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Oct. 15, 2007 – UTV ratio of utility vs. sport thus far following ATV trend

October 10, 2007
Filed under Uncategorized

The UTV market may be different than its predecessor, the ATV, in some aspects — price being one — but the ratio of utility vs. sport/recreational models in terms of annual retail sales and overall demand appears to be consistent with quads.
That’s the finding from a national dealer survey conducted for Powersports Business, not to mention the opinion of several of the leading side-by-side OEMs.
The annual ATV retail sales market, roughly 760,000 the past two years, can be separated into the utility side, which makes up about two-thirds of those sales, and the sport/recreational side, which comprises the other third of annual retail sales.
That ratio of utility vs. sport also is holding true thus far for UTVs.
The Powersports Business survey of 150 dealers from across the nation shows 57 percent of dealers said they were seeing more demand for utility-designed UTVs, which often have a speed limited to 25 mph and are designed to handle heavy cargo loads. Twenty-nine percent were seeing more demand for the sport side-by-sides, vehicles that can go much faster but often don’t have the cargo capacity of the utility vehicles. Fourteen percent were not sure which UTV segment was capturing the most consumer interest.
Those findings were not surprising to officials at the leading powersports UTV manufacturers.
“If you look at the core of the market, what makes it up and what makes the market really successful, it’s really that utility segment,” said Matt Homan, Polaris Industries’ side-by-side general manager. “We believe the utility side of the market is for sure the biggest segment right now and it will probably remain the biggest segment for awhile.”
It figures, however, not to have the largest sales percentage growth over the next few years.
Vince Iorio, Kawasaki Motor Corp.’s product manager for ATV and UTVs, believes the sport side of the UTV market is currently selling between 50,000-60,000 units per year.
Iorio said “we easily see that (annual retail sales number) doubling in the next three to four years.”
That’s exactly why Kawasaki and Polaris launched recreational-minded side-by-sides this year. Kawasaki showed off its three new Teryx models at its recent national dealer meeting in Las Vegas. The three models will be available in January, starting at a MSRP of $9,799.
Polaris’ RZR (MSRP: $9,999) is already available in dealer showrooms and has by some reports to Powersports Business already been a retail hit. Several dealers have reported already selling their initial allotment, some to out-of-state consumers who couldn’t find a vehicle closer to home.
In fact, dealers who report having more demand for sport side-by-sides are reporting better year-over-year new UTV sales than their counterparts who see more interest in the utility UTVs. Dealers seeing more demand for sport UTVs are up in their yearly side-by-sides sales more often (63 percent vs. 59 percent for dealers seeing more demand for utility UTVs) and down in new UTV unit sales far less often (7 percent vs. 14 percent.)
And the interest on the sport side is not limited to dealers close to the dunes on the West Coast, which are so often associated with sport side-by-side riders. The Powersports Business survey found dealers reporting more interest in the sport vs. utility segment spread throughout the nation, from Texas to California to Florida to Connecticut and Massachusetts.
While the OEM interest in the sport side of the UTV market still appears to be growing, the aftermarket industry appears to already have a firm grasp of it. Dealers who report having more demand for sport UTVs are on average making more on PG&A with their new unit sales than their counterparts who see more interest in the utility UTV ($813 per new unit to $756 for utility UTVs). Interestingly enough, these same dealers are on average making less PG&A sales on new ATVs ($381 to $362.)
Dealers seeing more demand for utility-designed UTVs, however, are reporting a slightly higher gross profit margin (15 percent vs. 13 percent) than their counterparts.
— Neil Pascale

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