STOV Market Faces State & Local Regulatory Hurdles

Posted on by
Reply

Clendenin’s mini-truck no longer allowed on town streets and destined for auction.                   Photo credit: Kenny Kemp

A couple of recent stories illustrate the hurdles that STOVs face at the local and state level despite the vehicles being perfect for a given application. In one instance the small town of Clendenin, WV is auctioning off their mini-truck because town officials have determined it is not legal to drive the vehicle on city streets. For several years the town has been using the vehicle to haul debris and carry salt on the narrower and hillier streets where access by full-sized trucks is difficult.  While officials and workers thought the mini-truck was “perfect” for the tasks at hand the state of West Virginia does not allow mini-trucks to be registered. The town council passed an ordinance allowing the vehicle to be used within the city but their local ordinance cannot trump state law. The town is now using a F-150 Ford pick-up which costs $75 to fill-up instead of $20 for the mini-truck which is headed for the auction block.

In the second story a disabled man who had been using a Gator to travel around the roads of the small village of Union, IL was abruptly told he could no longer use the vehicle on city streets after years of doing so. He was told it was a matter of public safety.  While Illinois state law allows non-highway vehicles on roads with speed limits of 30 mph or less, local municipalities must pass an ordinance to do so. Proponents are using a social media campaign to encourage local officials to pass an ordinance.

Learn more:  WVGazette.com   NBCChicago.com

Commentary:  While the trend has been towards more and more municipalities allowing a wider range of STOVs on local streets, the process is very much piecemeal. As illustrated in the second story there are also instances where use is allowed or tolerated by not officially codified by a local ordinance. The issue is local control of streets, where in theory and more than likely in practice, local officials know what is best for their town. On the other hand, statewide regulations allowing STOVs on local low-speed streets would be a big boost to the STOV market and a much more efficient regulatory approach. The use of these vehicles are not likely a priority for many municipalities, even if officials perceived no safety hazard, so the widespread passage of local ordinances will take a long time to enact.

Insights from the Texas UTV Market

Posted on by
Reply

Dealers expect new introductions like the Yamaha Viking will help continue the strong growth in the UTV market.

PowerSportsBusiness recently featured an article on UTV registrations around the US by state and a related article with data on UTV accessories. Texas had the largest number of registrations by far with nearly 4,500 registered in the first quarter of 2013. California was second with about 1,700. Now these numbers can be misleading because states can have a varying rules on whether or not a UTV has to be registered. In some cases it may depend on whether it is used on private or public land. So it may be hard to compare data state to state without knowing their individual regulations regarding UTV registration. What I found more interesting was the handful of interviews with Texas dealers that is included in the article. Here is my quick analysis of those interviews:

  • The solid growth in the UTV market is expected to continue
  • Growth is being driven by a number of factors including:  new product introductions, local economic factors like growing oil business and good farming conditions, and continued product switching  from ATVs to UTVs
  • While switching from ATVs is occurring a significant amount of UTV purchasers are newcomers to the market
  • Polaris is a dominant brand but others are selling well and there are indications that the Kawasaki Teryx is on the upswing
  • Whether sales are for recreation or work/utility applications depends on the location of the dealer and the dominant customer segments in their area
  • Farmers are still driving ATV sales but are also switching to UTVs
  • Accessories can frequently add $1,500 to $3,000 or more to a UTV sale
  • Roofs, windshields and winches are key accessories being purchased

 

Polaris Adds Model To Brutus Commercial Line

Posted on by
Reply

Newly launched Brutus with cab model from Polaris for the commercial UTV market

Polaris has added a Brutus with cab model to their Brutus commercial UTV product line. The new model takes the base Brutus vehicle and adds some features that are available on the existing Brutus HD and Brutus HDPTO versions. The new model includes a fully enclosed, factory-installed cab with heat, defrost and air conditioning. In addition, there is an electric bed lift. The Brutus with cab, which is also referred to as a Limited Edition Model on the Polaris website, has an MSRP of $20,999 compared to the base Brutus model with an MSRP of $15,199. Learn more:  UTVGuide.net

Comment:  Polaris is known for frequently adding to their product lines to reach a variety of market sub-segments and price points with specific vehicles or vehicle configurations. Their speed of product introduction and ability to deliver value across a range of price points has to be considered one of their competitive advantages. This Brutus product variation comes only five months after the initial product lineup was announced in March.

Bad Boy Mowers Expands: Targets UTV Market

Posted on by
2

Intimidator multi-terrain vehicle from Bad Boy Mowers

Bad Boy Mowers of Arkansas has announced plans to hire more than 200 people in the next three to five years as the company expands it’s offerings in the UTV market. The manufacturer of lawn mowers also started producing utility vehicles several years back but has moved more aggressively into the UTV market with the launch of the affiliated company and brand, Intimidator in 2011. The company spent $7.5 million to expand their plant for the new product line.

The Intimidator series features a 1,600-pound payload and a 2,100-pound towing capacity. The company will be producing 10 new multi-terrain vehicles, as they like to call them, expanding the total number of models they offer to 16. The Intimidator product line includes diesel, gas and electric versions. Previously, under the Bad Boy Mower brand the company has also offered a range of UTVs including some that are LSV compliant UTVs. Learn more:  PBCommercial.com

Comment:  And the competition in the UTV market continues, this time in the work UTV segment. Creating a new brand is probably the best way to go as UTVs do not initially come to mind with the name Bad Boy Mowers. There could also be some confusions and possibly even legal issues with the Bad Boy Buggies brand owned by E-Z-GO. However, the company should still be able to leverage the Bad Boy Mower dealer network, which at first glance seems concentrated in the Midwest and East, to grow the Intimidator line. Distribution is key in this market as so many manufacturers entered from adjacent markets like powersports, farming, power equipment, golf, etc. They often can reach parts of the market or certain segments with their traditional distribution networks but then have trouble expanding further.

New Polaris Ranger Midsize Models For 2014

Posted on by
Reply

New 2014 Polaris Ranger 570 EFI

Along with their new RZR XP 1000, Polaris is also introducing new models for their lineup of Ranger utility vehicles for work applications. The new models include the Ranger Crew 900, Ranger 570 EFI and Ranger Crew 570 EFI.

The Ranger Crew 900 features a 60-horsepower ProStar 900 engine, the ability to tow one ton, a new high capacity battery and stator, and an integrated Lock & Ride PRO-FIT cab accessories. It also has a more rigid chassis, and extended wheel base, 1 in. more rear suspension travel and 11 in of ground clearance. The cargo box is wide enough to fit a pallet and has a 1,000 lb capacity. The engine is located under the cargo box providing a quieter ride.

Similar to the Ranger XP 900 cab frame, the new Ranger Crew 900 frame also features profile tubing, providing a 360-degree sealing surface for every cab component. Windshields, roofs, doors and rear panels follow the shape of the vehicle, locking directly into the cab frame’s precision contours. The cabs are 60 percent quieter at idle and 40 percent quieter at 20 mph. The vehicle fits five people and has a new center console, more storage and cup holders and tilt steering wheel. The Ranger Crew 900 is available in Sage Green, Solar Red and Polaris Pursuit Camo. Limited Edition models include Sunset Red and Titanium Matte Metallic. Electronic Power Steering (EPS) is standard on the Polaris Pursuit Camo and Limited Edition models.

The  Ranger 570 EFI and Ranger Crew 570 EFI feature a liquid-cooled, single-cylinder 570 engine delivering smooth acceleration and 25 percent more power than previous models. The models also features a new transmission, a quieter ride with the engine located behind the seat, a larger stator for operating more accessories and electronic power steering on Limited Edition models. The standard editions for both models are available  in Sage Green, Solar Red and Polaris Pursuit Camo.

Learn more:  ATVIllustrated.com

 

Polaris Announces New 2014 RZR XP 1000

Posted on by
Reply

New 2014 RZR XP 1000 from Polaris

The competition in the side-by-side sport recreation segment continues to heat up with the latest model introduction from Polaris. The new 2014 RZR XP 1000 features a 999cc engine with a reported 107 hp.  This would give the RZR the largest and most powerful engine in the segment. Other key improvements to the top of the line RZR include:

  • A tubular steel chassis
  • Retuned, high performance PVT system
  • Redesigned 3-Link trailing arm rear suspension giving the vehicle 13.5 inches of ground clearance
  • 29 in. Maxxis Bighorn tires on all new 14-inch cast rims
  • Adjustable Walker Evans Position Sensitive Anti-Bottoming Needle Shocks for all for wheels
  • 18 inches of rear travel and 16 inches of front travel
  • Electronic power steering
  • Dual-piston calipers and larger 248mm ventilated discs on all four corners

The interior of the new RZR XP 1000 from Polaris

There were also improvements to the interior over previous RZR models.

  • New seats with more hip cushioning and a new thin-film technology under the cover for a drier ride in wet conditions
  • Tool-less seat sliders
  • New, flow-through tongue seat belt design that is easier to adjust and retract
  • Larger glovebox
  • Sealed smartphone storage
  • LED floor lighting and backlit instrument panel
Other improvements include:
  • 9.5 gallon fuel tank
  • Larger cargo box with more tie-downs
  • Better integration with Polaris accessories for easy installation
The RZR XP 1000 will be offered in White Lightning and Titanium Matte Metallic, and will be available at Polaris dealerships in August.  The MSRP starts at $19,999.

Learn more:  Polaris.com

Arctic Cat Reports Strong Quarterly Results

Posted on by
Reply

Arctic Cat Wildcat Side-by-Side helps drive strong quarterly results

Arctic Cat, manufacturer of snowmobiles, ATVs and the Wildcat side-by-side, announced strong results for the first quarter ending June 30, 2013 of their 2013 fiscal year. The following are some of the highlights of the earnings call with analysts with a focus on UTV/side-by-side issues.

  • Net sales for the first quarter increased nearly 9% to 120.8 million versus 111.3 million for the same quarter last year. Sales growth was driven by increased sales across all product lines.
  • ATV and Side by Side sales increased 5% to 76.3 million versus 73 million
  • Key drivers for the sales increase were the Wildcat X high-horsepower sports Side by Side and the Wildcat four seat model, both of which started shipping during the fourth quarter of last fiscal year.
  • While retail ATV sales underperformed the overall industry, North American Side by Side retail sales experienced strong growth and gained market share with Wildcat retail sales increasing 47%.
  • The new model year 14 lineup which will include some new models that will allow Arctic Cat to enter some new market segments will be announced in a few days.
  • Arctic Cat plans to continue to launch new models each quarter of this fiscal year including the Wildcat 50 trail version that was announced last February. (The new models could be ATVs, side-by-sides or snowmobiles)
  • Management expects new products to help grow the ATV and Side by Side business between 25 and 29% for the fiscal year.
  • Expansion of our Wildcat Side by Side lineup will contribute to increased PG&A sales this fiscal year.
  • During the quarter, R&D expenses increased 18% as product development is a focus.
  • Management sees potential to grow their share of the recreational off road market and some of the new products being launched will take the company into new market segments.

Learn more:  Seekingalpha.com (earnings call transcript)

Comment:  As evidenced by Arctic Cat’s recent and planned model introductions, the competition in the UTV/side-by-side market continues to heat up. It will be interesting to see what new market segments they will be targeting. Similar to Polaris, they are looking to diversify their product line and segment coverage. Going forward the competition should be good for consumers, lowering costs and/or improving the value for their purchasing dollar with more features and better performance. For manufacturers, it may hurt profit margins and/or put more pressure on them to keep innovating and launching new models.

Polaris Reports Another Strong Quarter for Q2 2013

Posted on by
Reply

Polaris Ranger XP 900 helped drive overall sales in the second quarter of 2013

Polaris Industries just announced their Q2 2013 financial results and reported another quarter of strong earnings and market share gains. The following are the highlights of the earnings call with analysts with a focus on the STOV segments.

  • Sales for the second quarter increased 12%, to a record $844.8 million driven by share gains and double-digit retail growth in North America
  • Polaris captured market share in ATVs and side-by-sides which also drove significant gains in PG&A business
  • Second quarter net income rose 15% to $80 million yielding record earnings per share of $1.13, a15% improvement over the prior year period.
  • PG&A sales increased 33% for the quarter
  • ORV segment which includes ATVs and UTVs  performed well fueled by the RANGER 900 XP and supported by RZR products.
  • Revenue for ORV was up 7%, which is less than retail as inventory was reduced in preparation for new model launches.
  • Gained North American market share in both ATVs and side-by-sides.
  • North American side-by-side retail sales strengthened in the second quarter, up double-digits percent driven by growth in both RANGER and RZR categories. In fact, both brands had their largest unit retail quarters in their history.
  • Management estimates the North American side-by-side industry also improved, growing just under 10% in the second quarter and is now up upper-single digits year-to-date.
  • Initial Brutus shipments began into over 400 Polaris commercial dealers.
  • In the military segment Polaris remains the clear #1 in ultralight tactical vehicle space with the new MRZR is selling well globally
  • Due primarily to the Aixam purchase and contributions from GEM and Goupil, small vehicle revenues increased $22 million and 190% for the second quarter. Year-to-date, sales are up 109%.
  • GEM business is improving with second quarter retail sales were up in excess of 50%. Management reports better operations for GEM and improved traction in the B2B market place, particularly in the People Mover sub-segment.
  • Goupil also had a strong second quarter with orders up over 30% and notable cost and productivity improvements in operations, driving gross margin improvements.
  • ORV PG&A sales increased 25% and small vehicles 165%.  “The attachment rate that we’ve seen on the Ranger 900 XP with the new integrated cab system is phenomenal.”
  • In Europe – Polaris’ Q2 ORV retail grew and year-to-date, is about flat in an ORV industry that remains down double digits. Polaris maintains their leading position.

Looking ahead:

  • Future Sales of Off-Road Vehicles are expected to increase in the 8% to 10% range with retail sales of side-by-side vehicles and ATVs outpacing the overall market in North America and internationally
  • ORV market share is expected to continue to increase in 2013
  • For small vehicles, which includes the GEM and Goupil businesses, along with the recently acquired Aixam Mega, sales are expected to increase well over 100% for the full year 2013.
  • Both GEM and Goupil are expected to increase sales for the full year over last year total company sales increase in the range of 13% to 15% for the full year 2013.
  • Management is not feeling pricing pressure in the UTV market as they are confident that the Polaris brand/product can garner a price premium
  • Process improvement in small vehicle operations are improving quality and delivery as well as reducing costs. Management feels they are positioned very well in this space for strong growth.
  • The Bobcat dealer network has lagged Polaris in the commercial utility segment and the sell through of the Brutus vehicles will be slower than consumer vehicles because of the slower commercial vehicle buying cycle.
  • Management was even more upbeat than usually about the 2014 models that will be announced at the dealer meeting in a few days.

Learn more:  Seekingalpha.com (Earnings call transcript)

Comment:  Polaris management continues to execute on their strategic plans very well. They are setting the industry standard for inventory management, operational efficiency and product development and innovation. In an increasingly competitive market it will be interesting to see what features and innovations their new models will have.

Quadski Maker Gibbs Looks to Expand

Posted on by
Reply

Quadski from Gibbs Sports Amphibians

Gibbs Sports Amphibians, the manufacturer of the Quadski, is planning to launch to new models and expand their dealer network.  The Quadski is an amphibious vehicle that converts from an ATV to a PWC in less than five seconds. Gibbs currently has five dealers for the Quadski but expects to have one hundred dealers by the end of 2014. They will need the increased distribution as the company expects to produce 1,000 Quadskis this year. Gibbs is also looking to export their product to international markets.

The Quadski costs about $40,000 and is available in blue, black, yellow, silver and red. It is powered by a 175 hp BMW Motorrad engine and can reach speeds of 45 mph on land or in the water.  In addition to the Quadski, Gibbs is planning on launching new consumer, commercial and military products over the next 18 months. Learn more:  Powersportsbusiness.com

Comment:  Selling 1,000 of these vehicles at $40,000 apiece is an ambitious goal, especially as a purely leisure vehicle. On the other hand, law enforcement and military organizations might find this to be a compelling technology for specific applications and could help meet that goal. The Quadski does represent the continuing innovation and product advancements in the STOV market. Lately the versatility of the vehicles has been a focus, whether it is convertible seating in the Honda Pioneer UTV, the ability to use various work attachments in the Polaris/Bobcat Brutus or now the ability to travel on land or water. It is the versatility of STOVs and the ability to match the vehicle to an application or specific set of applications that has helped the market grow strongly in an overall slow economic recovery.

News from Lithium Boost Technologies

Posted on by
Reply

Lithium Boost Technologies signs manufacturing agreement with Bright Technologies

Lithium Boost Technologies, which produces a lithium battery system to replace the lead acid battery pack in golf cars, industrial and utility vehicles, recently announced a new safety feature and strategic manufacturing agreement. Their new interlock feature locks the vehicle in place to prevent the user from moving it while the battery is in the charging process.

The company also signed a manufacturing agreement with US/Mexico based Bright Manufacturing to produce wiring harnesses and electronic boards for the the battery systems. The agreement will allow the Lithium Boost to improve delivery time and meet growing demand.

Lithium Boost offers a variety of lithium iron phosphate battery solutions including, LithiumBoost Plus for leisure use, LithiumBoost Pro for industrial, and LithiumBoost Ultra for off-road. Depending on vehicle application, the product is available in 36, 48, & 72 volt systems and 60ah-200ah lithium-ion battery cells. Learn more:  Lithiumboost.com