTV-XG850 Sidekick. The Sidekick is a gas powered UTV being marketed as fast, strong and agile with a 48 hp engine, 40 mph top speed, a CVT with centrifugal clutch and speed sensitive electronic power steering.

Kubota is clearly trying to expand their more work-oriented customer base with the faster, crossover oriented Sidekick. However, the RTV-XG850 still maintains solid work specs with a 15.2 cu. ft. and 1,000 lb. capacity steel cargo box and a 2,000 lb. towing capacity. The cargo box has an optional electric hydraulic lift.

Additional features of the Sidekick designed to widen the vehicle’s appeal include:

  • Improved ergonomics with a new digital display, steering wheel and shift knob
  • LED headlights
  • Green and Black color options beyond the traditional Kubota Orange and RealTree AP Camo choices
  • Sidekick specific accessories including a premium audio system, sports roof, alloy wheels and bed extender

Other key specs and features of the Sidekick include:

  • Selectable 2WD/4WD with limited slip front differential
  • 4-wheel hydraulic disc brakes
  • Front and rear independent suspension
  • 9″/8.5″ of front/rear suspension travel
  • 9.8″ of ground clearance
  • Tilt steering
  • Front guard (standard on Worksite and Special variations)
  • Optional spray-on bed liner

The Sidekick will come in three different variations:  General Purpose, Worksite and Special. The Special comes with a front guard, alloy wheels, tilt steering and spray-on bed liner standard. The Worksite comes with the front guard and tilt steering standard. The General Purpose does not come standard with any of these options. The Kubota RTV-XG850 Sidekick will be available at dealers in Spring 2018. A quick internet search shows pricing in the $13,000 to $14,500 range.

The other addition to the Kubota UTV lineup is an updated version of the RTV-X1120, a heavy duty work-oriented utility vehicle. The updated model comes with a significantly lower price tag compared to the older version, $13,999 compared to approximately $16,000.

The RTV-X1120 is powered by a 24.8 hp diesel engine and has a Variable Hydro Transmission, a top speed of 29 mph and 4WD with limited-slip front differential and foot operated rear differential lock. Kubota aimed to improve ergonomics and styling with new shoulder restraints, ergonomic 60:40 split bucket seats, digital display, easily accessible parking brake and under seat storage compartments.

Additional key features and specs include:

  • Hydraulic power steering
  • Steel cargo box with optional hydraulic lift
  • Front and rear standard 2″ hitch receivers
  • 1,300 lb. towing capacity
  • Optional machine-polished alloy or black alloy wheels
  • Optional spray-on bed liner
  • Colors:  Kubota Orange or RealTree AP Camo

The RTV-X1120 will be available in General Purpose, Worksite and Deluxe configurations with a starting base price of $13,999 The new RTV-X1120 models will be available at Kubota dealerships in February 2018.

Learn more:   Kubotausa.com

SVR’s Take:  The work and multi-purpose use segment of the UTV market has become more competitive over the last several years as manufacturers have identified the segments as key growth areas. No doubt Kubota has felt the encroachment of this competition on their traditional customer segments of farm, ranch, large area home owners and construction. This has come from larger brands such as Can-Am with their new Defender line, Honda with their expanding Pioneer line and market leader Polaris with their dominant Ranger line, as well as from smaller brands like the value oriented and expanding Cub Cadet Challenger line and the likes of Toro and New Holland that have partnered with larger UTV manufacturers to develop vehicles to sell under their own brands. The most recent in the latter category is the construction oriented Caterpillar.

As the pace of new model development in the UTV market has increased in the last five years, one could argue that Kubota has been at the slower end of the scale among the large manufacturers. The Sidekick in particular may be an indication that Kubota will be accelerating their product development moving forward with an eye towards expanding their appeal. A key difficulty for Kubota in growing their customer base will be how to reach new customers with their existing farm and construction oriented dealership network. They may look to add new types of dealers or partner with other companies to reach new distribution channels.

Marc Cesare, SmallVehicleResource.com

Cushman Introduces New Hauler 800 and 800X Utility Vehicles

Cushman Hauler 800X

The new Cushman Hauler 800X from Textron Specialized Vehicles.

Cushman Hauler 800

The new Cushman Hauler 800 from Textron Specialized Vehicles.

Cushman, a brand under the Textron Specialized Vehicles umbrella, recently announced new, upgraded versions of their Hauler 800 and 800X utility vehicles. Each vehicle comes in an electric powered or gas powered variant. The electric powered models feature a 48-Volt AC powertrain with a 4.4 hp motor, six 8-volt deep cycle batteries, DC PowerWise QE charger and 235 amp AC controller. The gas powered models feature a 13.5 hp Kawasaki, 4-cycle, 401cc engine.

“Customer research guided the design of the Cushman Hauler, and the new Hauler 800 and 800X provides an excellent go-to, light-duty utility option in our lineup,” said John Collins, Vice President, Consumer for Textron Specialized Vehicles. “A customizable bed, functional dash storage, and increased visibility allow the operator to be more organized and productive on the work site.” New options for the Hauler 800 and 800X include:

  • A floor mount attachment that enables you to transport and secure small equipment in the passenger area of the vehicle
  • An independent radio clip that has been ergonomically designed for easy reach
  • Glove box mat package to prevent movement of items in storage compartments

Additional key specs common for the vehicles include:

  • Seating for two
  • 8.4 cu ft of cargo deck capacity
  • Headlights
  • Brushguard
  • Optional bed divider
  • Welded Steel w/ E-Shield e-coat plus DuraShield™ Powder Coat

Some of the key differences between the Hauler 800 and the 800X include:

  • The Hauler 800 has slightly more cargo bed capacity at 400 lbs vs. 325 lbs and more towing capacity with 900 lbs vs. 500 lbs
  • The Hauler 800X has a faster top speed of 16.5 mph vs. 14.5 mph
  • The Hauler 800X has more ground clearance:  5.5″ vs. 4.3″

The Hauler 800 and 800X are available in Patriot Blue and Forest Green.

Learn more:  Cushman.com

SVR’s Take:  While the changes to the Hauler 800 and 800X are not drastic, they are very focused on the application specific needs of end users. These types of changes are indicative of how competitive the work side of the utility vehicle market has become as manufacturers tailor their vehicle offerings to specific sub-segments of the market. They are accomplishing this by adding new work specific features and offering a wider range of options and accessories for specific applications. In some cases, they are providing a pre-packaged set of options and features for certain end-use applications. This is often in the context of segment specific marketing efforts. For example, Club Car has identified certain market verticals they are strategically targeting, and Cushman is using different marketing material for commercial and golf segments for these Hauler 800 and 800X models.  These approaches demonstrate the functionality and versatility of utility vehicles that serve as a common work platform which can relatively easily be customized for a wide range of work environments and applications. Marc Cesare, SmallVehicleResource.com

 

Polaris Q4 2017 Earnings

2018 Polaris Ranger XP 1000 EPS

The 2018 Polaris Ranger XP 1000 EPS helped drive sales for the quarter and the year.

Polaris Industries reported quarterly revenue of $1.431 billion and annual revenue of $5.429 billion, representing increases of 18% and 20% respectively compared to last year. Adjusted earnings per share for the quarter increased 25% driven by higher volume, lower promotional spend and operating expense leverage. For the year a 39% increase in earnings per share was driven by a combination of increased volume, an improvement in gross margins and a lower tax rate.

The following are highlights of the earnings call related to small, task-oriented vehicles.

  • ORV sales increased 14% in Q4 and 9% for the year
  • Average ORV selling price was up 4% for the quarter
  • ORV retail was up for the year but down for the 4th quarter as retail unit sales of Off-Road Vehicles were down just under 1%
  • Ranger sales were up for the quarter with strong demand for the new Ranger XP 1000 lineup
  • RZR sales declined for the quarter driven by “tapped demand and limited product availability”
  • For the quarter the ramp up of Ranger and RZR production was slower than expected in part attributed to the new quality initiative. This manifested as a production issue with a four-wheel drive component on the Ranger XP 1000, which was originally not up to the company’s quality standard.
  • Continued roll out RFM inventory and ordering system for side-by-sides and should be fully optimized by the second quarter
  • North American industry side-by-side growth was strong in Q4 but ATVs down.
  • Utility side of ORV is expected to grow but there is stiff competition on the RZR side which will not grow as much as competition increases
  • Agriculture markets were down in the fourth quarter and oil markets were up slightly, but there was no “substantial shift” in buying patterns.
  • In the side-by-side market decreased pricing is offset somewhat by decreased promotional costs and there is some commodity pricing pressures
  • Australia was a strong market as buyers switch from ATVs to UTVs
  • Global Adjacent Markets sales increased 19% in the fourth quarter, driven by strong growth in Aixam and Goupil, as well as continued strong sales growth in Government and Defense
  • For the year Global Adjacent Markets revenue reached almost $400 million including PG&A
  • Average selling price for Adjacent Markets increasing 14% for the quarter
  • For the full year Global Adjacent Markets sales increased 16% with all business lines growing
  • In Europe there is strong demand for small, inner-city delivery vehicles including electrics and that demand is increasing in the US as well
  • “More autonomous activities with both the military and Taylor-Dunn platforms than anywhere else in the company”

Guidance for 2018

  • Total company sales are expected to be up in the range of 3% to 5% with ORV market expected to be up
  • ORV market share is expected to be stable with continued momentum from Ranger and General product lines
  • ORV/Snowmobile sales are expected to be up low to mid-single digits with Snow about flat and ORV and PG&A sales up
  • Global Adjacent Markets sales are expected to be up mid single-digit percent with growth expected in all businesses.
  • The new long-term strategic targets for the company as a whole are 5% compounded annual growth rate for revenues and 15% for earnings
  • Management will be focusing on cost leadership more while maintaining innovation

Learn more:  Seekingalpha.com (Earnings Call Transcript)