BRP Reports Quarterly Earnings – FY2018 Q3

Can Am Defender Max

The Can Am Defender Max and the Defender line as a whole helped drive sales.

Maverick X3 X RS Turbo R

The Maverick X3 X RS Turbo R and other X# models have helped drive sales as well.

BRP reported third quarter earnings for fiscal year 2018 of $1,241million ($C), a 15% increase from last year. Sales were driven by their Year-Round Products division which includes side-by-sides and Seasonal Products division which includes snowmobiles. For the quarter, Year-Round Products revenue increased $77 million or 20.1% to $460.9 million mainly on higher volume of Maverick X3 and the newly launched Maverick Trail.

The following are highlights of the earnings call related to the side-by-side market.

  • Side-by-side retail increased low 30% compared to an industry up high single digits
  • Launched the new 50″ wide Maverick Trail marking entry into the trail segment
  • Announced investment to increase their manufacturing capabilities in Mexico in response to ongoing strong demand for Defender and X3 models
  • North America side-by-side industry up low teen percent for the first third of the model year
  • Can-Am’s international side-by-side retail sales were up 80% for the quarter and the Defender and Maverick MAX models grew over 100% in markets like Mexico, China and Europe
  • The management stated that they did not follow some of their competitors who were aggressive with promotions in the quarter
  • The Defender line continues to make inroads into the farm and rural markets
  • Commander sales are flat to low single digit growth and the company has lost market share in that segment but gained share in the overall market
  • The management believes that better and more feature rich products across the industry are helping to drive replacement of older vehicles

Learn more:  Finance.yahoo.com (Earnings call transcript)

This marks another strong quarter for BRP as they continue to gain market share in the side-by-side market. Management expects to continue to follow their plan of adding new models every six months until 2020. The overall market appears to remain steady and strong with solid growth.

Marc Cesare, Smallvehicleresource.com

Can-Am Expands Maverick X3 Lineup with 5 New Models

Maverick X3 X mr Turbo R

The new, mud-specific Can-Am Maverick X3 X mr Turbo R.

Maverick X3 900 HO

The new Maverick X3 900 HO features a 90 hp engine and an entry level price point.

Can-Am announced five new Maverick X3 models as the company continues to build out their side-by-side offerings with steady and high paced product development. The five new models include:

  1. The all new Maverick X3 900 HO targeting an entry level price point with a 90 hp machine featuring 18″ of front and rear suspension travel and premium FOX 2.5 Podium Piggyback shocks. MSRP $17,999
  2. Mud specific, top-of-the-line, 172-hp Maverick X3 X mr Turbo R featuring fully lockable, on-the-fly Smart-Lok front differential optimized with multiple driving modes for superb handling and traction in the mud. MSRP $25,999
  3. Lower priced Maverick X3 X mr Turbo with a 120 hp engine and 64″ rather than 72″ width, but keeps many of the same features including the Smart-Lok technology. MSRP $22,699
  4. The 2018 Maverick X3 X rs Turbo R adds Smart-Lok technology which features 2×4, 4×4 Front Differential lock and both TRAIL ACTIV and TRAIL modes. MSRP $26,899
  5. The 2018 Maverick X3 MAX X rs Turbo R also adds Smart-Lok technology. MSRP $29,399

Learn more:  BRP.com

Cat Introduces Utility Vehicles

Caterpillar CUV102D

The new Cat CUV102D from Caterpillar which partnered with Textron Specialized Vehicles to produce their UTV line.

Caterpillar Cat CUV82

The gas powered Cat CUV82 is the other model in the new product line.

Last month Caterpillar announced that they were partnering with Textron Specialized Vehicles to produce a line of Cat branded utility vehicles. This month two Cat utility vehicles and their specs have been revealed. The CUV82 is a gas powered model and the CUV102D is a diesel powered model.

The CUV82 has a 50 hp, three cylinder engine and a top speed of 45 mph, but can be restricted to 25 mph. The CUV 102D features a 25 hp, 3-cylinder diesel with a top speed of 25 mph. Clearly work vehicles, the CUV82 and CUV102D each have a 1,000 lb. capacity steel cargo bed and a 2,000 lb. towing capacity. The vehicles are designed for all day comfort with ample elbow and legroom and an eye towards reduced vibration and noise. Other key features common to both models include:

  • CVT
  • 2WD/4WD/4WD Lock drive system
  • 10.5″ of ground clearance
  • 25″ tires on steel wheels
  • Four wheel independent suspension with A-Arms front and rear and a front sway bar
  • Dual piston disc brakes
  • Halogen headlights and LED tail lights
  • Electric power assist steering
  • Seating for two
  • ROPS
  • Pre-wiring for accessories
  • Digital instrument gauge
  • Horn

There are already a fair number of accessories available for the vehicles including various bumpers, guards, windshields, roofs, full doors and some lighting options. For work related tasks a front winch, snow plow and electro-hydraulic power dump bed are available.

A quick check of the SVR vehicle database puts these vehicles in the same class as Can Am Defender models, the Cushman Hauler 4×4 Diesel, the Cub Cadet Volunteer and Intimidator Classic models. Learn more: Cat.com

 

Textron Recalls Arctic Cat Wildcat UTVs

2017 Arctic Cat Wildcat Trail SE

The 2017 Arctic Cat Wildcat Trail SE is being recalled due to a winch issue.

2017 Arctic Cat wildcat Sport SE

The 2017 Arctic Cat Wildcat Sport SE is being recalled as well.

Textron Specialized Vehicles recently announced the recall of approximately 300 model year 2017 Arctic Cat Wildcat Trail SE and Wildcat Sport SE utility vehicles as well as approximately 3,000 winch accessory kits sold for 2014 to 2017 Wildcat Trail and Wildcat Sport UTVs. The winch solenoid can overheat and pose a fire hazard. Owners should stop using the vehicles and contact Arctic Cat to schedule a free repair. Arctic Cat can be contacted at 800-279-6851 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.arcticcat.com and then click on Product Recall for more information.

This is a small recall but unique in that it is more a recall of the winch accessory than the vehicle themselves as the recalled winches outnumber the recalled vehicles 10 to 1.

The following are the recall details from the Consumer Product Safety Commission

Name of product:  Arctic Cat ROVs with winches

Hazard:  The winch solenoid located under the operator seat can overheat, posing a fire hazard.

Remedy:  Repair

Recall date: November 16, 2017

Recall number:  18-037
Recall Details

Description:  This recall involves all 2017 Arctic Cat Wildcat Trail SE (Special Edition) and Wildcat Sport SE  ROVs with winch solenoids installed as original equipment and winch accessory kits sold separately for use on 2014 through 2017Arctic Cat Wildcat Sport and Wildcat Trail ROVs.  The ROVs have four wheels, side-by-side seating for two people, and have a black chassis. “Wildcat Trail” or “Wildcat Sport” is printed on each side of the vehicle. In addition, Special Edition ROVs have “SE” printed on each side.

Remedy:  Consumers should immediately stop using the recalled ROVs and contact Arctic Cat to schedule a free repair. Arctic Cat is contacting all known purchasers directly.

Incidents/Injuries:  The firm has received 49 reports of winch solenoid failure, with five resulting in fires. No injuries have been reported.

Sold At:  Arctic Cat dealers nationwide from February 2017 through August 2017 for about $17,000 for the ROVs with the winch accessory kits installed. The winch accessory kits were also sold separately from December 2013 through August 2017 for between $200 and $600.

Manufacturer(s):  Arctic Cat Inc., of Thief River Falls, Minn., a subsidiary of Textron Specialized Vehicles, of Augusta, Ga.

Manufactured In:  United States

Units:  About 300 ROVs and 3,000 winch accessory kits (In addition, 124 were sold in Canada)

Learn more:  CPSC.gov

Will Electric UTVs Disrupt the Market?

Nikola Zero

A prototype Nikola Zero electric UTV from Nikola Motor on test in Utah.  Photo Credit:  Nikola Motor

Nikola Zero

A shot of the Nikola Zero prototype’s underbelly while rock climbing.  Photo Credit:  Nikola Motor

Fred Lambert of Electrek.co, a news site that focuses on electric vehicles along with solar and wind power, was part of a small group of people that recently had a chance to experience the prototype Nikola Zero electric powered UTV in the challenging terrain around St. George, UT. His experience indicates that the Nikola Zero is not just vaporware with some outstanding specs but an actual UTV moving towards production. More importantly, Lambert’s experience with the Nikola Zero points to the possibility of electric UTVs significantly disrupting the market.

Before further discussing market disruption, lets take a look at the Nikola Zero test drive. The exact specs for the prototype were not provided but Nikola Motor stated that it is fairly close to a production version. Missing from the prototype are body panels. The prototype appeared to meet the the original spec sheet, which promised 555 hp and 4,900 ft-lbs of torque along with 20″ of suspension travel and 14.5″ of ground clearance. The prototype weighed in at around 3,500 lbs, featured 35″ tires, and was outfitted with a 107 kWh battery pack as opposed to the planned high end option of 125 kWh. For comparison, either size provides the UTV with a bigger battery pack than the maximum 100 kWh pack for a Tesla. The prototype’s display screen at the beginning of the test day indicated a 153 mile range at a 92% charge level.

Some highlights from Lambert’s take on the test drive:

  • Roomy 4-passenger vehicle even in the rear seats
  • Top-speed reached was 57 mph limited by terrain but company notes 80 mph is possible
  • Torque of four electric motors and low center of gravity made climbing even up 50% inclines seem effortless
    • One 50% grade was tackled from a standstill where as gas-powered UTVs needed a running start
    • A rock climbing spot was easily conquered by the Nikola Zero while a Can Am UTV and crew were stymied
    • In another difficult spot a Yamaha was easily passed
  • Greatly reduced ride noise compared to a gas UTV
  • Two hours of driving and 1,500 ft. of elevation gain used about one-third of the battery capacity

The company remarked that they are using LG and Samsung batteries in a patented battery pack architecture. They are planning on producing a few hundred units in 2018 and a few thousand in 2019 with a MSRP in the $35,000 range for the 75 kWh battery pack option and $55,000 for the 125 kWh battery pack option. The production version is expected to be launched in December, 2017.

What does this test drive say about how electric UTVs can disrupt the market. One area is performance, especially in the recreational end of the market. The amount of torque and responsiveness of an electric UTV would be very difficult for gas powered vehicles to match. Having motors at each wheel is another advantage as is the lower center of gravity. A gas powered UTV simply cannot be designed this way. Even for the utility segment, while the capability for high speeds would be considered undesirable by many employers, the performance features applied to heavy duty work applications would be welcome.

Performance based disruption is directly tied to expertise in engine design and development. The major UTV manufacturers have invested enormous amounts of money and resources into developing their own engine technology to create more powerful and lighter gas engines as they have engaged in horsepower and torque battles. Electric UTVs have the potential to make that expertise obsolete and demand a focus on batteries, battery pack design and management, and electric motors instead.

Another area of potential disruption, that may be undersold at this point, is the relatively low noise level of electric UTVs. While many riders enjoy the sound of a roaring engine and maybe even consider it integral to the off-road experience, the lower noise levels may prove quite appealing during long hours of riding. The ability to more easily carry on conversations could increase the social aspects of riding. Quieter electric UTVs could potentially open up more areas for riding where noise is a primary land use concern. Again this will be an area that gas powered UTVs will have a hard time competing.

Another potential area of disruption is vehicle reliability. While the chassis, suspension system and many other parts will still be needed for electric UTVs, the electric powertrain eliminates a lot of moving parts and other systems associated with gas engines. A quick perusal of recent UTV recalls indicates that a significant portion of them are related to the gas engine or ancillary system. There is also less maintenance involved with electric powertrains. On the other hand, battery packs will have to demonstrate their reliability.

At this point, a major impediment to this disruptive technology is price. As the anticipated pricing of the Nikola Zero demonstrates, electric UTVs are very expensive machines relative to the current market. A lot of that pricing is tied to the battery pack. Unless battery pricing decreases significantly an electric UTV like the Nikola Zero will only be a niche product targeting the high performance end of the market, not dissimilar to what the original Tesla Roadster was. On the other hand, battery pricing has been dropping significantly, so more affordable but relatively high performance UTVs may not be that far away.

Learn more:  Electrek.co, Nikolamotor.com

Marc Cesare, SmallVehicleResource.com

Textron Off Road Reveals Havoc X Crossover UTV

Textron Off Road Havoc X

The new Havoc X from Textron Off Road.

The new crossover Havoc X at play.

Signaling an aggressive approach to the side-by-side market since acquiring Arctic Cat, Textron Off Road revealed their new Havoc X crossover utility vehicle. The new model is likely the start of new product line targeting the market between pure recreational vehicles like their Wildcat models and the more work oriented vehicles under the Prowler name.

The Havoc X has an abundance of high performance features for work and play. For starters there is Textron’s own 100 hp, 957cc, SOHC engine with EFI. The front and rear double A-arm suspension coupled with King 2.5″ piggyback reservoir shocks with 30-position compression adjustability provides 12.8″ of front suspension travel and 12.9″ of rear suspension travel. There are front and rear sway bars as well. The Havoc X also features 13″ of ground clearance and 28″ ITP Ultracross tires on 14″ aluminum wheels.

On the works side of things, the Havoc X has a 600 lb. capacity cargo tilt cargo bed, 2,000 lb. of towing capacity and 4,000 lb. Warn winch. Other key features include:

  • On-demand AWD with automatic locking overrunning clutch front differential
  • CVT
  • 67 ft.-lbs. of torque
  • Electronic Power Steering
  • 4-wheel hydraulic disc brakes
  • Steel front bumper
  • Full doors
  • Two-tone bucket seats
  • Extended cab storage
  • LED headlights and accent lights
  • Backlit LCD discplay
  • USB port
  • Tilt Steering

The Havoc X comes in Dynamic Grey and will be available at Textron Off Road dealers in December. The MSRP starts at $17,299.  Learn more:  Textronoffroad.com ;  Preview video

Based on the specs the Havoc X looks like a pretty impressive vehicle with a lot of solid features you would expect in a high end vehicle. The horsepower is slightly less than what some had predicted from a reveal of an early prototype around May, but still impressive.

The Havoc X is clearly taking aim at the Polaris General product line. This new entry is yet another sign of how competitive the side-by-side market is. The competition is providing consumers with a wide range of vehicle choices across many market segments and over a range of price points. While many of the high performance vehicles for both work and play are pricey, they also come packed with many features and extensive capabilities and the high level of market competition is likely to keep pricing down.

Marc Cesare, Smallvehicleresource.com

Polaris Recalls General UTVs

2016 Polaris General 1000

The 2016 Polaris General 1000 is being recalled.

2017 Polaris General 4 1000

This 4-seat 2017 Polaris General 4 1000 is being recalled as well.

Polaris announced the recall of model year 2016 and 2017 General two and four seat side-by-sides. The steering wheel shaft can shift and detach while in use, resulting in a loss of control and crash hazard. Approximately 19,000 units are involved in the recall. Consumers should stop using the vehicles and contact Polaris for a free repair.

This is another large recall for Polaris and a different mechanical issue as well. In addition, the recall pertains to their General crossover line that has been selling well since its introduction. The previous large recalls were for their Ranger and RZR products. Given the model years involved, these vehicles were likely built before the company instituted new processes and added more people to improve vehicle quality and track safety issues faster. Assuming the changes are effective, another year or two may be needed before the company completely works through any legacy quality issues across their extensive product lineup.

The following recall information is from the Consumer Product Safety Commission.

Name of product:  Polaris General side-by-side recreational off-highway vehicles (ROVs)

Hazard:  The steering wheel shaft can shift and detach while in use, resulting in a loss of control and crash hazard.

Recall date:  October 30, 2017

Recall number:  18-018

Consumer Contact:  Polaris at 800-765-2747 from 7 a.m. to 7 p.m. CT Monday through Friday or online at www.polaris.com and click on “Off Road Safety Recalls” for more information. In addition, consumers can check vehicle identification numbers (VIN) on the “Product Safety Recalls” page to see if your vehicle is included in any recalls.

Recall Details

Description:  This recall involves model year 2016 and 2017 Polaris General 2- and 4-seat side-by-side recreational off-highway vehicles. The vehicles were sold in black, blue, camouflage, orange, red, silver and white and have a cargo box on the back. “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 ROVs and contact Polaris to schedule a free repair. Polaris is contacting all known purchasers directly.

Incidents/Injuries:  Polaris has received five reports of the steering shaft separating and one report of a broken hand injury.

Sold At:  Polaris dealers nationwide from December 2015 through September 2015 for between $16,000 and $21,000.

Manufacturer(s):  Polaris Industries Inc., of Medina, Minn.

Manufactured In:  U.S. and Mexico

Units:  About 19,000

Textron Recalls Arctic Cat Wildcat Trail & Sport UTVs

2014 Arctic Cat Wildcat Trail

This 2014 Arctic Cat Wildcat Trail is part of the recall.

Textron Specialized Vehicles, which acquired Arctic Cat earlier this year, has announced the recall of model year 2014 to 2017 Arctic Cat Wildcat Trail side-by-sides and model year 2015 to 2017 Arctic Cat Wildcat Sport side-by-sides. Heat from the vehicle’s exhaust can melt the plastic panels behind the operator and passenger seats and pose a fire hazard. The recall involves approximately 14,100 units in the US, 5,300 in Canada and 100 in Mexico of the two seat side-by-sides. Consumers should stop using the vehicles and contact Arctic Cat to schedule a free repair.

This is a large recall compared to what we usually see in the market, which is typically several thousand and less frequently more than 10,000 vehicles. Textron only recently acquired Arctic Cat and is still integrating the business into their Textron Specialized Vehicles division. They are keeping the Arctic Cat name for the Wildcat products under their newly formed Textron Off Road brand. Management is probably not thrilled with this unanticipated and added expense related to the acquisition.

The following are the recall details from the Consumer Product Safety Commission.

Name of product:  Arctic Cat recreational off-highway vehicles (ROVs)
Hazard:  Heat from the exhaust can melt the plastic panels behind the operator and passenger seat, posing a fire hazard.
Recall date:  October 27, 2017
Recall number:  18-017
Consumer Contact:  Arctic Cat at 800-279-6851 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.arcticcat.com and click on Product Recall for more information.

 

Recall Details

Description:  This recall involves all model year 2014 through 2017 Wildcat Trail and 2015 through 2017 Wildcat Sport models of Arctic Cat ROVs. The recalled vehicles were sold in multiple colors, have four wheels and side-by-side seating for two people. “Wildcat Trail” or “Wildcat Sport” is printed on each side of the vehicle.

Remedy:  Consumers should immediately stop using the recalled ROVs and contact Arctic Cat to schedule a free repair. Arctic Cat is contacting all known purchasers directly. If you need assistance locating an authorized dealer to conduct this repair, contact Arctic Cat.

Incidents/Injuries:  The firm has received 444 reports of the plastic panels melting, with five resulting in fires. No injuries have been reported.

Sold At:  Arctic Cat dealers nationwide from December 2013 through August 2017 for between $10,500 and $19,500.

Manufacturer(s):  Arctic Cat Inc., of Thief River Falls, Minn., a subsidiary of Textron Specialized Vehicles, of Augusta, Ga.

Manufactured In:  U.S.

Units:  About 14,100 (In addition, 5,300 were sold in Canada and 100 in Mexico)

Learn more:  CPSC.gov

Polaris Introduces RZR XP 4 Turbo DYNAMIX Edition

2018 Polaris RZR XP 4 Turbo DYNAMIX

The new 2018 RZR XP 4 Turbo DYNAMIX Edition from Polaris.

Polaris has introduced their new four passenger RZR XP 4 Turbo DYNAMIX Edition, which features the intelligent RZR DYNAMIX Active Suspension that adjusts individual shocks on-the-fly based on near continuous monitoring of key ride inputs. The new model builds out their DYNAMIX lineup introduced earlier this year for model year 2018.

The RZR XP 4 Turbo DYNAMIX Edition includes a RIDE COMMAND 7” display with rear camera, and an all-new, 900-watt charging system that improves battery charging and allows for additional accessory electrical loads. The display provides information on the suspension control system including compression dampening, selected mode, g-force, pedal position, steering angle, brake status and diagnostics.

The DYNAMIX system is designed to deliver a high level of ride comfort while still providing a high level of driving performance. The rider chooses from one of three styles of riding and the system makes adjustments within parameters for that riding style. Riders can choose from:

  • Comfort:  Designed for cruising around and eliminating the small chatter.
  • Sport:   Blends performance and comfort for ultimate high-speed handling.
  • Firm:  Cranks all four shocks to max stiffness for the firmest suspension in the industry for the most severe terrain.

Other key features and specs of the RZR XP 4 Turbo DYNAMIX Edition include:

  • 168 hp, ProStar Turbocharged 925cc engine with EFI
  • FOX 2.5 PODIUM Live Valve shocks with Bottom-Out Control
  • 16″/18″ of front/rear suspension travel
  • High Performance True On-Demand AWD/2WD
  • Electronic power steering with integrated steering angle sensor
  • 13.5″ of ground clearance
  • 64″ wide
  • 29″ Maxxis Bighorn tires on aluminum wheels
  • Bowed 1/4 doors
  • LED headlights and taillights

The RZR XP 4 Turbo DYNAMIX Edition comes in Black Pearl and will be available in dealerships in early December with a $28,499 US MSRP. Learn more:  Polarisindustries.com

Textron Q3 2017 Earnings Report

Textron Off Road Wildcat X LTD

The 2018 Wildcat X LTD now under the Textron Off Road brand rather than Arctic Cat.

Textron reported third quarter revenues of $3.5 billion, up 7.2% from the third quarter 2016, while profit decreased $15 million for the quarter to $295 million. “Growth in the third quarter was the result of strong commercial demand at Bell, increased deliveries at Textron Systems and higher revenues at Industrial due to the acquisition of Arctic Cat,” said Textron Chairman and CEO Scott C. Donnelly.

Textron has folded Arctic Cat into their Specialized Vehicles division which also includes E-Z-GO, Cushman and other brands. They recently merged their Stampede, Bad Boy Off Road and Arctic Cat lines under the Textron Off Road brand. This includes a pared down lineup of previous Arctic Cat models and the introduction of Bad Boy electric vehicles under the Prowler model name. The following are highlights from the earnings call that relate to STOV vehicles.

  • Management reports putting a lot of resources into the integration of Arctic Cat and the process is proceeding on plan
  • The plan involved moving dirt manufacturing to Thief River and centralizing engine manufacturing in St. Cloud, as well as, clearing dealer inventory and educating them about the new lineup of vehicles under the Textron Off Road brand
  • The launch of the lithium ion battery powered golf products has gone “extremely well”
  • Side-by-side sales year over year did well, in part from clearing out inventory
  • Management reports good uptake by dealers of non-Arctic Cat products such as the Stampede and the recently announced Prowler EVs

Learn more:  Seekingalpha.com (Earnings call transcript)