KYMCO Recalls UTVs: Throttle Problem

Posted on March 10, 2016 by Marc Cesare

The KYMCO 450i is one of the models being recalled.

KYMCO 450i Camoflauge

KYMCO 450i LE

KYMCO 450i Turf is also available in red.

KYMCO is recalling approximately 1,700 utility vehicles from model years 2015 and 2016 including the UXV 450i, UXV 450i LE and UXV 450i Turf. The throttle on the vehicles can fail to return to idle and cause the rider to lose control. The company has reported seven instances of the throttle failing, but no injuries. The related information from the Consumer Product Safety Commission follows.

Recall Details

Units: About 1,700

Description: This recall involves all model years 2015 and 2016 UXV 450i, UXV 450i LE and UXV 450i Turf models. Recalled utility vehicles come in the colors blue, camouflage, matte black, gold, green, red, blue and black. The model year 2015 recalled vehicles are those units with the last six numbers of the vehicle identification numbers (VIN) between 100101 and 190370. The model year 2016 recalled vehicles are those units with the last six numbers of the vehicle identification numbers (VIN) between 190371 and 260240. The VIN can be found on the frame behind the right front wheel. UXV is printed on each side of the rear cargo box and on the hood. KYMCO is printed on the side panels.

Incidents/Injuries: The firm has received seven reports of the throttle failing. No injuries have been reported.

Remedy: Consumers should immediately stop using the recalled utility vehicles and contact an authorized KYMCO dealer for a free inspection and free repair. KYMCO is contacting consumers directly.

Sold at: Authorized KYMCO dealers nationwide from June 2014 through November 2015 for between $8,000 and $8,700.

Distributor(s): KYMCO USA, of Spartanburg, S.C.

Manufactured in: Taiwan

Learn more: CPSC.gov

Comment: This is not a large recall but pretty significant for KYMCO which is one of the smaller manufacturers. They have been one of the more successful import companies selling vehicles at the $8,000 to $10,000 value price range.

Should Polaris Target Garia Next?

Posted on March 8, 2016 by Marc Cesare

Are the luxury golf cars and high-end utility vehicles of Garia appealing to Polaris?

With Polaris’ recent acquisition of Taylor-Dunn it made me wonder if Garia might make a good target as well. The European based luxury brand could be appealing to Polaris for a number of reasons.

Brand Value – The Garia brand has been around for ten years, not as established as the recently acquired Taylor-Dunn brand, but still a significant amount of time. More importantly though Garia is a luxury brand. Particularly with their new utility vehicle lineup, a high-end line of utility vehicles could be a nice overlay on the existing Polaris brands.
International Presence – With it’s strong European presence Garia would fit nicely with Polaris’ international expansion efforts. Garia could provide both expanded distribution and manufacturing options for other Polaris small vehicle brands outside the US. At the same time, Polaris manufacturing facilities could be used to reduce the cost of Garia vehicles sold in the US market.
Golf Segment Entry – The golf car segment is a major piece of the global small vehicle market, but Polaris does not have a presence in it except for the small portion of GEM owners using their vehicles for golf. The problem with the golf car segment is that it has been declining or stagnant in the US for several years and will likely remain that way for the foreseeable future. The golf car fleet market is also very price conscious and has its own interwoven distribution channel that funnels used fleet vehicles to golf car dealers. In the private transportation portion of the market used vehicles at various levels of refurbishment provide a range of choices in competition with new vehicles. However, what Garia has the potential to do is offer Polaris an entry into the golf car segment while remaining above the fray. They could avoid the price battles and target just the luxury end of the market which would require only a limited and targeted distribution network. Of course the question is if there is enough of a market there to interest them.
Complementary Vehicles – Garia vehicles would provide Polaris with golf cars and personal transportation vehicles but at the luxury end of the market that could complement the GEM brand in the personal transportation segment. Similarly the new Garia utility line could provide a higher-end vehicles sold through a complementary distribution network.
Electric Vehicles – Similar to Taylor-Dunn, the Garia product line would offer Polaris an opportunity to leverage their electric powertrain expertise and spread development costs among a larger array of vehicles.
Quality – Both companies focus on quality and the customer experience. There could be some good opportunities for knowledge transfer at many different levels for both companies.

What could be some reasons for not acquiring Garia. First, maybe Garia does not want to be acquired or their price could be too high. Second, Polaris may not see the luxury end of the small vehicle market as large enough to pursue. While luxury markets are often global, the luxury end of the small vehicle market may not be large enough even on a global scale to appeal to Polaris. Third, Polaris tends to purchase strong, established brands. Is the Garia brand strong enough and established enough to meet their needs. Fourth, Polaris may want to avoid the slow or no growth golf car segment altogether, even if the luxury end offers some growth opportunities.

Polaris Acquires Taylor-Dunn

Posted on March 8, 2016 by Marc Cesare

Taylor-Dunn is known for burden carriers and other industrial vehicles like the B-150.

Polaris Industries announced their acquisition of Taylor-Dunn, a leading manufacturer of industrial vehicles. Taylor-Dunn will become a wholly owned subsidiary of Polaris. It will continue to be a distinct brand and operate from its current headquarters and manufacturing facilities in Anaheim. Taylor-Dunn will become part of the Polaris’ Work & Transportation division along side GEM, Goupil, Mega and Aixam in the Global Adjacent Markets business.

Just last week I was telling my colleague Stephen Metzger that I thought Taylor-Dunn and perhaps even Garia would be good acquisitions for Polaris. Taylor-Dunn is an excellent fit for Polaris for the following reasons:

Brand Value – Similar to GEM before their acquisition by Polaris, Taylor-Dunn has a strong brand in a niche market that has not fully been exploited as innovation and product development has been relatively slow over the past decade.
Innovation & Knowledge – Polaris has a strong tradition of product innovation driven by customer research. This should pair well with Taylor-Dunn that can offer a deep knowledge of the industrial vehicle market.
Electric Powered Vehicles – The Taylor-Dunn product line provides another vehicle platform for Polaris to leverage their growing electric vehicle expertise. It provides not only revenue opportunities but more vehicles over which they can spread electric powertrain development costs.
Complementary Market – Polaris has been expanding into different segments of the small vehicle market, especially commercial markets, but does not have a strong presence in the burden carrier and industrial segments.
Distribution – Taylor-Dunn’s distribution network consists largely of material handling companies. Polaris has a limited number of dealers in this channel. This new dealer network provides an opportunity for Polaris to place their other Work & Transportation brands such as GEM into this distribution channel.
International Presence – Taylor-Dunn has approximately 50 distributors outside the US and Canada. Polaris has been expanding their sales and manufacturing assets internationally in the small vehicle market. In the future, they could use their international manufacturing facilities to make Taylor-Dunn vehicles more cost effective in foreign markets.
Efficiency – Part of the Polaris success story has been their cost efficiency in many aspects of their business. There is likely some good opportunities for knowledge transfer and some fat to be trimmed at Taylor-Dunn.

Learn more: Polaris.com

What’s Cooking on the STOV: Mining Vehicles

Posted on March 7, 2016 by Marc Cesare

Highlighting some of the many applications for Small, Task-Oriented Vehicles

A Gravely utility vehicle ready for work at a local mining operation.

A Gravely utility vehicle ready to go to work at a local mining operation.

Fifth Gear Powersports of Elko, NV recently won several Reader Choice Awards sponsored by their local newspaper, the Elko Daily Free Press. No doubt their dedication to the local off-road bike and UTV scene is a big reason for their popularity, but they also cater to the local mining industry. They started by selling LED lights used for off-road night riding to the local mining operations. They also sell a variety of UTV vehicles from brands such as Kawasaki, Gravely and Polaris for use in underground mines. The utility vehicles must be configured to meet Mine Safety and Health Administration standards. Fifth Gear services the vehicles and has a washing bay at their facility for cleaning utility vehicles that come directly from a mine. Learn more: Elkodaily.com

2016 GEM Line Looks Like A Success

Posted on March 2, 2016 by Marc Cesare

The new GEM product line for model year 2016.

The new GEMs for model year 2016.

A recent conversation with a GEM dealer indicates that the newly designed 2016 GEM product line will be a success. In November I spoke with John Stockman, Director of GEM about the new 2016 line of GEM vehicles. I wanted to follow-up that article with a dealer’s perspective of the line now that it has been in the market. To that end I spoke with Andy Kaplan of Dominion Utility Vehicles of Bedford, Virginia, which carries the GEM line along with Gravely and Brutus utility vehicles. Polaris manufactures all three of these brands.

While December through February are typically a slow season for Kaplan, he has been selling GEMs at a rapid rate this year. In fact, we conversed while he and his loaded vehicle trailer were calling on customers for test drives and to deliver a price quotes. He is still following up leads from a trade show six weeks ago. Kaplan typically sells vehicles to colleges and universities, hospitals and real estate developments where GEMs are used for security, maintenance and people transport.

Polaris significantly re-engineered the GEM line for 2016. They made changes to the body design, added more cabin space, improved the doors and added more door options, introduced their Smart Power concept, and expanded options and accessories for the utility model. According to Kaplan, the changes have all hit the mark and are winning over customers. The new doors and additional cabin space are probably the most critical changes driving customer interest. As Kaplan observes, these changes give the GEM a more car-like feel. He believes they have helped position the GEM in it’s own market niche between golf car based vehicles and fully functional automobiles.

Kaplan expects to double his GEM sales this year driven by both the new 2016 line, and by virtue of the new line being part of a Virginia state purchasing contract. The latter allows state colleges, universities and other agencies to more easily purchase GEMs without having to conduct a complex purchasing process.

I’ve posted a more in-depth article from my discussion with Mr. Kaplan in our buying guide section.

What’s Cooking on the STOV: Electric Food Truck

Posted on February 22, 2016 by Marc Cesare

Highlighting some of the many applications for Small, Task-Oriented Vehicles

Chef Greg Steel and his Philly Greens food truck built on a GEM LSV.

In Philadelphia Chef Greg Steele is using a solar-powered Polaris GEM EL XD LSV as the basis for his Philly Greens food truck. With a top speed of 25 mph and range of up to 30 miles, the electric powered food truck suits his needs for urban/suburban mobility. The electric power plant cannot provide enough power for cooking as well, so he also uses a small gas generator.The Philly Greens truck started out as flatbed and then a metal frame was added followed by what looks like a stainless steel or aluminum skin. Custom paint and graphics made the truck complete.

The metal framework that provides the foundation for the custom food service area.

The GEM customized and ready for paint and graphics.

The vehicle is an integral part to Chef Steele’s goal of creating a sustainable food truck business. He offers a seasonal menu made with non-GMO, high quality, healthy food and sources ingredients locally. The menu changes frequently and includes what is referred to as a Jawn, which his website describes as “A word used by Philly cats to describe anything and everything. It fills in for another word, handy in a brain-freeze moment, or comes out as an expression of enthusiasm.” It also seems to include leafy greens and other ingredients of the moment. Other menu items include chili, nachos and recently sweet potato, coconut soup with sunflower chili, topped off with spiral cut turnip. Learn more: Phillygreens.com

Comment: Whether it is taxi services, tourist rentals or now food trucks, electric powered LSVs appear to be slowly carving out a niche in urban environments. The slower speeds, shorter distances, and limited parking space in these areas make these vehicles an ideal choice. The drive for sustainability by many local governments and citizens makes these electric powered vehicles appealing as well.

Buyer Beware: UTV Odometer Rollbacks

Posted on February 21, 2016 by Marc Cesare

A typical odometer for a UTV.

A recent story from KATV in Arkansas illustrates a potential issue when purchasing a used utility vehicle or side-by-side, fraudulent odometer rollbacks. The story follows the trail of a UTV that changed hands three times, losing a significant amount of mileage in the process. A private owner first sold the 2014 Yamaha Viking to a dealer for $9,250, but not before taking a picture of the odometer displaying 1,722 miles. The UTV was then sold as part of a group of vehicles to Gibson Auto Sales for $12,500, which turned around and sold the UTV to another private buyer fro $17,900. However, when the final private buyer bought the vehicle the odometer only showed 44 miles. Since UTVs are not licensed for road use they do not fall under the same laws as cars and trucks in the state. Therefore, when the title changes hands the mileage does not have to be recorded. In this case, no one has taken responsibility for changing the mileage, but the buyer was able to get their money refunded. The process of rolling back the mileage on a UTV can be accomplished relatively easily by purchasing a new speedometer and switching it out. They only cost one to two hundred dollars online. Learn more: KATV.com

Comment: With UTVs frequently selling for over $10,000 and even $20,000 the issue of odometer rollbacks is likely to become more prevalent not less. The majority of used UTV sales are also between private buyers, which makes it more difficult to determine if you are dealing with a reputable seller, and recoup your money if something fraudulent is perpetrated. If you are spending thousands of dollar on a used UTV, particularly one with low mileage, it is best to purchase the vehicle from someone you know, thoroughly inspect the vehicle for signs of significant use, or have a mechanic do it for you.

Arctic Cat FY 2016 Q3 Results

Posted on February 10, 2016 by Marc Cesare

The new 2017 Prowler 500 from Arctic Cat begins shipping this month.

The new Arctic Cat HDX 700 Crew XT for model year 2017 also ships this month.

Arctic Cat recently reported their financial results for the fiscal year 2016 third quarter. For the quarter net sales declined 14.3%, in part driven by currency headwinds and the timing of vehicle shipments compared to the prior year’s third quarter.

The following are highlights of the earnings call as it relates to the UTV/side-by-side market.

Sales of ATVs and ROV side-by-sides decreased 28.5% to $60 million from $83.9 million in the year ago quarter, in part driven by shipment timing
Softening of the overall ATV/ROV(side-by-side) retail market is a contributing factor in management’s lowering of fiscal year 2016 guidance
Management continues to emphasize improving their dealer network with additional training, marketing programs and performance metrics
Arctic Cat is planning to add 75 dealers in the next 12 months after adding 10 in the last three months
This month the company begins shipment of their new 2017 HDX 700 Crew and Prowler 500
Compared to the prior year third quarter, total ATV, ROV unit retail sales in the fiscal 2016 third quarter rose mid-single-digits versus an industry that was flat to slightly down
Management has decided to create a world-class research and development center in St. Cloud, and one focus will be to improve their engine technology
Management admitted that Wildcat vehicle sales have been hurt by their comparatively lower horsepower but that the 2017 models will “correct” that problem

Learn more: Seekingalpha.com (Earnings call transcript)

Polaris Q4 2015 Results Point To Slowing UTV Market

Posted on February 10, 2016 by Marc Cesare

The base model General 1000 EPS is Indy Red with an MSRP of $15,999.

Despite a good start for the new General crossover utility vehicle, Polaris had a tough fourth quarter in 2015 as the UTV/side-by-side market showed weakness.

Polaris reported their worst year-over-year quarterly performance since 2009 with their recent Q4 2015 results. Fourth quarter sales were down 13% to $1.1 billion with net income of $110.7 million, down 18% as all businesses except Indian motorcycles and Slingshot fell short of expectations. Management expects a slowdown in the UTV/side-by-side market faces tough macroeconomic conditions in North American and abroad, as well as currency headwinds. The following are highlights of the earnings call as they relate to the UTV/side-by-side market.

Despite solid demand for the new GENERAL and improving interest in the RZR Turbo, Polaris lost side by side market share in the fourth quarter.
To keep dealer inventory low the company cut shipments of higher margin RZRs and Rangers.
Off-road vehicle dealer inventory including ATVs was down year-over-year for the first time in six years
Side-by-side dealer inventory was up slightly for the year
Management reported a “more cautious” consumer in the ORV channel
Polaris side-by-side revenue for 2015 grew “modestly”
4th quarter side-by-side retail sales in North America declined mid-single digits as the industry grew slightly
The new GENERAL vehicles began shipping in December, and initial consumer and dealer response was positive
ORV sales in oil producing states declined 10% while other areas of the market increased mid-single digits
For the full year 2015, Polaris again grew side-by-side market share.
Side-by-side retail sales increased mid-single digits in a side-by-side industry that grew slightly slower
Camp RZR in Glamis, California had an all-time record attendance, over 17,000 strong, which was up 45%
Q4 North American work and transportation revenue decreased low 20s percent as difficult comparables included the Ariens partners launch
GEM sales declined due to the transition to a completely redesigned GEM product platform during the quarter
Initial GEM orders are solid and a strong 2016 is expected
Q4 European Work and Transportation revenue declined low single-digits percent due primarily to currency weakness and some softness in Goupil and Mega
Aixam sales grew high single digits and the European quadricycle industry grew in both fourth quarter and for full year 2015, up low single-digits with Aixam retail up slightly more increasing their leading market share
Vehicles sales in Q4 and 2015 to Department of Defense and GSA related accounts were hurt by stop gap funding measures, but 2016 backlog is “healthy”
The European ORV industry grew mid-single digits in the fourth quarter and for the year.
Polaris gained share in the fourth quarter, as retail was up mid-teens percent and for the full year retail increased mid-single digits.
Multix, the three-in-one personal transportation vehicle from the Polaris-Eicher joint venture in India is retailing vehicles.
Multix customers are satisfied although currently the retail ramp remains well below management expectations, but they expect to accelerate retail in 2016 with key product improvements and further distribution expansion.
Huntsville plant will start production in Q2 and will initially produce RANGER side-by-sides
Huntsville incorporates the company’s most advanced Lean flow and state of the art manufacturing technologies and improves throughput times by approximately 80% compared to existing facilities
Management expects continued macroeconomic headwinds with ongoing currency issues overseas, a slight slowdown in global economies and a low growth economy in North America
Total company sales are expected to be in the range of down 2% to up 3%
ORV market share is expected to be maintained while gains are expected in global adjacent markets
ORV/snowmobiles revenue is anticipated to be flat to down mid-single digits and global adjacent markets up mid-single digits
Management continues to forecast strong competition in the side-by-side market
Q1 for 2016 side-by-side revenues is expected to be down because of Canadian currency issues, a weaker retail environment and tough prior comparables

Learn more: Seekingalpha.com (Earnings call transcript)

2016 PGA Show: Evolution Electric Vehicles Introduces Revolution 4-seater LSV

Posted on February 9, 2016 by Marc Cesare

The new Revolution LSV from Evolution Evolution Vehicles.

The new Revolution LSV from Evolution Electric Vehicles.

A view from the front of the Revolution LSV.

The perspective from the rear shows the Revolution’s LED taillights, brake lights and turn signals, as well as the rear bumper.

A side view of the 4-seat LSV.

Evolution Electric Vehicles launched their Revolution vehicle, a 4-seater LSV powered by a 72V AC system. The 4.0kw AC motor is paired with a 300 amp Curtis programmable controller and features regenerative braking. The Revolution also features an independent front and rear suspension, powder coated chassis, TPO injection moulded body, 12 inch aluminum wheels and four wheel hydraulic brakes. The model includes LSV features such as 3-point seat belts, laminated windshield, LED headlights, brake lights and turn signals, rear view mirrors and DOT tires. Additional features include:

Adjustable bucket seats
Air conditioning
Mp3 layer
Windshield wiper and washer
On board charger
Front and rear bumpers
Electric powered door windows
Air conditioner

Company management stated that additional Revolution variants will be launched later this year.

Company management stated that these additional Revolution variants will be launched later this year.

The vehicle is currently available at authorized dealer. Later in the year the company will be launching several variations including a 2-seater with a long pick-up bed, a 2-seater with a short pick-up bed and 2-seater with an enclosed cargo box. The company produces several other product lines of people movers, utility vehicles and golf cars. Learn more: Evolution Electric Vehicles

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