Arctic Cat Reports Quarterly Earnings For Q1 FY2016

The 2015 Wildcat Sport XT, a recent addition to the Arctic Cat side-by-side lineup.

Models like the 2015 Wildcat Sport XT help make the side-by-side business a bright spot for Arctic Cat.

Last week Arctic Cat reported earnings for the first quarter of their 2016 fiscal year with the company losing $1.1 million on sales of $134 million. The following is a summary of the highlights from the earnings call with a focus on side-by-sides.

  • Sales of Wildcat recreational vehicles helped drive recreational off-highway vehicle (ROV) sales.
  • Sales of ATVs and ROV side-by-sides decreased 17% to $52.9 million from $63.8 million in the year ago quarter. Retail sales increased significantly but shipments to dealers decreased in order to substantially reduce dealer inventory.
  • Management believes side-by-side retail sales outpaced the industry in North America.
  • ATV sales were down as the management continued to reduce ATV dealer inventory. Inventory was reduced by approximately 4,000 units.
  • Plant investment in a new paint line and automated assembly started in the quarter
  • Management has set goals of improving and expanding the Arctic Cat dealer network, emphasizing end-user focused product development, making strategic acquisitions and partnerships and creating a brand marketing powerhouse.
  • Management estimates that ATV-ROV retail sales for the quarter were up high teens.
  • For the fiscal year ending March 31, 2016, Arctic Cat estimates full-year net sales in the range of $690 million to $705 million with ATVs and side-by-side sales to rise 9% to 12%.

Learn more:  Seekingalpha.com (Earnings call transcript)

Comment:  The relatively new management team appears to be on plan in executing their turnaround of the ATV business while investing in initiatives for future growth.  The side-by-side business continues to be strong. How well they can continue to execute on dealer network relationships and expansion will be a key to continued success.

Polaris Reports Strong Quarterly Earnings For Q2 2015

Beauty shot of the new Sportsman ACE from Polaris.

The Sportsman ACE from helped drive Polaris ORV sales in the 2nd quarter.

Last week Polaris reported record 2nd quarter sales of $1.124 billion. While the company missed Wall Street expectations, they continued to experience growth across product categories including ORVs and small vehicles. The main problems for the quarter stemmed from very high demand for their motorcycles and issues with a new paint system exacerbated by the greater than expected demand. The following is a summary of  key points related to ORVs and small vehicles.

  • The new Huntsville plant is on budget and on time for a Q2 2016 start
  • ORV revenue (UTVs and ATVs) increased 2% in the quarter driven by strong RZR sales globally but offset by reduced shipments to dealers to lower inventory levels
  • Year to date ORV revenue is up 6%
  • Management reports gaining North American market share in side-by-sides and ATVs
  • Side-by-side retail sales increased high single digits which slightly outpaced the industry
  • Full-size Rangers and the ACE showed strength while there was some weakness in value and entry offerings
  • Sales promotion pressures were strong in the 2nd quarter
  • Management reports continued strong competition in the ORV market with ongoing product innovations from competing brands.
  • Global Adjacent markets decreased 3% in the 2nd quarter but are up 2% year-to-date and up high single digits in constant currency measurement
  • North American work and transportation revenue grew high teens percent driven by expansion and success in direct national account business and the Ariens partnership but there was weakness in the BRUTUS Channel caused by distribution, transition and erosion.
  • GEM revenue increased driven by double-digit retail growth
  • European work and transportation decreased high teens percent due primarily to currency weakness and some softness in the European quadricycle industry, which  is flat year-to-date.
  • Second quarter defense sales increased low single digits primarily due to timing of orders but the outlook remains strong with increasing DAGOR and RZR and international demand.
  • In international sales Latin America and Asia Pacific sales were strong while EMEA revenue suffered from currency issues and a weak Russian market.
  • Polaris launched their multi-purpose vehicle the Multix in India. The partnership with Eicher will start with 30 dealers and build to 200 by 2020.
  • Revenue guidance for the year is narrowed but essentially unchanged.

Learn more:  Seekingalpha.com (earnings call transcript)

Comment:  While the the UTV market may not be growing as fast as previous years, it is still showing signs of strong growth and is outpacing the economy in general. This is despite weaknesses in oil and agriculture driven markets. Competition continues to remain at a high level as exhibited by elevated promotion levels, numerous product introductions and continued product innovation.

Road Use Regulation Roundup – July 2015

The following is a summary of some of the road use regulations passed or being considered at the state, county and city levels since he beginning of 2015. Some trends in this latest regulation roundup:

  • Many of the ordinances focus on allowing UTVs, ATVs and mini-trucks to be used on public roads.
  • There appears to be more regulatory activity with regards to golf cars than low speed vehicles.
  • In a continuing trend, while some people are still expressing safety concerns about these vehicles being used in mixed traffic situations, they seem to be in the minority and most regulatory bodies are passing ordinances in favor of allowing these vehicles on roads.

Ontario, Canada – The province of Ontario will now allow people to drive ATVs, UTVs and multi-purpose off-highway utility vehicles on the shoulder of public roads. All riders and passengers will have to wear a helmet and seatbelt. The law reflects the growing use of the vehicles.

Indiana – The Indiana legislature passed a bill that will allow the use of mini-trucks on state roads and highways. The vehicle must be titled and registered with a ‘mini-truck’ plate.The bill also defines a mini-truck dealer as a person who sells more than 12 vehicles and requires the person to register with the state. A mini-truck is defined as having an ICE of not less than 660cc, a top speed of 60 mph or less, a locking enclosed cab and heated interior. The bill is mainly targeting farmers and hunters.

Alabama – A bill being proposed in the Alabama state legislature would allow cities to decide whether golf cars could be used on certain roads and to post signage declaring their use. It would require drivers to have a license and insurance and the golf cars to have seat belts, headlights, brake lights, turn signals and a windshield. The legislation is meant to clear up any confusion related to some cities allowing golf cars on their streets, while others do not.

Chatham County, GA – Police ticketing drivers for using golf cars on public roads use is causing Chatham County officials to consider allowing golf car use on county roads. In general the state of Georgia does not allow golf cars to be allowed on public roads unless a municipality passes a specific ordinance allowing their use. Residents of the Isle of Hope, an island, are a driving force behind the review. With smaller and lower speed roads and less traffic, golf cars have become integrated to some degree into the island’s lifestyle and residents want to be able to use the vehicles without being ticketed.

Swift County, MN – A new ordinance passed by the Swift County board of commissioners allows the use of UTVs, ATVs and golf cars on county roads. The law only applies to county roads, not state or federal highways, city streets, or township roads unless those jurisdictions have also passed laws allowing their use.

Clay County, IA – The Clay County Board of Supervisors is developing an ordinance that would allow the use of UTVs and ATVs on county highways. Public hearings and more fact finding from neighboring counties will be carried out before a final ordinance is proposed.

Nashville, TN – The city council approved regulations governing the use of low-speed vehicles for taxi services. The regulations give the Metro Transportation Licensing Commission authority to determine how many low-speed vehicle certificates are issued in Metro and to whom. The vehicles must also undergo inspections, will be limited to seven passengers and travel no more than 25 mph.

Schuyler City, NE – The city council is considering an ordinance that would require of owners of UTVs or ATVs to purchase licenses at a cost of $75 annually. The intent of the law is to make sure that those who regularly drive the vehicles on city streets get licenses.

Wilmington, NC – A bill moving through the state legislature will allow public safety officials to operate utility vehicles on Wilmington public streets with a speed limit of 35 mph or less. The legislation is mainly targeting the fire department and police department that currently use utility vehicles for events and emergency response. In some cases the UTVs must first be transported to where they are being used.

Montpelier, VT – The village council is considering an ordinance to allow LSVs to operate on the town’s public roads.

Marion, KS – The city council approved regulations that would allow ATVs, UTVs, golf cars and mini-trucks to be used on city streets. The vehicles will have to be register them with the local police department at a cost of $45 for one year or $75 for two years.

New Braunfels, TX – A public hearing was recently held for input into developing an ordinance that would allow golf cars and LSVs to be used on city streets.

 

 

John Deere Updates Gator RSX Line

The new RSX860i from John Deere replaces the RSX850i.

The new RSX860i from John Deere replaces the RSX850i.

The RSX860i is also available in Realtree Hardwoods HD Camouflage.

The RSX860i is also available in Realtree Hardwoods HD Camouflage.

John Deere announced the new model year 2016 RSX860i which replaces the RSX850i. The new RSX860i features a number of improvements including:

  • Increased top speed of 60 mph by increasing the maximum engine rpm to 7750 from 7250.
  • Optional Electric Power Assist Steering (EPAS) which adjusts steering effort based on vehicle speed and has an anti-kickback feature which reduces the amount of unwinding steering.
  • EPAS equipped vehicles are winch-ready with pre-installed wiring harness, negative battery cable and disconnect wiring harness.
  • Backlit toggle switches for dawn/dusk vehicle use.
  • Spiral bevel differential design to reduce vibration and noise.
  • 12-month or 1,000 hour factory warranty

Pricing starts at $12,299. The RSX860i will be available at dealers in mid-July in traditional John Deere green and yellow or Realtree Hardwoods HD Camouflage.  Learn more:  Johndeere.com

Comment:  It’s somewhat surprising that there weren’t more changes to the Gator product lines announced. Even with the new model, the RSX line does not include a four-person vehicle. Given Deere’s significant position in the market and the rate at which competitors are introducing new vehicles, I expected to see more significant model changes and/or new model introductions. Perhaps we will see some more from Deere in the second half of the year.

E-Z-GO Recalls Gas-Powered Golf, Shuttle and Utility Vehicles

E-Z-GO has recalled approximately 8,000 vehicles covering a number of gas-powered golf cars, shuttle and utility vehicle models under the E-Z-GO and Cushman brands. The recall involves E-Z-GO gas-powered TXT Fleet golf cars, E-Z-GO Freedom TXT, TXT2+2 and Valor golf cars, E-Z-GO Express, E-Z-GO Terrain and Cushman Shuttle vehicles with bench seats for the driver and passengers. The vehicle gas tanks can potentially leak and pose a fire hazard. Some of the models involved in the recall are pictured below:

E-Z-GO Terrain

E-Z-GO Terrain

Cushman Shuttle

Cushman Shuttle

E-Z-GO TXT

E-Z-GO TXT

The following are the details from the Consumer Safety Product Commission.

Recall Summary

Name of product:  Golf cars, shuttles and off-road utility vehicles

Hazard:  The gas tank can leak, posing a fire hazard.

Remedy:  Repair

Consumer Contact:  E-Z-GO toll-free at (844) 725-7212 between 8 a.m. and 5 p.m. ET Monday through Friday, or online at www.ezgo.com or www.cushman.com and click on Recall Information at the bottom of the page for more information.

Units:  About 8,200

Description

This recall involves E-Z-GO gas-powered TXT Fleet golf cars, E-Z-GO Freedom TXT, TXT2+2 and Valor golf cars, E-Z-GO Express, E-Z-GO Terrain and Cushman Shuttle vehicles with bench seats for the driver and passengers. The E-Z-GO Terrain and the Cushman Shuttle have a cargo bed on the back. The recalled vehicles have date codes ranging from G2015 through L0515. E-Z-GO or Cushman and the model name are printed on the side and front panels of the vehicles. Date codes are printed on a plate or label inside the cab below the driver’s seat. The first letter of the date code identifies the month of production in sequence, with G corresponding to January and L to May. There is no letter I. The first two numbers in the date code identify the two-digit day of production and the final two numbers identify the two-digit year of production.

Incidents/Injuries:  None reported

Remedy:  Consumers should immediately stop using the recalled vehicles and contact E-Z-GO or an authorized dealer for a free repair. E-Z-GO and E-Z-GO dealers are contacting known owners.

Sold at:  E-Z-GO and Cushman dealers nationwide from January 2015 through May 2015 for between $5,300 and $12,100.

Manufacturer(s):  E-Z-GO, a division of Textron Inc. and Textron Specialized Vehicles Inc., of Augusta, Ga.

Manufactured in:  United States

Learn more:  CPSC.gov

Comment:  This is a larger recall than most. While a recall of two to four thousand vehicles is typical, this one is over eight thousand. Luckily there have been no reported incidents or injuries to date. Not sure how much a repair costs, but anything over $100 per vehicle and this could cost E-Z-GO close to $1 million or more.

New Zealand Department of Conservation Switching To UTVs

UTVs like the Honda Pioneer 500 will be replacing ATVs at New Zealand's DOC.

UTVs like the Honda Pioneer 500 will be replacing ATVs at New Zealand’s DOC.

The New Zealand Department of Conservation (DOC) announced that they will be phasing out their fleet of ATVs in favor of UTVs by year end. A key reason of the change is safety, as the organization reported 11 accidents last year on ATVs. The UTVs also can two people, travel across a wider range of terrain and more easily carry or tow gear. Management also likes that the vehicles drive like cars, have rollover protection, lower center of gravity and seat belts. The 200 ATVs the DOC currently has in its fleet will be replaced by 80 UTVs. One vehicle being considered is the Honda Pioneer 500, which is not much wider, 50 inches, than the existing ATVs. Learn more:  Stuff.co.nz

Comment:  The transition from ATVs to UTVs has been one of the drivers the past few years in the growing UTV market, although it has often been discussed in terms of older ATV riders looking for a more comfortable riding experience. The safety aspect is a different perspective but one that can be very important for commercial and institutional buyers. Given the numbers discussed in this situation, 200 down to 80, the cost savings could be significant as well depending on what types of ATVs and UTVs are involved.

SVR Adds 2016 Honda UTVs To Database

The new 2016 Honda Pioneer 1000

The new 2016 Honda Pioneer 1000

The new Honda Pioneer 1000-5 can fit up to five people.

The new Honda Pioneer 1000-5 can fit up to five people.

Smallvehicleresource.com has added the recently announced 2016 Honda utility vehicle models to our vehicle database. The Honda offerings include their Pioneer product line including the newest additions, the Pioneer 1000, 1000 EPS, 1000-5 and 1000-5 Deluxe. The 2016 700, 700-4 and 500 remain largely unchanged from their 2015 incarnations.

The newest additions build out their product line with some models with a larger engine, 999cc compared to the 675cc used in the Pioneer 700. The Pioneer 1000-5 can fit up to five people but with Honda’s QuickFlip seating can be configured for three or four as well. No specific pricing has been released for the models. Depending on the model, higher trim levels  include some or all of the following extras:  electronic power steering, paddle sifters, color-matched doors and bedside panels, tilt steering, LED Headlights and more paint choices including Phantom Camo.

The newest models do not strike new ground in terms of end-use applications.  All of the Pioneer models straddle the work and recreation segments, although you might argue the Pioneer 700 and 1000 models with a 1,000 lb. cargo bed and one ton towing capacity are leaning more towards work, while the narrower and smaller 500 is more for recreation.

If you are a Honda dealer you can add a basic listing for your dealership to our dealer directory for free or if you are already in our dealer directory you can add Honda to your listing.

Mahindra Launches Jeeto Mini-Truck

The new Jeeto mini-truck from Mahindra & Mahindra.

The new Jeeto mini-truck from Mahindra & Mahindra.

Mahindra & Mahindra has launched their new commercial mini-truck, the Jeeto, targeting the sub one tonne load mini-truck segment. The Jeeto comes in eight different variations and will be available in S (S6-11, S6-16), L (L6-11, L6-16, L7-11, L7-16) & X (X7-11, X7-16) series, catering to mini-truck, micro-truck and 3 wheelers customers. The vehicles start at 2.32 Lakh or 3,620 USD. The variations include options for powertrains, payload capacity and deck lengths.

  • Powertrains – 8.2 kW (11 HP) and 11.9 Kw (16 HP)
  • Payloads – 600 Kgs and 700 Kgs
  • Deck lengths – 1630mm (5.5ft), 1780mm (6ft) and 1930 mm (6.5ft)

Jeeto also comes with a class-leading warranty of 2 years/40,000km (whichever is earlier). It will be available in 5 colors of Diamond White, Sunrise Red, Mango Yellow, Ultramarine Blue and Premium Beige. The vehicles are targeting the last mile distributor segment. Mahindra & Mahindra spent approximately $8 million US on product development and another $40 million US on the production facility. Learn more:  Indiatimes.com and Livemint.com

 

Eicher Polaris JV Launches Multix: A Personal Utility Vehicle for Indian Market

The Multix utility vehicle, the first offering from the Eicher-Polaris joint venture.

The Multix utility vehicle, the first offering from the Eicher-Polaris joint venture.

Eicher Polaris Pvt. Ltd., a 50:50 joint venture between Eicher Motors Ltd and Polaris Industries Inc., launched the Multix India’s  first personal utility vehicle. The Multix, available in two versions and four colors, is targeting the “independent businessman”. The Multix is being positioned as a versatile vehicle that can be used for both business and family purposes. Management estimates the market size to be 60 million households. From initial idea to launch took Eicher and Polaris about five years and $60 million. Extensive consumer testing was performed to identify the market and test the concept. The Multix is being viewed as launching a new vehicle category. Initial production is expected to be 5,000 vehicles per month and the manufacturing facilities can expand to handle twice that volume.

Key features of the Multix include:

  • 500cc Diesel engine
  • Cabin space that can comfortably seat a family of five along with luggage
  • Multix can be adapted to create large storage space of 1918 liters.
  • X-PORT a unique power-take-off point, which can generate power of up to 3 KW that can be used for lighting homes and powering professional equipment
  • Pro Ride Independent suspension system
  • Ground clearance of 225mm,
  • Mileage of 28.45 kmpl.
  • Tubular frame structure and Roll-Over Protection System (ROPS) 
  • Flexituff body

The two Multix versions are priced at 3,620 USD or 2.32 Lakh and 4,245 USD or 2.72 Lakh. The vehicle will be launched in 30 cities with test drives starting in July and deliveries in August. Learn more: Equitybulls.com

Comment:  In contrast to the US market where a crossover utility vehicle means a vehicle for work and play, in the Indian market it means work and family use. This utility vehicle/mini-truck market is very dynamic. Not only do you have new entrants like Eicher-Polaris with the Multix, but there are also a number of startups receiving venture capital that are targeting the independent delivery/shipping market that utilize these vehicles. These companies are using software and other technology to make the process of locating and quickly accessing a shipper much more efficient. This could prove to be another catalyst for the vehicle market.

SVR Adds 2016 Kawasaki UTVs To Vehicle Database

The new 2016 Teryx with redesigned front.

The new 2016 Teryx with redesigned front.

The Mule Pro FX lineup is a variant of the existing FXT lineup.

The Mule Pro FX lineup is a variant of the existing FXT lineup.

Smallvehicleresource.com has added the recently announced 2016 Kawasaki utility vehicle models to our vehicle database. The Kawasaki offerings include their Mule Pro, Mule Pro Diesel, Mule and Teryx product lines. The Mule Pro product lines are more full-size, heavy-duty type vehicles mainly targeting work while the Mule vehicles are small to medium sized work and recreation vehicles. The Teryx product line is more for purely recreational use.

The 2016 lineup filled out their full size work utility vehicle offerings by adding single seat Mule FX and DX variations to their Mule FXT and DXT models. The FXT and DXT models can fit three people or be reconfigured to fit six by transforming the cargo area into an additional bench seat with a smaller cargo bed. In the recreational Teryx and Teryx4 product lines the 2016 models offer a mix of changes in performance, styling and ergonomics. Performance changes include optimized shocks and larger tires for certain models. The front of the vehicle has been restyled and certain models add LED headlights.

If you are a Kawasaki dealer you can add a basic listing for your dealership to our dealer directory for free or if you are already in our dealer directory you can add Kawasaki to your listing.