Nov. 12, 2007 – Both utility and recreational UTVs prove profitable
November 12, 2007
Filed under Features
By Karin Gelschus
LOUISVILLE – The Green Industry Expo hosted more than 600 lawn and garden companies that treated attendees to some of the newest lawn and garden products on the market. Among the exhibitors were utility and recreational UTV companies, both of which have seen significant growth during the past couple years and expect that to continue.
As the UTV market becomes increasingly competitive, companies are placing more focus on the unique aspects of their utility vehicle(s).
Being in the utility vehicle market for seven years, Cub Cadet is adjusting part of its product lineup by unveiling two, new recreational models – the 4×4 EFI ($9,500) and 4×2 FIS ($6,999). MTD’s, parent company of Cub Cadet, Senior Vice President of Sales Nathan Walker says the company evaluated the UTV market once it got some momentum with its utility line.
“We realized that two-thirds of the market was the recreational part,” he said.
The new 4×4 EFI, which is specifically designed to be a crossover utility vehicle, has a towing and payload capacity of 1,400 pounds and reaches speeds of 32 mph. The 4×2 FIS is the 4×4 EFI’s counterpart in a two-wheel drive option with dual-purpose tires. Walker says Cub Cadet has always been known for its independent suspension system, so it isn’t going to stray from that, but customers will see more engine features, higher speeds, and the company will continue to refine and enhance its products in the future.
“The beauty of our product is you can get out and play with it on the weekends,” Walker said. “If you need to get serious at all, tow 1,400 pounds, you can do that with our units.”
Cub Cadet is going full force into the recreational market by getting its product into some non-traditional Cub Cadet dealerships, powersports and ATV dealerships. Walker says they are also advertising in trade publications and media centered toward the outdoor enthusiast.
“We mentioned we have over 1,500 servicing dealers nationwide,” Walker said. “We intend to expand that number and sign on people just to represent our utility vehicle product line.”
Entering in the recreational market of UTVs has increased profitability for Cub Cadet.
“Sales percentage-wise we’ve been growing double digits for the past three years,” Walker said and added they expect to see continued growth throughout 2008.
“Even if people buy them (UTVs) for mainly work, they still want to have some fun with it sometimes, whether it’s taking it for a cruise on the property or on the trails,” said Sean Sundberg, John Deere B2B planning manager. “That’s what’s driving the growth of the industry right now.”
Contrary to Cub Cadet, John Deere doesn’t intend to place the UTVs in dealerships other than their existing ones.
“We want the consumer that already shops at John Deere for utility stuff to come there for recreational stuff,” Sundberg said. “Down the road we can always evaluate moving to a different channel.”
John Deere is taking the recreational market seriously in the way it is investing a lot of its engineers’ resources into its utility vehicles.
“We do things a little different. Instead of coming out with a product that we think fits and trying to market to them,” Sundberg noted. “We actually spend a lot of time talking to the customers, watching, so when we come out with a product, it’s exactly what they want. We’re trying to do it smarter.”
John Deere’s latest utility vehicles are the Gator XUV 620i 4×4 ($9,499 green and yellow; $9,599 olive and black) and the Gator XUV 850D 4×4 ($10,599). They boast four-wheel drive, independent rear suspension and a top speed of 30 mph.
Like so many companies in the UTV market, Sundberg confirms John Deere has seen significant growth in the UTV segment and expects it to stay that way for the next few years.
“There’s been a significant increase,” he noted. “Right now the economy is a little bit in the flux, but we still see that consumer on the performance side of it; they are passionate about it, and that’s where it’s going to go.”
Unlike Cub Cadet and John Deere, Kubota’s Product Manager of Utility Vehicles Daniel Muramoto says Kubota plans to stay strictly utilitarian because it believes there’s a cap with the recreational side of UTVs.
“The sports side has a ceiling in terms of how fast you can go because it gets to a point where you approach ridiculousness in terms of what you’re going to attempt to do with a little side-by-side,” Muramoto said.
Kubota’s new RTV900 is the only type of vehicle that can run heavy-duty hydraulic tools such as a chainsaw or tree trimmer. It’s possible because of the hydraulic utility valve system located at the rear of the vehicle that’s standard equipment, which allows hookup for hydraulic tools. Muramoto says Kubota is also credited with the increase in diesel penetration with UTVs.
The tractor market is Kubota’s core business, Muramoto says, but the RTV is a significant portion, and it contributes to added volume and productivity.
“We expect to see continued growth and plan to keep adding models,” he said.
Ruff & Tuff Electric vehicles
Ruff & Tuff is offering a utility vehicle much different than other companies – one that is 100 percent electric. Ruff & Tuff Electric Vehicles Marketing Manager Katie Boozer says the vehicle charges for four-six hours and can run 30 miles on a standard charge. The company’s vehicles are powered by Discover “Clean & Green” environmentally friendly batteries.
Originally manufacturing aftermarket golf carts and accessories, Ruff & Tuff entered the side-by-side market in 2005 with the RT Hunter model. The 2007 Hunter ($6,695) two-wheel drive UTV has a high-torque of 14 hp, half-ton payload of people and equipment and reaches speeds up to 25 mph. The 2008 model will be an all-electric four-wheel drive vehicle.
The vehicle’s purpose is purely recreational, and Boozer says the company plans to stay in that market.
All Ruff & Tuff products are manufactured in China and distributed out of Winnsboro, S.C.