{"id":6693,"date":"2019-05-16T19:57:59","date_gmt":"2019-05-16T19:57:59","guid":{"rendered":"https:\/\/smallvehicleresource.com\/blog\/?p=6693"},"modified":"2019-05-16T20:01:44","modified_gmt":"2019-05-16T20:01:44","slug":"tariffs-affect-stov-market","status":"publish","type":"post","link":"https:\/\/smallvehicleresource.com\/blog\/2019\/05\/16\/tariffs-affect-stov-market\/","title":{"rendered":"Tariffs Affect STOV Market"},"content":{"rendered":"\n
\"Polaris
Tariffs have hit Polaris, the manufacturer of UTVs like the 2019 RZR S4 1000 EPS shown here, hard.<\/figcaption><\/figure>\n\n\n\n

Tariffs Hit Polaris Hard<\/h2>\n\n\n\n

In a recent interview with CNBC<\/a> Polaris CEO Scott Wine commented on the affects of the tariffs on the company. He stated that the increase to 25% would be “catastrophic”. The company previously estimated<\/a>  that they would cost the company $40 million in the last fiscal year. At the 10% tariff level they were guiding towards an approximately $90 million hit for the current fiscal year. However, at the 25% level that would jump to $195 to $200 million. In addition to these China specific tariffs, other aluminum and steel tariffs hurt the company as well. <\/p>\n\n\n\n

Polaris More Exposed<\/h2>\n\n\n\n

Polaris is in a particularly tough spot with the tariffs because of their supply chain relative to the other major UTV manufacturers. The major Japanese OEMs, Yamaha, Honda and Kawasaki, mainly source their imported parts from Japan and thus avoid the onerous China tariffs. Can-Am produces products in Canada and Mexico and therefore, are less exposed to the tariff regime as well. Polaris on the other hand sources more of their components from China.<\/p>\n\n\n\n

Farmer Segment Exposure<\/h2>\n\n\n\n

UTV manufacturers exposed to the farm segment are likely to suffer as well. Farmers report<\/a> lower commodity prices and higher equipment prices. The tariffs are increasing farm equipment prices in the range of 20% according to some farmers. Although this refers to large pieces of farming equipment, if farmers are not spending on these large pieces and trying to cut costs in general, they are likely forgoing UTV purchases as well. John Deere and Kubota are likely the most effected brands as this is a strong segment for them. However, Can-Am could possibly be feeling an impact in their Defender line and Polaris in their Ranger line.<\/p>\n\n\n\n

Some Value Brands Vulnerable<\/h2>\n\n\n\n

In the past few years value brands have made inroads at the lower end of the price scale. Many of these companies are sourcing parts or vehicles from China. For example, CFMOTO is based in China. In addition, Cub Cadet UTVs are manufactured by Hisun in China. Given their value pricing approach, the tariffs are likely putting some pressure on these companies. If they have to raise their prices too much, they lose their value proposition in relation to the major brands in the market.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tariffs Hit Polaris Hard In a recent interview with CNBC Polaris CEO Scott Wine commented on the affects of the tariffs on the company. He stated that the increase to 25% would be “catastrophic”. The company previously estimated  that they … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,12,14,997,21,1829,27],"tags":[257,2732,689,720,2189,2678],"class_list":["post-6693","post","type-post","status-publish","format-standard","hentry","category-globalization","category-management","category-market-trends","category-polaris","category-regulation-policy","category-side-by-side-2","category-utility-vehicles","tag-china","tag-farmers","tag-john-deere","tag-kubota","tag-polaris","tag-tariffs"],"_links":{"self":[{"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/posts\/6693"}],"collection":[{"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/comments?post=6693"}],"version-history":[{"count":4,"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/posts\/6693\/revisions"}],"predecessor-version":[{"id":6717,"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/posts\/6693\/revisions\/6717"}],"wp:attachment":[{"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/media?parent=6693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/categories?post=6693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smallvehicleresource.com\/blog\/wp-json\/wp\/v2\/tags?post=6693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}