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New Model Introductions Reveal Market Trends
Published: Author: Category: Marketing

     While the growth of the small, task-oriented vehicle market (STOV) may not be as strong as a few years ago, the proliferation of new model introductions since the beginning of the year indicates a competitive and still growing market. The STOV market includes utility vehicles (UTVs), sometimes referred to as side-by-sides, golf cars and LSVs. UTVs make up the largest share of the STOV market and not surprisingly that is where much of the action is. The UTV segment is also where much of the growth opportunity is as well.

     A review of over 25 brands and product lines including all of the major players in the UTV market, as well as smaller ones, shows that approximately 80 new models were launched since the end of 2015. These have included completely new entrants, product line extensions, special edition models customized for specific applications and product line upgrades.

     Despite significant growth in the UTV market for a number of years there are still underlying factors that can continue to drive sales. The versatility, off-road capability and efficiency of the vehicles continue to provide opportunity for a range of users to be more productive with the vehicles or just have fun. The ability to move people, tools, and material over varying terrain and quickly, creates a wide range of end use applications for the vehicles. UTVs can displace pick-ups or take a work crew off their feet and make them more mobile. Productivity is enhanced by the wide range of accessories available for both improving the versatility of the vehicles and customizing them to particular tasks or set of tasks. Customization also helps specialize vehicles for specific types of recreational riding such as dunes, mud or rocky trails.

     While a significant amount of ATV to UTV crossover has already occurred in the market, there is still potential for this trend to continue. ATVs have some advantages in terms of cost and smaller size, but the greater versatility, functionality, comfort and multi-passenger capabilities of UTVs create a great value proposition. The advent of narrower UTV models improves the proposition further.

     Another factor driving growth is the increasingly competitive nature of the market, which increases marketing expenditures and, more importantly, drives new product development. Combined these create more value for the customer. Increased value is manifesting in the marketplace as more promotional dollars to reduce pricing, as well as, more or new features and functionality for the same or only slightly higher pricing.

     A major factor in this large number of new model introductions has been the re-entry of established powersports brands into the market over the last several years. For example, Honda after being somewhat dormant after their Big Red UTVs pursued the market with their Pioneer line. Meanwhile Yamaha had built out the work oriented Viking line, the Wolverine crossover line and more recently attacked the pure recreational/sport segment with their YXZ line.

An analysis of recent model introductions illuminates important trends in the market.

  • OEMs continue to push the envelope in terms of vehicle horsepower. While common in the pure recreational segment, the new Ranger XP 1000 models from Polaris, new XUV590i crossover models from John Deere, a new engine developed by CFMoto is evidence of a similar trend in other segments as well.
  • Lower priced ‘value’ models are being introduced. Cub Cadet expanded their Challenger line with a crew version and added two models in the $6,000 to $6,500 price range.   Sunright International introduced their Big Horn UTVs in the $4,200 to $4,700. Although at higher price points, more prominent brands added models that are value priced relative to the rest of their offerings. Kawasaki introduced the new Mule SX product line, Arctic Cat the Prowler 500 priced at $9,500 and Polaris the Ranger 500 at $9,000 and ACE 500 at $7,000.
  • The work oriented UTV segment is drawing the interest of manufacturers known for their strength in other segments. The major players in the recreational end of the UTV market continue to target the work utility segment. Can-Am added several models to their Defender line, Polaris added important new models to their Ranger line and expanded the crossover General line, and Arctic Cat added Prowler models. There has also been a stronger push by the golf car manufacturers into the utility segment as E-Z-GO introduced their Bad Boy Off-road UTVs, Club Car is targeting services at specific commercial segments and Garia is starting to market utility vehicles in the US and adding people mover models to their offering.
  • OEMs are creating more specialized vehicles for specific end use applications. This is particularly prevalent in the pure recreational market segment where special edition models for dune, mud or trail riding have been launched. In other segments vehicles with accessory packages including full cabs designed for work applications have been developed such as the Ranger Crew XP 1000 EPS Northstar HVAC Edition. ‘Hunting’ edition models are popular as well.
  • OEMs continue to develop partnerships to expand their distribution channels to reach market segments not fully served by their established dealer networks. Toro is re-branding two Arctic Cat HDX models under the Toro and Exmark brands that should give Arctic Cat more exposure to the turf and groundskeeping segment while providing Toro with UTVs for customers outside their traditional turf and groundskeeping segment. Similarly, starting next year Yanmar, strong in the farming segment, is re-branding two Yamaha Viking models for their dealer network. Polaris had previously established similar partnerships with Ariens under the Gravely brand and with Bobcat.
  • The hunting market for electric UTVs has not developed beyond niche market size, spurring OEMs in this market to try to appeal to a wider audience. The maker of the HuntVe has developed the more general purpose Warhorse line of electric UTVs, and Hisun has launched the Sector E1, purposely designed for LSV speeds. Newcomer Torq Off-road Vehicles aims for both the hunting and recreational users. The market leader Bad Boy Buggies, a Textron company, has taken a different approach by trying to leverage their brand equity in the hunting space to enter the gas-powered UTV market.  Instead of targeting additional markets with electric UTVs, they folded their electric hunting vehicles into a new brand, Bad Boy Off-road, and launched the gas powered Stampede UTVs and a gas powered ATV to complement them.
  • New manufacturers and/or distributors continue to enter the market. Yanmar announced their entry planned for early 2017. At the PGA show Sun International, Torq Off-road Vehicles and Garia all had utility vehicles on display. The latter is now targeting the US market with their utility vehicles after previously launching the models in Europe. The War Horse line from Martex Global is another new brand targeting the UTV market.

Trends in the Rest of the STOV Market

     In the golf car segment of the STOV market there was relatively little product development action as the fleet golf car market continues to face a challenging environment with the number of golf courses continuing to decline, and similar or only slightly better trends for golf participation according to National Golf Foundation data. The exception is Yamaha Golf Car, which introduced new fleet models emphasizing how quiet their new gas-powered vehicles are. Corresponding personal transportation vehicles for the consumer market were introduced as well. The impetus for the new product development in a challenging market may be closely related to Yamaha’s reports of winning a significant number of golf course fleet accounts from E-Z-GO and Club Car over the last several years. Yamaha along with Club Car are also focusing on fleet management software.  Club Car also focused on building out services for commercial markets such as fleet management programs and model specific accessory packages for commercial applications. E-Z-GO updated their RXV models and added a new golf course hospitality vehicle.

     Luxury golf car manufacturer Garia has been one of the most active companies in the market introducing their utility vehicles to the US, adding two people movers and a Mercedes-Benz Style special edition model to their product lineup.  They are also targeting the US golf car fleet market.  However, instead of looking for courses to buy an entire fleet of luxury golf cars, they are pushing the concept of a fleet adding only two or three vehicles. These would be rented out at a higher rate to golfers looking for a luxury golf car experience.

     In the LSV space GEM remains the leading brand and in early 2016 started selling their completely re-engineered and re-designed product line. Their sales remain strongly tilted towards the commercial segment, particularly college campuses, but the redesigned line should help them in the personal use segment as well.While the growth of the small, task-oriented vehicle market (STOV) may not be as strong as a few years ago, the proliferation of new model introductions since the beginning of the year indicates a competitive and still growing market. The STOV market includes utility vehicles (UTVs), sometimes referred to as side-by-sides, golf cars and LSVs. UTVs make up the largest share of the STOV market and not surprisingly that is where much of the action is. The UTV segment is also where much of the growth opportunity is as well.