Data Shows Decline In Indian Mini-Truck Market

The Tata Ace mini-truck

The Tata Ace mini-truck is the leader in the Indian mini-truck market.

Data from the Society of Indian Automobile Manufacturers shows that the mini-truck market is declining as larger pickup trucks are displacing them. Last year’s figures have pickups outselling mini-trucks 140,000 vehicles to 131,000. Estimates for this year put the pickup market at nearly 200,000. Increased urbanization and improving road conditions are driving the pickup trend according to industry executives. The pickup trucks can carry more cargo and have more horsepower than mini-trucks whose sales declined last year by 21% from nearly 167,000 units the year before.  Learn more:  Business-standard.com

Comment:  The decline in the mini-truck market would appear to be a problem for the Polaris-Eicher joint venture which just launched their Multix vehicle. However, the Multix is being positioned as a multi-purpose vehicle that users can easily transition from using for work to using for family purposes to even using for power generation, since the vehicle also has a generator that can be used for operating tools or provide electricity to the home. A primary target for the Multix is the rural and semi-urban independent business person. In contrast, urbanization is cited as one reason for the decline in the mini-truck market. It would be interesting to see the breakdown of where mini-truck sales have been declining, in terms of urban versus rural.

Polaris India Expects Strong Revenue Growth In India

Executives at Polaris’ subsidiary in India, Polaris India, expect strong revenue growth over the next three to five years. By 2020 they are targeting a 100% to 200% sales increase at the subsidiary which sells ATVs, UTVs and motorcycles. The long term strategy is to build up enough volume to justify investment in local assembly plants. This would be the plan for motorcycles and off-road vehicles. Currently Polaris India imports all the Polaris vehicles they sell including the complete line of Indian motorcycles.

The management reports good sales of the Ranger EV in certain parts of the country and is exploring adding the GEM line of vehicles to their offering. Off-road vehicle sales are helped by the 39 Polaris Experience Zones, which are off-road vehicle tracks. They have also made sales to the Indian army and police. Polaris India distributes products through 16 dealerships in India and two more in Nepal and Kazakhstan. Export sales are made to Nepal, Bangladesh, Bhutan, Sri Lanka, Kazakhstan and Pakistan. Unrelated to Polaris Inida is the Polaris joint venture with Eicher. Learn more:  Timesofindia.com

Comment:  Of course, having sales targets and meeting them are two different things, but Polaris has consistently hit most of their long term strategic goals across many products. A lot will depend on how well the Indian economy grows but even slower growth in such a large market offers great potential.

American SportWorks Recalls 3,500 UTVs

One of the UTVs manufactured by Amercican SportWorks that is being recalled.

One of the UTVs manufactured by American SportWorks that is being recalled.

American SportWorks announced the recall of approximately 3,500 utility vehicles because the throttle can fail to return to idle and cause the rider to lose control of the vehicle, posing a risk of injury. The recall includes certain Bulldog 300, Chuckwagon 300, Landmaster 300, Landmaster 400 and Trailwagon 400 UTVs sold between September 2014 and June 2015. Owners should stop using the vehicle and contact American SportWorks at 800-293-0795 to arrange for repairs.

The following information is from Consumer Products Safety Commission.

Recall Summary

Name of product:  Off Road Utility Vehicles

Hazard:  The throttle can fail to return to idle causing the rider to lose control, posing a risk of injury.

Consumer Contact:  ASW toll free at 800-293-0795 from 8 a.m. to 5 p.m. ET Monday through Friday or online at www.amsportworks.com at the top of the page under the SAFETY tab under Recalls click on “TSB167 & TSB168” for more information.

Recall Details

Units:  About 3,500

Description:  This recall includes six models of American SportWorks Four Wheel Off-Road Utility Vehicles. The name of each model is located above each front fender and along the sides of the dump bed. Affected vehicles include:

BullDog 300, ChuckWagon 300 and LandMaster 300 all powered by Kohler 277cc engines with the last 6 Characters of the product identification number between A11746 and A13294, and LandMaster 400, TrailWagon 400 and ChuckWagon 400 all powered by Honda 390cc engines with the last 6 Characters of the product identification number between A24835 and A26806. The product identification numbers can be found on a sticker on the firewall above the accelerator and brake pedal.

Model                          Color
LandMaster 300          Red, Green, Black, White, Camo
LandMaster 400          Red, Green, Black, White, Camo
BullDog 300                Red
Trail Wagon 400         Red, Camo
Chuck Wagon 300     Red, Green, Camo
Chuck Wagon 300     Red, Green, Camo

Incidents/Injuries:  None reported

Sold at:  Atwood Distributing, Rural King, The Home Depot, Tractor Supply Company and other dealers from September 2014 through June 2015 for between $4,300 and $5,300.

Manufacturer(s):  American SportWorks, of Roseland, La.

Manufactured in:  United States

Learn more:  CPSC.com

Comment:  While the size of this recall is typical for the industry, for a smaller manufacturer of UTVs this a significant number. The cost to repair each vehicle will determine how big an impact the recall has on the company. A number of the models were manufactured by American SportWorks and sold under different product line names through retail stores rather than American SportWorks dealers; the Chuck Wagon for Rural King stores, the Trail Wagon for Tractor Supply Co. and the Bulldog for Home Depot.

LSV Road Use Laws Can Come In Bunches

A story about LSV ordinances in Southern Illinois communities reveals a common pattern of how these laws are passed. It often starts with a municipality that sets the precedent and can be the test case for other municipalities in the area. Once other communities see that the ordinance can have a positive impact for residents, it can provide a catalyst and an easier sell in other nearby cities. Initially, there was a fair amount of pushback against these ordinances because of safety concerns, particularly the mixing of higher speed traffic with low speed vehicles. In part, this stemmed from a lack of safety data related to the use of LSVs in these environments. But once the initial adopters started instituting these ordinances, other communities could make a better assessment of both the pros and cons of allowing LSVs on local streets.

This may point to how to expand the LSV market for personal transportation. If either manufacturers and/or local dealers wanted to build an LSV market, they may want to take the approach of identifying the municipality in a particular area most agreeable to passing an ordinance and use it as a test case. They could then use it as an example to lobby nearby municipalities to do the same. In many cases, the impetus also starts with local residents who want an LSV option. Bringing them into the process would help as well. While it could take some time, once momentum built in a certain area, that micro market could expand quickly.  Learn more:  Thesouthern.com

Google Auto LLC: Google’s Self-Driving Auto Company

Google Prototype self-driving low-speed vehicle.

Google Prototype self-driving low-speed vehicle.

The name for Google’s self-driving auto company has been ferreted out. Registration information from the California Department of Motor Vehicles and NHTSA include the company name. Google is currently in the process of putting up to 150 prototype self-driving autos in the field for testing. This first group of vehicles will be LSVs. Learn more:  Dispatchtimes.com

Arctic Cat Recalls Prowler 500 HDX Side-by-Sides

The 2014 Arctic Cat Prowler 500 HDX is being recalled due to a fuel leak issue.

The 2014 and 2015 Arctic Cat Prowler 500 HDX is being recalled due to a potential fuel leak issue.

Arctic Cat is recalling approximately 2,700 model year 2014 and 2015 Prowler 500 HDX side-by-sides due to an issue with the fuel fitting at the throttle body than can cause a fuel leak and create a fire hazard. Owners should stop using the vehicles and contact a local dealer for a free repair. For more information Arctic Cat can be contacted at (800) 279-6851 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.arcticcat.com and click on Customer Care, then Product Recall and List of Safety Bulletins for more information. The following information is from the Consumer Product Safety Commission.

Recall Details:  About 2,700 units

Description:  This recall involves model year 2014 Arctic Cat Prowler 500 HDX and model year 2015 Prowler 500 HDX models. The recalled vehicles include vehicle identification numbers (VIN) from 303194 through 305166. The VIN number is located on the rear frame tube under the rear of the box. The vehicles are green, red, vibrant red metallic, or emerald green metallic. “Arctic Cat” is printed on each side of the hood. Also 500 is printed on each side on the front fenders, HDX on each side of the rear cargo box, and “Arctic Cat” on the cargo box tail gate.

Hazard:  Fuel can leak from the fuel fitting at the throttle body, posing a fire hazard.

Incidents/Injuries:  None reported.

Remedy:  Consumers should immediately stop using the recalled Prowlers and contact an Arctic Cat dealer to schedule a free repair. Arctic Cat is contacting its customers directly.

Sold at:  Arctic Cat dealers nationwide from August 2013 to July 2015 for between about $11,000 and $12,400.

Manufactured in:  United States

Learn more:  CPSC.gov

Comment:  While this isn’t a large sized recall in the context of the side-by-side industry, it isn’t helpful for Arctic Cat as the management is in the middle of turning around their ATV/ROV business. Most of their issues have happened on the ATV side of the business, and the Prowler 500 HDX has been a solid performer. What is also notable is that many of the recalls in the side-by-side industry involve potential fuel leaks and fire hazards.

Polaris Announces New Side-By-Side Models For 2016

The new 2016 Polaris RZR XP Turbo EPS

The new 2016 Polaris RZR XP Turbo EPS

Polaris has announced their model year 2016 line-up including a new turbocharged RZR, the RZR XP Turbo EPS. The RZR XP Turbo EPS is powered by a turbocharged Prostar engine that produces 144 hp. Additional key features of the vehicle include:

  • Fox Podium Internal Bypass Shocks
  • Lighter-weight progressive rate upper spring and stiffer main spring
  • New front swaybar and re-tuned rear swaybar
  • Bolstered seats
  • Tilt steering
  • Factory installed quarter doors
  • MSRP $24,999
The new 2016 Polaris RZR S 1000 EPS

The new 2016 Polaris RZR S 1000 EPS

An additional new model is the 60 inch wide RZR S 1000 EPS featuring a 100 hp Prostar engine, Dual A-Arm rear suspension, Fox 2.0 Podium X shocks, True All-Wheel Drive, bolstered seats and factory installed quarter doors. The MSRP is $17,999. The 2016 RZR line also includes some comfort and ergonomic improvements including:

  • New seat angle that brings the driver’s elbows closer to the body providing less arm fatigue and a more natural driving position for the RZR 1000 EPS, RZR 900 EPS, RZR S 900 EPS, RZR XC 900 EPS, RZR 4 900 EPS, RZR XP 1000 EPS, RZR XP Turbo EPS, RZR XP 4 1000 EPS and non-EPS vehicles.
  • Adjustable seatbelt sliders for the RZR XP 1000
The value priced 2016 Polaris Ranger 570 Full-Size

The value priced 2016 Polaris Ranger 570 Full-Size

The new 2016 Polaris Ranger XP 900 EPS High Lifter Stealth Black for mud riding.

The new 2016 Polaris Ranger XP 900 EPS High Lifter Stealth Black for mud riding.

In the Ranger lineup Polaris is adding the Ranger 570 Full-Size with a 60 inch three seat chassis, tubular ROPS, 44 hp Prostar 570 engine, 1,500 lb. towing capacity, 800 lb. cargo bed capacity and value targeted MSRP of $9,999. They are also adding a three-seat mud riding model, the Ranger XP 900 EPS High Lifter Edition Stealth Black. This model features reduced gearing for more mud-specific torque with an added a heavy-duty reverse chain, high engine air and clutch intakes and outlet, arched lower A-Arms, 28 in/71.12 cm High Lifter Outlaw II tires and an improved drainage skid plate. The vehicle also features a Pro-Lock™ On-Demand All-Wheel Drive for quicker four-wheel drive engagement in the mud, electronic power stering, 4,500 lb. winch with integrated in-dash switches, specially designed front bumper to allow winch access, rear bumper, half doors and special graphics kit.

Another Ranger addition for 2016 is the pure electric Ranger EV Li-Ion Polaris Pursuit Camo. This model includes:

  • 48-volt Ac-induction motor
  • Battery management controller to more accurately represent battery life
  • Vehicle Control Module with new digital gauge and better accessory integration
  • On-vehicle diagnostics
  • MSRP $22,999

A Ranger 570 EPS Hunter Edition Polaris Pursuit Camo is new for model year 2016. This model includes Active Descent Control for more control in mountainous terrain, Pro-Lock On-Demand All-Wheel Drive, 3,500 lb. winch, and dual Lock & Ride Scabbards.

Other Ranger models will get a power boost in 2016 with the addition of high output Prostar engines for the Ranger Crew 900-5 and Ranger Crew 900-6 (68 hp) as well as the Ranger XP 570 and Ranger Crew 570-6 (46 hp). Other Enhancements to the Ranger line include an updated hood design with an aggressive new look for the Ranger XP 900 and Ranger XP 570 and Crew vehicles. For maximum power delivery to the ground, the Ranger XP 900 EPS and Crew 900 painted models are now equipped with Pro-Lock On-Demand All-Wheel Drive.

The 2016 Polaris Ace 900 SP adds power and high performance features.

The 2016 Polaris Ace 900 SP adds power and high performance features.

There is also a new Polaris ACE model for 2016, the ACE 900 SP, which features a 60 hp Prostar 900 engine with electronic fuel injection and electronic throttle control. Notable features include:

  • Front stabilizer bar
  • New dual rate springs in the independent rear suspension
  • 25 inch tires
  • Polaris’ High Performance Close Ratio On-Demand All-Wheel Drive (AWD)
  • MSRP $11,499

Learn more:  UTVguide.net

Comment:  Polaris continues to add to their armada of vehicles. The turbocharged model is a response to Can Ams turbocharged offering. Their other new models demonstrate how they pursue market niches with very specific models such as those for hunting or mud riding. They also make a number of tweaks to the rest of their lineup, many of which focus on comfort or ergonomics. Combined, the niche marketing and tweaking, I believe demonstrate the level of customer research that they put into their product development. Many of these changes are quite specific which I don’t believe they would be making without customer research to justify them.

The new value priced Ranger is most likely a response to the increased competition in this segment of the market where promotions from established brands and offerings from companies like Kymco and CFMoto may be impacting sales. The new electric Ranger injects some of the Brammo acquired expertise in lithium ion technology into their side-by-side product line. It will be interesting to see how the vehicle sells with an MSRP that’s over $10,000 more than their lead-acid battery based EV Rangers. The pricing makes it a niche vehicle and its wise that it is essentially a high-end, electric hunting vehicle where the extra battery range can make a difference and possibly open up new markets, where electric hunting vehicles previously may have struggled to gain traction because of range issues. The new ACE model indicates a demand for and expansion into higher performance riding for the one-seater market.

Polaris Recalls Youth Side-By-Side Due To Fire Hazard

The Polaris Youth RZR 170 EFI in blue that is part of the recall.

The Polaris Youth RZR 170 EFI in blue that is part of the recall.

The Polaris Youth RZR 170 EFI in red that is part of the recall.

The Polaris Youth RZR 170 EFI in red that is part of the recall.

Polaris has issued a recall of approximately 4,300 2015 model year Youth RZR 170 EFI side-by-sides because an issue with the fuel pump poses a fire hazard. Consumers should stop using the vehicles and contact their local dealer for a free repair. Polaris can be contacted toll-free at (888) 704-5290, from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.polaris.com and click on Product Safety Recalls for more information.

The following recall information is from the Consumer Products Safety Commission.

Recall Details

Units:  About 4,300

Description:  This recall involves Model Year 2015 Polaris Youth RZR® 170 EFI recreational off-highway vehicles with model number R15YAV17AA/AF and VINs between RF3YAV170FT000076 and RF3YAV17XFT005141. To see the complete list, visit the firm’s website. The VIN is on the left-hand front frame tube. They were sold in both blue and red. The blue models have a “170 EFI” decal on the right and left side of the hood and an “RZR” decal on the right and left front fenders. The red models have a “170 EFI” decal on the right and left front fenders and a “RZR” decal on the right and left rear fenders.

Incidents/Injuries:  None reported

Remedy:  Consumers should immediately stop using the recalled Polaris RZR vehicles and contact their local Polaris dealer to schedule a free repair. Polaris is contacting its customers directly and sending a recall letter to each registered owner of an affected product.

Sold at:  Polaris dealers nationwide from October 2014 through June 2015 for about $4,600.

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

Manufactured in:  Taiwan

Learn more:  CPSC.gov

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.