Honda Unveils Four-Seat Talon Models

 Honda Talon 1000X-4 sport side-by-side
The new four-seat Honda Talon 1000X-4.

Honda recently unveiled their two new four-seat side-by-sides, the Talon 1000X-4 and Talon 1000X-4 FOX Live Valve. The launch follows on the release of their two-seat models last year. The introduction of those side-by-sides marked Honda’s entry into the high end sport segment.

Talon 1000X-4

Not surprisingly, the Talon 1000X-4 is similar to the two-seat 1000X. Key features include:

  • 999cc four-valve Unicam® parallel-twin engine
  • Six-speed dual clutch transmission with full automatic, sport automatic and manual drive modes
  • Steering column mounted paddle shifters
  • FOX Podium Quick Switch 3 shocks
  • 14.6″/15.0″ of front/rear suspension travel
  • 4WD traction-aiding technology
  • Hill start assist
  • Electronic Brakeforce Distribution
  • Stadium style rear seating
  • Available in Metallic Grey/Pearl Red in Fall 2019
 Honda Talon 1000X-4 FOX Live Valve with sensor suspension
The Honda Talon 1000X-4 FOX Live Valve features a sensor driven suspension.

Talon 1000X-4 FOX Live Valve

The Talon 1000X-4 FOX Live Valve is similar to the Talon 1000X-4 but features a different suspension system. The system relies on multiple sensors to make adjustments 16 times per second for an improved ride and handling.

  • 999cc four-valve Unicam® parallel-twin engine
  • Six-speed dual clutch transmission with full automatic, sport automatic and manual drive modes
  • Steering column mounted paddle shifters
  • FOX Podium Quick Switch 3 2.5 shocks front and rear
  • Multiple sensor based shock adjustment for Normal and Sport drive modes
  • 14.6″/15.0″ of front/rear suspension travel
  • Electronic Launch Mode
  • 4WD traction-aiding technology
  • Hill start assist
  • Electronic Brakeforce Distribution
  • Stadium style rear seating
  • Available in  Pearl Red/Metallic Grey or Metallic Grey/Metallic Blue in Fall 2019

Honda has not released an MSRP for either vehicle at the time of this post.

SVR’s Take

The expansion of Honda’s Talon product line is to be expected. They didn’t enter this market segment last year to just sell a couple of models. I wouldn’t be surprised to see the addition of a narrower side-by-side or possibly some special edition models in six months time or certainly by a year from now. In only a few years the segment went from Polaris, Can-Am and Arctic Cat battling for market share to Yamaha and more recently Honda joining the fray. As a result, consumers now have more models and technology innovations from which to choose. In addition, the competition should keep the pricing down and the value proposition high. Marc Cesare, Smallvehicleresource.com

BRP Quarterly Results Strong

2019 Can-Am Defender HD8 help drive BRP quarterly results
Models like the Can-Am Defender HD8 features which was upgraded for MY2019 helped drive BRP sales.

BRP Quarterly Results Overview

BRP reported another strong quarter with revenues increasing 17% year over year to $1,334 billion (CA). Year-Round Products segment sales drove the BRP quarterly results for the first quarter of their 2020 fiscal year. In addition, sales increased across US, Canadian and International markets. Management reported that the company’s retail growth outpaced or at least matched industry growth around the globe.

UTV Related Highlights

The following are some of the highlights from the BRP quarterly results as they relate to the UTV market.

  • Similar to other OEMs, BRP noted that snowbelt weather hindered retail sales early in the quarter but rebounded later
  • Weather delayed sales rather than being permanently lost
  • Side-by-side North American retail sales increased high single digits compared to mid-single digits for the industry
  • Retail sales could have been higher except for constrained Defender UTVs supply
  • Management reported strong promotional activity from competitors during the quarter but the environment is improving
  • Side-by-side retail sales for the season(~ 10 months) are up high teens %
  • Globally, BRP side-by-side average selling price is flat and up slightly for YTD and quarter respectively
  • Defender sales have been particularly strong and supply remains tight
  • Management reports taking the most side-by-side market share in the industry for the season in both utility and sport segments
  • Market share is up in Middle East and Asia-Pacific regions as well
  • Do to supplier locations, China related tariffs minimally affect costs
  • BRP is launching a new side-by-side platform in June
  • Increased production capacity will be online
  • Management increased their guidance for FY2020 results, predicting revenue to increase 9% to 13%
  • Guidance for Year-Round Products which includes side-by-sides is for a 14% to 19% increase

Learn more: Earnings call transcript (seekingalpha.com)

SVR’s Take

BRP continues to be the main challenger to Polaris in the side-by-side market. Between the two of them they control around 60% of the market. With both growing market share for the most part, many of the other manufacturers are likely suffering. The success of the Can-Am Defender line, particularly in agriculture markets, is likely hurting companies such as Kubota and John Deere.

Can Rungu e-Bike Threaten ATVs?

Rungu Juggernaut MDV Overland, an ATV substitute
The new Rungu Juggernaut MDV Overland is an e-bike positioned as an alternative to ATVs.

Rungu e-Bike Overview

The Rungu Juggernaut MDV Overland is a new three-wheeled e-bike designed for off-road use and as an alternative to ATVs. The e-bike can tow up to 300 lbs and has a 350 lb payload capacity. The drivetrain is a Bafang 1000 Mid Drive with a removable 52V 15 AH Li-ion battery. The dual battery option provides 34 miles of unassisted range. The MSRP is $5,499 but the standard model with one battery is $3,399.

Electrek Rungu e-Bike Review

Electrek.com posted a largely positive review. Some key takeaways from the review.

  • The bike handles a variety of difficult terrain well from soft sand to ruts to stony ground
  • Climbs obstacles very well
  • Performs much better than a two-wheeled fat tire e-bike and more like an ATV but weighs less than 100 lbs
  • Easy to learn how to ride
  • Braking power and three-wheel stability handled extremely steep downhills very well

SVR’s Take

The advent of lower cost lithium batteries and improved electric motors is ushering in a new era of mobility. While much of the focus has been on urban mobility, the Rungu e-bike is an example of the technology making inroads elsewhere. Will the Rungu make significant inroads into the ATV market? Probably not, but it may be able to establish a sizable niche. Producing at higher volume could reduce cost and they could become a formidable substitute. Another possibility is that the Rungu creates a whole new vehicle category.

From a strategic point of view, the Rungu symbolizes a larger threat to the STOV industry. The threat of an industry that may be too complacent and lack vision. As a whole, the industry has not shown great interest in new mobility concepts. although well positioned, STOV companies run the risk of ceding this opportunity to startups and entrants from other industries. Over time, these companies can leverage the manufacturing volume and brand awareness built in new mobility markets, to pursue traditional STOV markets. Is it that far fetched that a company might target urban mobility and then the golf fleet or gated community markets and then head off-road or on campus? Or that Rungu might develop more capable and less expensive e-bike alternatives to encroach further into off-road vehicle segments?

New Bobcat UTVs Announced

Diesel powered Bobcat UV34 utility vehicle
The new 2019 Bobcat UV34 utility vehicle features upgrades to the suspension, chassis and cabin.
Diesel powered Bobcat UV34XL utility vehicle
The new six passenger Bobcat UV34XL utility vehicle is diesel powered and features a number of upgrades.

Bobcat UTVs Overview

Bobcat has launched two new diesel powered UTVs for 2019 with a new chassis, improved suspension and high towing capacity. The UV34 and UV34XL feature a 23.5 hp, liquid cooled diesel engine that is Tier 4 emissions compliant. Towing capacity has been increased to 2,500 lbs. In addition, these models have new shocks and springs and stronger drive components. The UV34 seats two and the UV34XL seats six.

Key Specs

Other key specs shared by both models include:

  • Turf, 2WD or 4WD drive modes
  • 1,250 lb. capacity cargo box with manual dump or optional power dump
  • Independent rear suspension with sway bar
  • 11.7″ of ground clearance
  • 35 mph maximum speed or limited to 15 mph or 25 mph with optional speed kit
  • Larger controls and instrument gauges
  • New cab design for easy entry and exit
  • Flip-up seat storage
  • Tilt steering

The UV34 starts at $16,406 and the UV34XL starts at $17,886. There was no mention of when the vehicles would be available at local dealers. A search of several Bobcat dealer websites did not show the utility vehicles as available yet.

SVR’s Take

The new utility vehicles are basically an upgrade of Bobcat’s 3400 diesel model. Those models have been around for several years without any significant changes. Given the increased competition in the market, the 3400 is likely looking a little dated compared to newer competitive offerings. For example, Can-Am’s Defender line has made inroads in the farm segment in particular. In addition, market leader Polaris is frequently updating different parts of their Ranger lineup. The new UV34 and UV34XL feature pricing slightly higher than the 3400 models.

Arctic Cat Recalls Havoc UTVs

Arctic Cat Havoc
The Arctic Cat (previously Textron Off Road) Havoc is being recalled due to a front suspension arm issue.

Havoc Recall Overview

Arctic Cat is recalling approximately 1,700 Havoc UTVs. The upper front suspension arms can fail and create a crash hazard. The recall pertains to vehicles sold from January 2018 to April 2019. Owners should contact Arctic Cat to schedule a free repair. Previously, the vehicles were sold under the Textron Off Road brand. Subsequently, Textron brought back the Arctic Cat brand as the umbrella brand for their off-road products.

Havoc Recall Details

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

Hazard

The upper front suspension arms can fail, posing a crash hazard.

Remedy

Repair

Recall date

May 22, 2019

Units

About 1,700

Description

This recall involves all model year 2018 and 2019 Textron Havoc recreational off-highway vehicles manufactured by Arctic Cat. The two-seat vehicles come in four color combinations: charcoal metallic/bronze, green/black, red/black or white/black. The vehicles have Textron Off Road printed on each side of the hood and Havoc on each side of the rear cargo box. Remedy: 

Consumer Contact

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

Incidents/Injuries

Arctic Cat has received six reports of front suspension arm failures. No crashes or injuries have been reported.

Sold At

Textron Off Road and Arctic Cat dealers nationwide from January 2018 through April 2019 for between $13,800 and $17,000.

Manufacturer(s)

Arctic Cat Inc., of Thief River Falls, Minn., a subsidiary of Textron Specialized Vehicles, of Augusta, Ga.

Manufactured In

United States

Recall number

19-746

SVR’s Take

The recall size is relatively small but probably represents a relatively large portion of the Havoc sales for the time frame. This is one of the few times a recall related to suspension arms has been an issue. After trying to put the Arctic Brand under the Textron Off Road brand, Textron Specialized Vehicles has now moved to put everything off-road under the Arctic Cat brand. Probably the right move, Arctic Cat has a lot more brand equity and recognition in the off-road segment than the relatively new Textron Off Road. SVR maintains an ongoing list of recent STOV recalls.

Tropos Motors and Panasonic Partner

Able pickup CUV from Tropos Motors
The Able electric compact utility vehicle from Tropos Motors in a pickup configuration.
Tropos Motors Able XR CUV
The Tropos Motors Able XR model with a view of the lithium battery packs.

Panasonic is partnering with electric compact utility vehicle manufacturer Tropos Motors to improve vehicle performance. Tropos Motors manufacturers the Able and Able XR electric compact utility vehicles that are low speed and electric powered. The Able features a 72V system with a 13 hp motor and gel lead acid batteries for a 50 mile range. In contrast, the Able XR uses lithium batteries in a 96V system with a 13 hp motor and a range of up to 160 miles.

Compact Utility Vehicle Niche

The electric compact utility vehicle (CUV) is part of the “right-sizing” trend in commercial vehicles. Smaller than a full-size pickup but larger and more capable than a modified golf car, CUVs are designed to be the right tool for the job. Or, in many cases, multiple jobs. In particular, they are useful on college and corporate campuses and urban environments where their smaller size is an advantage and a high top speed is less critical. Like many CUVs, a user has the option of limiting the Able models top speed to 25 mph. Therefore, with the proper safety options, they can be classified as street legal low speed vehicles.

Tropos Motors Capable and Versatile

Tropos Motors Able CUV trades package
The Tropos Motors Able CUV with the trades bed package.

The Able lineup has 1,100 lbs of payload capacity for the street version and 2,000 lbs for the campus version. Similarly, the towing capacity is 2,000 lbs and 3,000 lbs. Clearly they are capable of hauling and towing for a wide range of applications. Like many CUVs the Able lineup is versatile with their Easy-Swap system of bed packages to perform a wide range of on campus tasks. The bed packages include a pickup style, boxed van for hauling cargo, trades/maintenance configuration for carrying tools, a special sweeper package and a trio of emergency services packages.

Green and Cost Efficient

By virtue of their electric powertrains, electric CUVs can help organizations meet their sustainability goals while limiting air and noise pollution on campus. These smaller vehicles usually have a lower cost of purchase. Furthermore, the electric drive train also produces a lower cost of operation.

SVR’s Take

Currently, Tropos Motors is a relatively small manufacturer but landing Panasonic as a partner is big deal. What could be an important factor in the growth of this niche is the decreasing cost of lithium batteries. Partnering with Panasonic gives Trompos Motors access to a high volume lithium battery manufacturer. The trade-off between the range, performance and reduced maintenance of lithium batteries and their higher costs is key. As the price comes down, a wider set of applications become possible and less frequent re-charging is needed. The latter may also translate into less charging infrastructure needed. Marc Cesare, Smallvehicleresource.com

Optimus Ride Expands Autonomous Shuttle Service

Optimus Ride autonomous vehicle
An Optimus Ride self-driving LSV based on a GEM e4.

New York & California Locations Added

Optimus Ride, a self-driving startup company with roots in MIT, will be expanding their autonomous shuttle service next quarter to New York and Northern California. In both cases the service will be operating in a more controlled environment than public roads. In New York, Optimus Ride will operate their shuttle service on private roads in the 300-acre Brooklyn Navy Yard. The private development features light and heavy manufacturing and is home to about 8,500 workers. In Fairfield, CA the autonomous shuttle service will be deployed at Paradise Valley Estates. The Estates are a private, 80-acre, retirement community.

Optimus Ride NEVs

Optimus Ride uses GEM e4 and e6 models for their vehicles which are LSVs and therefore limited to a 25 mph top speed. They were first deployed in Weymouth, MA by the Boston-based company. Last year another 15 cities in the state announced an agreement to serve as a test bed for the autonomous shuttle service. Learn more: Theverge.com

SVR’s Take

The use of NEVs in a controlled environment as a testbed for autonomous vehicles is not surprising. SVR has previously discussed the advantages of using LSVs in gated communities for self-driving technology. These environments are more controlled than public roads with a limited, clearly defined set of low speed roadways. In addition, the older populations who may not be able to or want to drive can potentially find the greatest value in the service. At the same time, the gated community offers a challenging environment for testing the technology. Similar to public roads, there is a mix of pedestrians, cyclists and vehicles, albeit on a smaller scale. The low-speed roadways offers a cost advantage as well, since an electric LSV costs far less than a highway capable EV.

Urban Mobility Vehicles

Arcimoto Fun Utility Vehicle - FUV
The electric powered Arcimoto Fun Utility Vehicle (FUV) is just coming to market.
Uniti One a new urban mobility vehicle concept
The Uniti One urban mobility vehicle designed in Sweden.

Urban Mobility Vehicles & Opportunity

My colleague Stephen Metzger has penned an article on the trend towards urban mobility. The big question he asks is whether the small, task-oriented vehicle industry will take advantage of this opportunity. As the golf car manufacturers have focused more on personal transportation vehicles (PTVs) and non-golf utility vehicles, urban mobility vehicles (UMV) would appear to be a natural progression. In addition, UTV manufacturers have some of the capabilities needed to compete in this space.

New Urban Mobility Vehicles

Currently, startups are aggressively pursuing the UMV opportunity. Uniti from Sweden, BARO from the UK and Arcimoto from the US are some of the companies at the forefront on new vehicles and concepts for urban mobility. However, established auto manufacturer Daimler Benz is one exception to the startups with their Smart for Two small vehicle. The electric version of the vehicle is a foundational platform upon which the company plans to build. The question is where are the STOV manufacturers. In short, they appear to be well positioned for the opportunity but will they pursue it?

Marc Cesare, Smallvehicleresource.com

Tariffs Affect STOV Market

Polaris 2019 RZR S4 1000 EPS
Tariffs have hit Polaris, the manufacturer of UTVs like the 2019 RZR S4 1000 EPS shown here, hard.

Tariffs Hit Polaris Hard

In a recent interview with CNBC Polaris CEO Scott Wine commented on the affects of the tariffs on the company. He stated that the increase to 25% would be “catastrophic”. The company previously estimated  that they would cost the company $40 million in the last fiscal year. At the 10% tariff level they were guiding towards an approximately $90 million hit for the current fiscal year. However, at the 25% level that would jump to $195 to $200 million. In addition to these China specific tariffs, other aluminum and steel tariffs hurt the company as well.

Polaris More Exposed

Polaris is in a particularly tough spot with the tariffs because of their supply chain relative to the other major UTV manufacturers. The major Japanese OEMs, Yamaha, Honda and Kawasaki, mainly source their imported parts from Japan and thus avoid the onerous China tariffs. Can-Am produces products in Canada and Mexico and therefore, are less exposed to the tariff regime as well. Polaris on the other hand sources more of their components from China.

Farmer Segment Exposure

UTV manufacturers exposed to the farm segment are likely to suffer as well. Farmers report lower commodity prices and higher equipment prices. The tariffs are increasing farm equipment prices in the range of 20% according to some farmers. Although this refers to large pieces of farming equipment, if farmers are not spending on these large pieces and trying to cut costs in general, they are likely forgoing UTV purchases as well. John Deere and Kubota are likely the most effected brands as this is a strong segment for them. However, Can-Am could possibly be feeling an impact in their Defender line and Polaris in their Ranger line.

Some Value Brands Vulnerable

In the past few years value brands have made inroads at the lower end of the price scale. Many of these companies are sourcing parts or vehicles from China. For example, CFMOTO is based in China. In addition, Cub Cadet UTVs are manufactured by Hisun in China. Given their value pricing approach, the tariffs are likely putting some pressure on these companies. If they have to raise their prices too much, they lose their value proposition in relation to the major brands in the market.

Urban Mobility Market for STOV OEMs

fuel cell powered urban mobility vehicle
Yamaha’s fuel cell powered urban mobility vehicle for a new ride sharing service.

Recent vehicle news from Asia spurred some thoughts on the opportunity urban mobility presents to small, task-oriented vehicle (STOV) manufacturers.

Urban Mobility Changing

Battery Swapping Autorickshaws

The first article reports on the use of battery swapping to power electric autorickshaws in India. Battery swapping removes the very expensive battery component from the upfront purchase price and reduces long term operating costs. In addition, the electric part moves toward a more climate friendly and less polluting transportation system.

The current thinking by some is that smaller two and three-wheeled vehicles provide the best economic case for battery swapping. In contrast, larger vehicles require larger batteries. This means more expensive and complicated swapping stations, and higher up front investment costs for the battery supplier. While this an India based example, the advent of e-scooters, e-bikes and startups offering three wheelers indicate market potential in the US.

Fuel Cell Powered Small Vehicle

This week Yamaha Motor announced the public testing of a prototype fuel cell vehicle for a vehicle sharing service. The vehicle looks like less than a typical automobile but more than a golf car. The technology advances new concepts in urban mobility as well as initiatives in Japan to promote hydrogen based fueling. Though the fuel cell provides greater range and less refueling needs, the more important part of this test for STOV OEMs is the vehicle form. The vehicle size and level of complexity should be a good fit for their capabilities.

Is Urban Mobility Too Small for Traditional Auto OEMs?

These transportation technologies represent a new opportunity for STOV manufacturers to leverage their existing manufacturing and technology expertise into new vehicle markets. The traditional automobile manufacturers are less likely to view these markets as an opportunity. Although, in the long term they could represent a threat to their dominance or at least reduce their addressable market. They are already pouring billions of dollars to enter the highway capable EV market. However, they must balance investment between highly profitable and traditionally popular ICE vehicles and lower margin and riskier EVs. Smaller, alternative energy vehicles are even farther down the list. In addition, their work force arguably did not join their companies to produce small, urban vehicles.

Urban Mobility Attracts Diverse Providers

Entrants in the urban mobility space include startups like Arcimoto and traditional small vehicle manufacturers serving Asian and to a lesser degree European markets. Startups have the advantage of creating purpose-built vehicles specifically for new mobility markets. However, they lack the manufacturing expertise, financial resources and distribution networks. Traditional foreign small vehicle manufacturers know their home markets, and have the distribution, financing and manufacturing assets. However, they do not have a strong presence in the US market.

Other potential entrants include the likes of bike sharing companies as well as Lyft and Uber that have moved into ride sharing with e-scooters and e-bikes. However, these company’s expertise is not in manufacturing. They provide the platform for people to access mobility. One can argue that the platform itself does not provide as a wide moat as the manufacturing and technology assets. The strengths and weaknesses of these potential providers and the dynamics of the urban mobility market suggest an opening for existing US STOV manufacturers.

Best Positioned US STOV Market Leaders

Among the current leading UTV, golf car and LSV manufacturers companies Polaris, Textron and Yamaha appear to be best positioned to pursue this new opportunity. Polaris owns Aixam, the leading European quadricycle brand as well as the GEM, Goupil and Taylor-Dunn electric vehicle brands. These brands provide them with electric vehicle technology as well as a range of distribution networks. On the other hand, the DNA and profit driver of Polaris is off-road motorsports. They may see relatively greater returns on investment in their traditional markets.

After the acquisition of Arctic Cat, Textron is similar to Polaris and now has an expansive small vehicle portfolio. Their DNA is more golf car and PTV, and therefore likely better suited towards urban mobility. However, the integration of Arctic Cat has been bumpy and they were slow to recognize the original UTV opportunity. As a piece of a larger conglomerate, their Textron Specialized Vehicle division may not be entrepreneurial enough or have the freedom to pursue this opportunity.

Yamaha has both off-road and golf car type offerings as well as e-bikes, but are not well coordinated. These businesses are in separate business units. In addition, their golf car portfolio has been emphasizing gas powered technology rather than electric technology. Yamaha’s existing mobility concept testing along with having one foot in the Asian market and another in the US should be an advantage. However, their slow re-entry into the UTV market after problems with the Rhino side-by-side speaks to a more cautious corporate approach.

The STOV OEMs appear to have many of the necessary requirements to pursue the urban mobility opportunity. The question remains whether they believe in the opportunity and if they are willing to take the risk.

Marc Cesare, Smallvehicleresource.com