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ATV sales: When minus might be a plus – July 3, 2006

July 3, 2006
Filed under Features

The fact that sales of ATVs sold by major manufacturers were down in 2005 is indisputable. What it means for the industry is anything but.
Data from the companies reporting to the Motorcycle Industry Council (MIC) showed a 4 percent decline in sales in 2005. But the year-end total was not the first sign that the annual increase in ATV sales was slowing. The percentage growth in ATV sales has slipped each year since 2001, when the industry saw a 12 percent growth. Since then the percentage growth has dropped to 5.5 percent in 2002, 3.8 percent in 2003, 1.7 percent in 2004 and finally the decrease in 2005.
While many in the industry are pointing to the increasing number of low-cost Chinese imports for sagging MIC sales numbers, others are painting an entirely different picture. Some, including Suzuki’s Rod Lopusnak, say the MIC sales numbers aren’t an accurate portrayal of the health of the ATV industry.
Lopusnak, Suzuki’s ATV operations manager, said he’s seen numbers that suggest between 200,000 to 300,000 Chinese imports were sold in the United States in 2005.
“If you put that on top our 800,000 (MIC-reported sales of new ATVs) and then you put utility vehicle (UTV) sales into that, you’re easily over a million unit sales,” he said. “It’s a pretty impressive time in our industry.”
Kawasaki’s Russel Brenan also believes the Chinese imports are not taking a toll on the industry.
“The industry is maturing,” said Brenan, Kawasaki’s trade/enthusiast media supervisor, “and certain categories are seeing some saturation levels. There is a slight decline in models below the ‘Big Bore’ (large-engine displacement) segment. Consumers generally see ATVs as family recreation and miserly on gas. The increased fuel costs have not affected the public’s desire to recreate on these machines.”
Brenan said the industry is only down approximately 2.4 percent, which, considering the market’s total unit volume, is relatively flat, adding that the market actually leveled off in 2004, and is now maintaining that level.
“The ATV market still accounts for considerable unit volume,” he said. “The future is healthy as is evidenced by the continual increase in quality ATVs coming out of Japan.”
Brenan said the middle classes are the flattest for Kawasaki at the moment with the sport segment showing modest growth.
While most traditional dealers are hesitant to carry low-cost Chinese ATVs due to quality and reliability concerns, consumers aren’t always so slow on the take. The lower-priced brands can be found at powersport outlets where ATVs are not the main product or online where after-sales support is relatively non-existent compared to a dealer. But the dollar savings are evidently worth the risk for many where a 150cc clone can be taken home for $900 as opposed to a 90cc major manufacturer brand for $2,700. From a dollar-for-dollar standpoint, many consumers cannot justify spending so much more for what they view to be a comparable product.
But Glenn Hansen isn’t bothered by the trend. Hansen, communications manager for Suzuki, said ATV sales for the most part are on the up-and-up. “ATV sales are not going downhill for Suzuki,” he said. Overall through May, Hansen said ATV unit sales for Suzuki are up. “Yes, it’s a small increase,” he said, “but sales are still up.”
While some OEM contacts declined to go on record, most, like Polaris’ Donna Beadle, echoed Hansen’s and Brenan’s thoughts that despite the numbers — or lack thereof from Chinese manufacturers — ATV sales in the United States are a worthwhile effort.
“There are simply more choices than there used to be,” Beadle said. “It’s true that the traditionally tracked standard ATV is showing small decreases year-over-year. But looking at all of the information available, however, it is clear that overall, consumers are still buying more four-wheeled recreational vehicles than ever. This is still a very good business to be in.”

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