BRP Announces FY18 Q2 Quarterly Results

Maverick X3 X RS Turbo R

The Maverick X3 X RS Turbo R helped drive strong sales in the second quarter.

BRP, manufacturer of Can-Am products, recently announced their financial results for the second quarter of their 2018 fiscal year which ended July 31, 2017. (All dollar amounts are in Canadian dollars.) Revenues increased 20% for the quarter to $1,027 million driven by strong demand in side-by-side and personal watercraft. Net income increased $168.9 million to $100.1 million.

It was a strong quarter for BRP and they continue to make solid gains in the UTV market and continue to take market share. The Defender line continues to meet with success on a quarter to quarter basis. The company has built out their dealer network and are looking to improve dealer performance. Look for them to introduce additional models on a regular basis.

The following are additional highlights from the earnings call and presentation that relate to the utility vehicle market.

  • Company introduced the 172hp Can-Am Maverick X3 Turbo R model during the quarter
  • North American retail sales for side-by-sides increased 50% for the quarter in an industry that grew low teens %.
  • North American ATV retail sales grew high teen % in an industry that grew low single digit %.
  • For side-by-side model year ending June 30, Can-Am retail sales grew mid-thirties % in an industry up mid-single digit %.
  • The X3 and the Defender line are particularly strong performers.
  • Side-by-side sales are driving parts, accessories and clothing revenue hire
  • Management is seeing results from improving dealer performance and is concentrating on that area rather than looking to add new dealers. Nearly 300 dealers were added in the last four years.
  • Side-by-side sales outside of North America are very strong as well.
  • Management reports that promotional activity in the ATV and side-by-side market is high with many new models being introduced and OEMs looking to reduce inventory.

UTV Industry News Briefs

CFMoto Motor company is planning to raise about $68 million in an initial share offering on the Shanghai Stock Exchange.  Learn more:  Reuters.com

Can-Am is the official off-road vehicle for the Luke Bryan Farm Tour. There will be vehicle display booths at each tour venue. A main target customer for Can Am’s relatively new Defender product line is farmers.  Learn more:  Powersportsbusiness.com

Wells Fargo Commercial Distribution Finance extended its preferred dealer financing program with Kymco USA, a long time client. Separately, Kymco is offering a “Customer Choice” offer of customer cash or extended warranty on purchases of 2015 and 2016 year models through Sept. 30, according to its website. Learn more:  Powersportsfinance.com

Kawasaki is donating five Mule UTVs to aid recovery efforts after the destruction left by hurricane Harvey. In addition the company is matching employee donations made to non-profit organizations.  Learn more: Thedrive.com

Yamaha Motor Corp. will launch their power-assist electric bicycles in the United states beginning in 2018. While the company has been in the e-bike business for decades, the US market has not been targeted until now. Four models will be available ranging from street cruiser to more of a racing bike. Learn more: LATimes.com

Polaris Issues Recall of 1,600 General UTVs

2017 Polaris General Base

The 2017 Polaris General Base model in red is part of the recall.

2017 Polaris General Hunter

The Hunter version is recalled as well.

Polaris Industries recently announced the recall of approximately 1,600 2017 General utility vehicles due to inconsistent tire pressure information which could result in improperly-inflated tires, posing a crash hazard. The affected models are the Base model in red and the Hunter model in camo. No injuries have been reported related to this recall. Owners should immediately stop using the recalled vehicles and contact Polaris for a new tire pressure label and addendum to the owner’s manual. Polaris can be contacted at 800-765-2747 or at www.polaris.com for more information.

This is a relatively small recall compared to many of the industry recalls. In addition, the cost to Polaris for addressing the issue would appear to be minor. SVR tracks industry recalls and has compiled an ongoing list.

The complete recall information from the Consumer Safety Product Commission follows.

Recall Details

Description:  This recall involves all model year 2017 Polaris GENERAL Base and GENERAL Hunter two-seat, side-by-side recreational off-highway vehicles (ROVs). The GENERAL Base was sold in red and the GENERAL Hunter was sold in camo. “Polaris” is printed on the front grill, “GENERAL” is printed on the rear panel and “1000” is printed on the front panel. The VIN is printed on the left rear vehicle frame below the cargo box.
Remedy:  Consumers should immediately stop using the recalled vehicles and contact Polaris for a new tire pressure label and addendum to the owner’s manual. All known purchasers are being contacted directly by the firm.
Incidents/Injuries:  None reported
Sold At:  Polaris dealers nationwide from June 2016 through July 2017 for between $16,300 and $19,000.
Manufacturer(s):  Polaris Industries Inc., of Medina, Minn.
Importer(s):  Polaris Industries Inc., of Medina, Minn.
Manufactured In:  U.S. and Mexico
Units:  About 1,600
Marc Cesare, Smallvehicleresource.com

Yamaha Introduces 2018 Wolverine X4 UTV

2018 Yamaha Wolverine X4

The new 2018 Yamaha Wolverine X4, a 4-passenger UTV designed to be more compact and nimble for recreational use.

Yamaha recently announced their new 4-passenger 2018 Wolverine X4 side-by-side. The Wolverine X4 features a new 847cc, twin-cylinder engine and stowaway full-size rear seats for flexible cargo space. To improve efficiency, the engine features a dry-sump design for a more compact layout, and an offset cylinder block to reduce friction loss, while rubber engine-mounts and a geared counterbalancer are designed to greatly reduce vibration at idle and throughout the RPM range, as well as reduce noise. The X4 also includes the new Yamaha Chip Controlled-Throttle (YCC-T®), a drive-by-wire system providing precise throttle control, and a key controlled speed system for restricting the vehicle’s top speed to 25 mph. The dimensions (59.8″ wide and 82.7″ wheelbase) of the new Wolverine X4 are purposely on the compact end of the scale to provide a more nimble vehicle for more technical trail riding. Other key features and specs include:

  • Ultramatic V-belt transmission with all-wheel engine braking
  • Yamaha On-Command 3-way locking differential; 2WD, 4WD, full diff-lock 4WD
  • 8.7″/8.9″ of front/rear suspension travel
  • 10.7″ of ground clearance
  • Rear self-leveling shocks
  • 26″ Maxxis tires
  • Electronic power steering
  • Hydraulic disc brakes
  • 600 lb. cargo bed capacity
  • 2,000 lb. towing capacity
  • Full underbody skid plates
  • Fully enclosed doors
  • Wide fenders
  • LED headlights and taillights
  • Two 12V DC outlets
  • Four pre-wired accessory switches
  • MSRP $15,999 in Graphite

Model variations include the Wolverine X4 in:

  • Yamaha Blue with overfenders and cast aluminum wheels (MSRP $16,499)
  • Realtree Xtra camo with overfenders and cast aluminum wheels (MSRP $16,899)
  • Matte Silver and Matte Carbon Special Edition (SE) models with overfenders, painted bodywork, color-matched interior and shock springs, and cast aluminum wheels (MSRP $17,249)

According to Yamaha managers they are trying to deliver a 4-seat UTV with some of the handling and size characteristics of a two seater and a high degree of versatility. They believe this segment of the market is currently underserved.

Learn more:  Yamahamotorsports.com

Comment:  The fact that the Wolverine X4 has been designed from the ground up and includes an entirely new engine shows the level of commitment Yamaha has made to the UTV space. They have rolled out new Wolverine and Viking models for 2018 after making a big push in the last two model years in the sport end of the market with the YXZ. The UTV market has become highly competitive and manufacturers will need to be introducing innovative new models on a regular basis to drive sales.

Marc Cesare, Smallvehicleresource.com

New SVR Market Study Predicts Solid Growth For STOVs

In a new market study on the small task-oriented vehicle (STOV) market in the US and Canada, Small Vehicle Resource (SVR), LLC predicts growth over the 2017-2021 period. The market research reveals four trends coming together that will result in market gains of mid to high single digits in the forecast period and an industry value in the range of $15.8 billion at retail including parts and accessories.

  • Growing appreciation in a highly diverse market for the effectiveness of STOVs specifically designed to meet individual segment needs;
  • Increasing competition that will drive new product development as manufacturers seek to strengthen current market strongholds and stake out additional market segments with new and/or expanded product lines;
  • Continuing focus on accessories and attachments to enhance the versatility and value of STOVs, boost revenues and supplant other vehicle types such as pick-ups and tractors for work and full-size vehicles for transportation;
  • Golf manufacturers emphasizing non-fleet markets over the continuing slow/negative growth golf car fleet market.

Steve Metzger, SVR Managing Director, states that, “While the fleet market remains in a downsizing mode, it is a marginal decline. It will remain a significant component of the golf car-type vehicle market. On the other hand, SVR forecasts continued sizable gains in the non-fleet market, including light utility and transporter vehicles and personal transportation vehicles.” Metzger also notes, “SVR anticipates that important new opportunities lie ahead, including self-driving technology applications, as well as potential for a much broader market on a global basis.”

Marc Cesare, SVR Managing Director adds, “The off-road utility vehicle market continues to be a competitive vortex for golf car manufacturers seeking new markets, the powersports industry, and traditional manufacturers of work related utility vehicles. While market growth will be slower than the recent high growth years, it remains solid,” Cesare notes, “ and competition will drive product innovation in both base vehicles as well as options and attachments that improve vehicle performance and versatility.

Approximately a third of the market value is from electric powered STOVs, primarily in the form of golf cars or golf car derived utility vehicles and personal transportation vehicles (PTVs). PTVs are golf cars modified for gated community or low speed public road use and include low speed vehicles (LSVs). Key trends and projections for the market include:

  • In total, demand for electric powered STOVs will increase to over 300,000 vehicles in 2021.
  • The demand for non-fleet golf car type vehicles will more than offset the slight decline in the fleet golf car market, moving from under 50% of the total demand to over 50%.
  • Light utility vehicles produced by golf car and other manufacturers are expected to grow approximately 10% annually to 2021.
  • PTVs will continue to grow low single digits during the trend period and electric powered PTVs will slowly increase to represent nearly 75% of the market by 2021. LSVs will account for about one-fifth of the PTVmarket.

Metzger, states that, “The potential for even greater electric powered STOV growth is there. In the PTV market the combination of market forces and emerging technologies could greatly increase the applicability of PTVs. Increasing urbanization is expected to create congestion and pollution issues, and the search for new transportation solutions. The advent of self-driving vehicle technology along with improved battery technology creates the potential for mobility platforms that can in part be based on small PTVs.” He further notes, “Gated communities with their more controlled environments could prove to be excellent testing grounds and the concepts could then migrate to urban environments that are well suited to low speed vehicle operations.”

The new study, the eighth in the series of studies produced by SVR since 2000, covers utility, off-road, and personal transportation vehicles, and fleet golf cars.

The study is entitled, 2017 Market Report on the Small, Task-Oriented Vehicle Industry: Transition and Growth –Trends from 2012; Forecasts to 2021. 

For additional, detailed information on study content a brochure is available with a table of contents ( Small Task-Oriented Vehicle Study – Analysis & Forecast (PDF)) or contact:

Steve Metzger,  smetzger@smallvehicleresource.com

(914) 293-7577

Textron Off Road Announces 2018 Models

Textron Off Road Logo

Textron Off Road announced their 2018 UTV lineup, the first since Textron Off Road replaced the Arctic Cat name for UTVs and ATVs. The 2018 UTV lineup includes 15 different models including Wildcat, Stampede, Recoil and Prowler nameplates. While Textron Off Road kept many of the Wildcat offerings they have ditched the HDX and most of the Prowler offerings which had previously been sold under the Arctic Cat name. They also dropped their non-EPS base model for their Stampede lineup and changed the names of the other Stampede models.

  • Stampede EPS is now Stampede
  • Stampede EPS+ is now Stampede X
  • Stampede XTR EPS is now Stampede 4
  • Stampede XTR EPS+ is now Stampede 4X

Here is a summary of the 2018 lineup:

  • Recreational UTVs:  Wildcat X, Wildcat X LTD, Wildcat Trail, Wildcat Trail XT, Wildcat Trail LTD, Wildcat Sport XT, Wildcat Sport LTD, Wildcat 4X LTD
  • Crossover UTVs:  Stampede X, Stampede 4X, Stampede, Stampede 4
  • Electric UTVs:  Recoil, Recoil iS
  • Work/Entry Level UTV:  Prowler 500

The lineup is quite broad covering a range of segments from high performance to sport recreational riding, trail riding, 4-passenger and crew, electric powered, work, crossover and even entry level general utility with the Prowler 500. The following are key specs for some of the 2018 models:

Textron Off Road Prowler 500

The 2018 Prowler 500 from Textron Off Road.

Prowler 500

  • 443cc liquid-cooled 4-stroke, twin cylinder single overhead cam engine with EFI
  • On-Demand 4WD and Duramatic CVT
  • Double A-arm front and rear suspension with 7.5″ of travel
  • 10″ of ground clearance
  • 25″ Maxxis tires on steel wheels
  • 500 lb. dump bed capacity
  • 1,500 lb. towing capacity
  • Halogen low/high headlights and taillights
  • Door nets and 3-point seatbelts
  • 2-passenger
  • MSRP $8,499
Textron Off Road Wildcat X LTD

The 2018 Wildcat X LTD now under the Textron Off Road brand.

Wildcat X LTD

  • 951cc liquid-cooled 4-stroke, V-twin cylinder single overhead cam engine with EFI’
  • Electric 2/4WD with 4WD lock
  • Rapid response clutches
  • EPS
  • Double A-arm front suspension and 5-link rear suspension with Elka Stage 5 shocks with dual speed compression adjustment and rebound adjustment
  • 17″/18″ of front/rear suspension travel
  • 13″ of ground clearance
  • 27″ ITP Blackwater Evolution tires and aluminum ITP beadlock wheels
  • 300 lb. cargo box capacity
  • Dual LED headlights, brake lights and taillights
  • Half doors
  • 3-point seat belts and seat belt rev limiter
  • MSRP $18,499
Textron Off Road Stampede X

The 2018 Textron Off Road Stampede X previously known as Stampede EPS+.

Stampede X

  • 80 hp, 846cc liquid-cooled 4-stroke, twin cylinder single overhead cam engine with EFI
  • On-Demand AWD with automatic locking front differential and selectable locking rear differential
  • EPS
  • Double A-arm suspension front and rear with Performance shocks
  • 9.5″/10.5″ of front/rear suspension travel
  • 11.25″ of ground clearance
  • 27″ Maxxis Bighorn 2.0 tires and aluminum alloy wheels
  • 600 lb. dump bed capacity
  • 2,000 lb. towing capacity
  • Standard doors
  • Front steel brush guard
  • LCD display
  • USB outlet
  • Low/high beam headlights
  • Extended cab storage space
  • 3-point seat belts and seat belt rev limiter
  • 2-passenger
  • MSRP $14,799

While the Textron Off Road brand has absorbed the Arctic Cat brand, production for the Stampede models is being integrated into existing Arctic Cat production facilities. The Stampede model production is moving to the Thief Falls River, MN facility to join the Wildcat and Prowler production. Stampede engine production will move from Germany to St. Cloud, MN, which produced engines for Arctic Cat UTVs, ATVs and snowmobiles.

Current owners of Arctic Cat side-by-sides and ATVs can continue to visit their Arctic Cat dealer for vehicle service, parts and accessories.

Learn more:  Textronoffroad.com

 

Nikola Powersports Announces Nikola Zero Electric UTV Specs

Nikola Zero electric UTV

Nikola Powersports has released the finalized specs for their Nikola Zero electric UTV.

Nikola Zero electric UTV Nikola Zero electric UTVNikola Powersports, which had previously revealed a prototype electric UTV, has announced the final specifications and design for their Nikola Zero four-passenger UTV. The specs are quite impressive with a 415 hp and 3,675 lbs of torque base option that can be bumped to 555 hp and 4,900 lbs of torque. The company is also touting the vehicle as a potentially street legal ready vehicle. The Nikola Zero has three battery options:  75kWh, 100kWh and 125kWh. The Zero will have a 200 mile range in 4×4 off-road mode with the largest battery pack. According to CEO Trevor Milton,

The Nikola Zero will be the first UTV to come with optional Anti-Lock Braking Systems (ABS), stability control, anti-roll-over, traction control and torque vectoring. Normally these options are reserved for high-end sports cars and not normally found in UTVs. We have worked hard to make these UTVs street legal, and in many states, you may be able to drive the Nikola Zero UTV to work. Once you test drive the Nikola Zero, you will want to trade in your current UTV. No other competitor UTV can match the Nikola Zero’s performance. We are not talking about a few seconds faster than the competition, we are talking about laps faster, with speeds up to 0-60 in 3.9 seconds with four passengers inside.

Key specs of the Nikola Zero include:

  • 4 passenger
  • 400-volt AC Motors
  • On-Demand 4×4 or 2×4 at any speed
  • Baja style hubs and disc brakes with Motor Regenerative Braking
  • Active descent control
  • 20″ of front/rear travel with 3.0″ FOX Podium Internal Bypass Shocks
  • Electronic power steering
  • 4-Wheel Hydraulic Disc brakes with Triple-Bore Front & Rear Calipers
  • 32″ tires with Method Wide-5 beadlock wheels
  • 14″ of ground clearance
  • 62″ wide and 74″ high
  • 3,500 lbs dry weight
  • LED headlights and taillights
  • Digital gauge
  • 10″ and 7″ displays
  • Options
    • Anti-lock braking
    • Street legal package
    • 555 hp
    • 100 kWh and 125 kWh battery packs
    • 4×4 torque vectoring system
    • Anti-roll protection
    • Traction control
    • Front and rear 4,500 lb. winches
    • Factory audio system
    • Windshield
    • Mirrors
    • Cameras

Some additional information about the Zero:

  • The lithium battery pack ranges from 500 to 1,500 lbs depending on the size and is waterproof
  • Each wheel has an electric motor
  • The solar option will provide about 40 miles per day in range
  • There are several charging options providing charging times of anywhere from 3 to 14 hrs to full charge
  • Over-the-air software updating

Nikola Zero pricing starts at $35,000 and you can currently reserve one with a $750 deposit. A dealer ride and drive event is being planned in December 2017 in St. George, Utah. The company expects to start delivering the UTVs sometime in 2018. Nikolamotor.com

Comment:  These are really big battery packs, similar to what Tesla’s use. This raises questions about whether they can really hit that price point and where do they fit the batteries and cooling system for packs that large. On price Tesla’s battery pack is in the range of $190 per kWh from what I have read with the aim to reduce that by 30% for the new Model 3 which would reduce the cost to $135 per kWh. At $135 the cost of a 75 kWh pack is $10,125 and at $190 the cost is $14,250. This is assuming Nikola Motor can match Tesla’s costs which is unlikely considering Tesla is thought to have the lowest battery pack costs in the market and has much higher volumes than Nikola Motor.

I am skeptical about the price point but the technology is certainly available to build such a vehicle. The pricing has to be considered in the context of the high end UTVs that the Nikola Zero will be competing against which are already in the $25-30k range. This segment of the market is certainly driven by product features and performance and a portion of the segment may be willing to pay a sizable premium if the vehicle performs as advertised.

Another issue is whether consumers in this segment want to switch from ICE to electric powered vehicles regardless of performance. The sound of a high-powered engine is part of the fun, is it not?

The street legal aspect of the Nikola Zero could change the value proposition and make the price premium more palatable. From the local ordinances SVR tracks, more and more municipalities are allowing UTVs to be used on local roads. Granted, these are usually low speed roads, but if you can use the vehicle to also make local trips downtown then it becomes more like a second car.

Possibly the biggest issue is if the company can ever get the vehicle to market. There have been plenty of electric vehicle startups that have had impressively designed vehicles but are never put into production. I would like the vehicle to actually make it to dealers. Then we can see if it can disrupt the market.

Marc Cesare, Smallvehicleresource.com

Mahindra To Build UTVs in the US

The Mahindra mPact XTV 1000 L utility vehicle is one of six models previously developed by the company in partnership with Intimidator, Inc.

Mahindra is planning on launching an off-road utility vehicle targeting farmers and hunters, and will build it in the US. In an interview by Barron’s, Mahindra & Mahindra’s CEO Pawan Goenka covered a range of topics including a new manufacturing plant in Detroit. The first product produced by the plant will be off-road utility vehicles.

In April 2015 Mahindra announced a partnership with Intimidator Inc. based in Arkansas to develop and manufacture Mahindra’s current mPact lineup of six UTVs. This latest interview indicates that moving forward they will be developing and manufacturing their UTVs themselves. According to the CEO Mahindra currently has about 540 dealers in the US who sell Mahindra’s tractors. While the brand is not necessarily a household name, it is not an obscure brand either in the farming market.

Comment:  This marks a more serious commitment to the UTV market. While some companies have developed partnerships to add UTVs to their product lineup, they have not had intentions of moving into manufacturing themselves. These partnerships have been a joining of complementary competencies and assets. Usually one company has the distribution channel while the other has the expertise and resources to develop the UTVs. In Mahindra’s case they likely used their partnership with Intimidator to test the UTV market in the US before making a more substantial commitment. They will offer some more competition for companies like Kubota, John Deere, Polaris and even Can Am which has been targeting the farm/hunting market segment lately as well. The investment shows that the UTV market remains highly competitive, but companies still view it as a growth market.

Marc Cesare, Smallvehicleresource.com

Eicher Polaris Changes Multix Marketing Strategy

Eicher Polaris Multix

The Multix utility vehicle, the first offering from the Eicher-Polaris joint venture.

Eicher Polaris has made a significant change in the marketing strategy for their Multix multi-purpose utility vehicle. Launched in 2015, the Multix was designed to be versatile and transformable from moving goods to carrying the family to generating electricity with the X-Port feature.

Based on extensive market research the original marketing plan targeted entrepreneurs in rural areas and small towns. The entrepreneur could use the vehicle for business during the week, for family outings on the weekend and even provide electricity in areas where the electrical grid can be unreliable. However, the product has not taken off as management expected, although the potential market is deemed quite large. The company points to more conservative rural people not being as quick to adopt such an innovative product.

Therefore, Eicher Polaris is changing course and now focusing on more urban areas. To that end the company is expanding from 77 to 100 dealerships with most of the new openings in metro areas. The hope is that metro locations will provide more exposure for the Multix to a wider range of end users in the urban environment. Management provides examples of end users that can conduct “business on wheels” with the Multix like laundry operators who can use the X-Port for ironing and carpenters to power tools.

Learn more: thehindubusinessline.com

Comment: The versatility of the vehicle may make it a success in the end. In the metro areas, rather than fitting the vehicle to a particular type of user, many different type of users can adapt the Multix to their needs. In the end the Multix may be used for a number of different end use applications that the company never even considered when developing the vehicle. The key will be exposing the vehicle to as many different end users as possible, and helping them adapt the vehicle to their needs. The next step may be to develop a broader range of accessories to cater to specific applciations.

Marc Cesare, Smallvehicleresource.com

Polaris Industries Q2 2017 Earnings Results

RZR XP 4 Turbo EPS

RZR sales showed improvement in the quarter compared to the prior year results hurt by recall issues.

Polaris Industries recently announced their quarterly earnings results for the second quarter of the 2017 fiscal year. The quarter ended June 30, 2017. Management reported second quarter sales of $1,364.9 million, up 21% from second quarter 2016. Net income for the quarter was $62.0 million compared to $71.2 the prior year, and included some one-time expenses.

The following are some of the highlights of the earnings call related to small, task-oriented vehicles:

  • ORV sales increased 6% for the quarter
  • North American ORV unit retail sales for the second quarter of 2017 were down low-single digits percent from the 2016 second quarter as UTV sales increased low single digits but ATVs sale declined high single digits in a weak ATV market
  • Polaris ATVs lost market share in a heavy promotional environment
  • RZR retail turned positive while Ranger retail was flat for the quarter in a highly competitive segment with significant promotional activity
  • The General UTV product line has been good and the segment offers good opportunities according to management
  • Agriculture markets remain weak while oil markets are improving
  • Global Adjacent Markets segment sales increased 7% driven by the Work & Transportation group with good performances from Aixam quadricycles and Goupil light utility vehicles
  • Management expects Global Adjacent Market segment to increase mid-single digits percent for the year
  • Side-by-sides are expected to drive the improved guidance for the ORV/Snowmobile segment, which is now expected to see flat sales year-over-year

Learn more:  Seekingalpha.com (Earnings call transcript)