The new RZR XP 1000 is the fastest-selling side-by-side in Polaris history.
Polaris reported another strong quarter of results for the Q4 2013 driven by off-road vehicles, motorcycles, PG&A and international sales. Overall, sales for the quarter were $1.08 billion, up 20% from the prior year period. Net income for the fourth quarter was up 23% to $108.7 million, yielding record earnings per share of $1.56, up 26%. Full year 2013 sales increased 18% to just under $3.8 billion. International and adjacent market businesses each grew 29% and 79%, respectively. Full year net income from continuing operations was $381 million. Some of the highlights of earnings report and conference call with a focus on small, task-oriented vehicles include:
Off-Road Vehicles division which includes UTVs and ATVs increased in revenue in Q4 16% driven by strength in side-by-sides, particularly RZRs, Defense and Commercial.
For calendar year 2013, ORV completed another strong year with revenue up 13%.
Polaris gained market share again in the fourth quarter and for the full year 2013
Polaris is #1 in the North American ATV industry, with 2013 retail sales up mid-single digits in an industry that was essentially flat.
All Model Year ’14 new product introductions are selling extremely well and seasonality is now approaching.
The new RZR XP 1000 is the fastest-selling side-by-side in company history and the XP 4 is built on that RZR XP sales momentum.
Polaris ORV commercial revenues increased by over 120% in 2013.
Both Bobcat and Brutus retail improved notably in the fourth quarter but management still sees significant missed opportunities in Polaris in dealer execution and customer development opportunities. To drive improvement in 2014, they added a dedicated infield commercial sales force to assist dealers in landing local B2B and B2G business and also initiated a partnership with Ariens.
The Defense division, which sells mostly off-road ATVs and UTVs has momentum with a strong 4th quarter and an ongoing winning streak for recent contracts.
Small vehicles, were up 25% to 30%, which includes a full year of Aixam acquisition.
PG&A sales also rose 33%. Growth came from every category, with Accessories up 30%, Parts up 24% and apparel up over 150%, led by an outstanding first year from KLIM.
2013 industry conditions remained tepid with ORV industry down upper single digits.
Polaris side-by-side retail sales growth moderated just a bit in the fourth quarter, but increased low double digits for 2013, outpacing the side-by-side industry which grew an estimated 10% for the year.
ORV is expected to grow in the high single-digits percentage range in 2014.
Management anticipates aggressive competition in the side-by-side market, with increased promotions possibly being more of a challenged than new products.
The new Sportsman ACE is expected to add incremental revenues with a small amount of cannibalization of existing ORV sales.
Management is very happy with how the numerous product introductions have been received in the market.
Comment: Polaris continues to churn out new models and in general execute very well. It will be interesting to see how well the Sportsman ACE will sell, to whom and whether or not it will create a new category of vehicles. Management’s comments indicate that the side-by-side market may be slowing a little in the coming year. This could create a more competitive environment in the market as the pie will be growing at a slower pace than in the past few years and manufacturers recently added new offerings to go after key segments.
A look at that the front wheel motors in a Kawasaki Teryx modfied by EVDrive with their Terra Torque Drive.
A programmable system with motors for each wheel, the EVDrive system can provide a UTV with great handling characteristics, including the ability to execute a zero radius turn.
EVDrive has demonstrated their Terra Torque Drive electric motor technology for use in off-road powersports vehicles. The electric 4-wheel, 4-motor torque vectoring technology was put into a stock 4-seat Kawasaki Teryx4. The UTV demonstrator uses four sealed liquid-cooled EVDrive EVD35 35kW/47hp peak drive sub-systems, de-tuned to ~30kW/hp each or delivering a total of ~160hp/120kW peak. At each motor shaft, ~66 ft-lbs (89 N·m) peak torque is delivered. As currently configured, 726 ft-lbs (984 N·m) peak torque is delivered which allows the vehicle to perform zero radius turns. This basically means the vehicle can spin in place. The demonstrator has a top speed of 45 mph which can be reached in 4 seconds with good traction. With software controlled motors on each wheel, the wheels can be programmed to independently turn at any speed or direction which allows for some great handling possibilities. Additional traction modes are planned including auto dynamic terrain type posi-traction control, variable inclination angle offset descent control, zero radius turns on incline, emergency 4-wheel panic braking/stop and boulder climbing. The system also has regenerative braking.
To modify the vehicle EVDrive removed the gas engine and AWD mechanical drivetrain and put in their 160hp (119 kW) peak total version of the Terra-Torque-Drive. According to Co-Founder and COO, Steve Tice ” Off-road UTVs are ideally suited to our torque vectoring technology where only single fixed speed reduction is required per motor-wheel to attain 55-75 mph top-speeds with the type of high RPM brushless motor technology we employ.” The company also has a single-cylinder, 20 hp range extender engine which can be added to the system. According to EVDrive the system with range extender allows for:
Highest efficiency 4wd drivetrain on any UTV today (least mechanical losses);
Dynamic torque vectoring modes both for high and low speed operation, e.g. industry unique “Zero Radius Turning” and high speed active torque vectoring allows for better and safer handling off-road;
Torque and power from -100 to +100% can be dynamically sent to any wheel, in either direction, in any combination, at any time.
Series hybrid with optimized internal combustion engine powered REX to allow for longer range matching or exceeding gas powered UTVs sold today.
120vac power from onboard battery pack, backed up with the REX for general utility use;
Lower cost to maintain and operate. Superior fuel economy, estimated average 50-100% better, and for short trips, no fuel may be needed at all. Plug-in to standard electric car chargers;
Superior straight-line and rough loose material, curvy trail acceleration;
Greater river depth traversal possible due to completely sealed liquid cooled e-motors/power electronics; and
Torque vectoring software platform allows new traction capabilities to be supported like “apps” without costly mechanical NRE expenses to the OEM; OEM can provide customers software updates for new capabilities.
Beauty shot of the new Sportsman ACE from Polaris.
The overhead view shows the rider cockpit and overall narrowness of the vehicle.
Polaris recently introduced the Sportsman ACE, an ATV/UTV hybrid vehicle that, if successful, could launch a whole new category of off-road vehicles. The Sportsman ACE is a single-passenger vehicle with a sit-in chassis. The design combines the small size, responsiveness and maneuverability of an ATV with the more comfortable rider position and safety features of a UTV. According to David Longren, vice president of Polaris’ Off-Road Division. “In creating the Sportsman ACE, we wanted to not only appeal to current off-road enthusiasts, but develop a vehicle that brings new customers to off-road recreation. We accomplished this by coupling an easy-to-use, nimble platform with a confident and secure ride that, together, provides drivers of all experience levels a new way to experience the outdoors.” Some of the key features of the vehicle include:
Trail-capable and easily-transportable 48 in. width
10.25 in/26.04 cm of ground clearance and 9.5 in/24.1 cm of rear travel
Comment: This is another example of why Polaris is the leader in this market. They continue to keep churning out new vehicles, whether slight variations of existing models to target sub-segments or improve performance in existing segments, or, as in the case Sportsman ACE, to break entirely new ground. From a marketing standpoint this vehicle could be very versatile in attracting a range of buyers. At such a low price point compared to UTVs it can definitely attract the buyer with less money to spend or someone who wants to try out trail-riding but is maybe reluctant to spend the money on a more expensive UTV. Thus the Sportsman ACE provides an entry point to new customers who can move into UTVs later.
It also offers riders who want access to narrow trails a more affordable alternative to some of the newer, narrower and pricey high-performance UTVs. While some areas of the country have wide-open trails, in many areas only vehicles the size of an ATV can access trails. Potentially existing UTV owners could also purchase a Sportsman ACE as a second vehicle for riding narrower trails or for solo riding. Another potential market could be farmers and other commercial users of ATVs looking for more comfort, safety and payload in a similarly priced vehicle. In the long term, this vehicle could become a replacement for the ATV category, offering a more comfortable and safer alternative to existing ATVs designs.
A low speed electric powered utility truck produced by Viridian Motors.
Green Automotive Company (GAC) has acquired nearly 22% of Viridian Motors, a Virginia based maker of low speed electric utility trucks. GAC previously acquired the UK-based Land Rover-conversion company Liberty. GAC has three divisions: Liberty Electric Car which designs, engineers and manufacturers EV technologies, Newport Coachworks which builds shuttle buses powered by a variety of fuels and Going Green Ltd. which sells and sevices a variety of electric vehicles. The Newport Coachworks division is launching an electric powered shuttle this year and Viridian Motors will be involved in the roll-out on the East-coast. Currently Viridian produces two electric utility trucks, the WR100 and WR200. Both have a top-speed of 25 mph with ranges of 90 and 75 miles respectively. Learn more: Autobloggreen
The new Special Edition Tactical Black Viking EPS 4×4 from Yamaha
Yamaha has introduced a new addition to their Viking side-by-side product line, the Special Edition Tactical Black Viking EPS 4×4. The new model has all of the features of Yamaha’s standard Viking SxS plus molded sun top, overfenders, mud flaps, an under-seat storage box, bed rail accessory mounts and exclusive black cast aluminum wheels. To refresh your memory some of the key features of the standard Viking include:
Three-person seating utilizing Yamaha’s exclusive pass-through bucket seating with a unique off-set center position.
A 686cc liquid-cooled 4-stroke, SOHC, single-cylinder, 4-valve fuel-injected engine
Yamaha’s three-way On-Command® system, featuring 2WD, 4WD and 4WD with differential lock, is a driver-controlled system with an automotive-type rotary dial selector.
Ultramatic™ CVT with dual speed gearing and an automatic centrifugal clutch.
Four wheel independent suspension
600 lb cargo bed capacity and 1,500 lb towing capacity.
Nearly 12 inches of ground clearance
The SE Tactical Black Viking 4×4 EPS will be available in the spring of 2014 with an MSRP of $13,749. Learn more: Yamaha.com
According to a recent report mini-truck sales have slowed in India in 2013. This segment includes vehicles with a payload of under one ton like the Tata Ace. Combined with pick-ups that fall under a gross vehicle weight of 3.5 tons, they make up what is referred to as the Small Commercial Vehicle market. This market had been growing quite well in recent years as a hub and spoke model of distribution has been widely implemented. The vehicles in this segment are often used in the last mile of this distribution scheme. However, analysts believe this market has become saturated in the larger metropolitan areas. Mini-truck sales have dipped below pick-up sales which also slowed toward the end of the year. Learn more: TheHindu.com
Comment: Polaris is making an effort to grow sales in the Indian market through a strategic partnership. While their focus appears to be more on the off-road vehicles and snowmobiles, they also starting to sell the GEM which in some configurations would be appropriate for this application.
The new heavy duty electric utility vehicle from Star EV
Star EV recently launched a new lineup of electric utility vehicles for commercial and industrial use. The U series HA 1 vehicles come in a number of configurations and feature cabs from Curtis Industries. The vehicles are available with a 48-volt electric drivetrain with a 5kW (6.7hp) DC motor or a 72-volt drivetrain with a 6.7kW (9hp) AC motor. The vehicles have a 2,200 lb cargo load capacity. Other key features include:
400 amp (DC) or 500 amp (AC) Curtis controller
4 wheel hydraulic brakes
Seating for 2
Fold-down bed with tailgate
Headlights, taillights, brake lights and turn signals
Horn, reverse beeper and parking brake
19.5 mph top speed or 20-25 mph with the LSV configuration
Heavy duty bed liner and full chassis undercoating
Available options include:
Battery filling system
LED roof mounted lights
Enclosed aluminum boxes
The rear cargo area can be customized with different types of beds and enclosures.
Comment: GEM and now Star EV have come out with new electric utility vehicles with a heavier payload. Both feature AC drive systems as well, while the GEM eM1400 does not offer an LSV version. For a new research report on the college market, I spoke with a fleet manager who was looking for an electric UTV with an increased payload. If his interview is any indicator, this market segment is looking to use these electric utility vehicles in more specific applications than just general maintenance and therefore require some more capabilities like higher payloads. In the college market at least, a LSV configuration is often a desired option. If manufacturers can produce electric utility vehicles that can perform and meet these new demands, it starts opening up even more market potential.
The new Cushman Hauler Pro with a 72-volt AC drivetrain.
Carryall 2 from Club Car
Faced with slow or no growth in their primary market, fleet golf cars, Club Car and E-Z-GO are pursuing higher growth opportunities in the commercial and consumer work UTV segments. To do this both companies have recently producing revamped product offerings. Club Car has come out with their new Carryall line of vehicles and E-Z-GO is attacking their market with the new Cushman Pro Hauler. The Pro Hauler uses a 72-volt AC drivetrain to provide longer runtime at golf courses and other maintenance environments. The whole Carryall line has been redesigned to appeal to a wide range of consumer and commercial customers. Learn more: The Augusta Chronicle
Polaris recently announced a strategic partnership with Ariens, a maker of outdoor power equipment. Ariens sells a variety of products under the Ariens, Gravely and other brands and is based in Wisconsin. The partnership will allow Polaris access to markets not as easily served through their network of powersports dealers. Under the partnership Polaris will be providing a “highly differentiated work vehicle” for the Gravely brand. The partnership is expected to create opportunities for some dealers for each of the companies. Learn more: Polaris.com
Comment: Growing revenue from adjacent markets, like small, task-oriented vehicles for commercial and work applications has been a long term goal for Polaris. They have already established a partnership with Bobcat and added the GEM line, which is primarily sold to commercial and institutional entities like colleges and municipalities. The challenge is that these markets require a more aggressive sales effort to get out and visit with potential buyers in-person as opposed to a powersports dealer that tries to generate interest and awareness and drive traffic through their door.
The Bobcat sales have developed slower than expected as the purchase cycle for commercial and institutional buyers is longer. I also think an issue with the Bobcat partnership is that Bobcat dealers might be more focused on selling their more expensive equipment offerings like skid steers. I have heard some doubts from GEM dealers that powersports dealers will not know how to sell the GEM into its traditional market. So I think this partnership with Ariens puts another iron in the fire as Polaris goes after the commercial and work segments. The Ariens partnership provides more exposure to work UTV markets and could produce some synergies with their expertise in snowblowers and mowers for the Polaris Brutus line of vehicles which take work attachments.