Polaris Reports Another Strong Quarter

2019 Polaris Ranger Crew XP 1000 EPS
The 2019 Polaris Ranger Crew XP 1000 EPS in Sunset Red Metallic is part of the Ranger product line that recently commemorated its 20th anniversary.

Polaris Q4 2018 Earnings Overview

Polaris reported another strong quarter and full year with 4th quarter sales of $1.6 billion, up 14% from last year. Full year sales topped $6.1 billion, up 12% from the prior year. The ORV/Snowmobile segment reported sales of $1.1 billion for the quarter, an increase of 7% year over year. The ORV portion declined 2% as the company had a tough comparable with the prior year’s quarter. On a negative note, management expects tariff and trade war costs to total between $110 to $120 million company wide for fiscal year 2019. They will hit the ORV and Motorcycle businesses the hardest. A significant portion of the Q&A on the call revolved around tariff and trade war costs. A summary of the earnings call highlights related to the STOV market follow.

Polaris Earnings Call Highlights

  • Polaris side-by-side retail sales increased mid single digits % while ATV retail sales decreased mid single digits %
  • Average selling price for the ORV segment increased by 7% but were partially offset by tariff, logistics, and commodity costs
  • Polaris gained market share in the side-by-side market for the quarter and the full year
  • Management believes they are gaining share from Japanese competitors and Arctic Cat, now owned by Textron
  • Global Adjacent Markets revenue increased 4% to $122 million on the strength of commercial, government and defense and Aixam businesses.
  • Polaris increased wholegood prices 3.5% for the ORV/Snowmobile segment at the start of 2019 to counter tariff and trade costs
  • Revenue for ORV/Snowmobile and Global Adjacent Markets segments are expected to increase mid-single digits % for fiscal year 2019
  • Management does not expect to enter into electric powered markets until there is large consumer demand. Their response pertained to motorcycles but appears to be their general philosophy.

Learn more: Earnings Call Transcript (seeking alpha.com)

Tracker & Textron Partner on UTVs/ATVs

The Tracker Off Road ATV & UTV model lineup

Partnership Overview

Tracker, a leading boat manufacturer, and Textron Specialized Vehicles are forming a partnership to produce UTVs and ATVs and sell them under the new Tracker Off Road brand. Tracker is part of the White River Marine Group that includes Tracker, Triton, and Ranger boats, as well as Bass Pro Shop and Cabela’s. The Tracker Off Road vehicles will be sold through select Ranger, Triton, and Tracker, and other independent dealers, as well as at Bass Pro Shops and Cabela’s locations. They will be built at the Thief River Falls, Minnesota plant that produces Arctic Cat vehicles.

Tracker Off Road Product Lineup

The Tracker Off Road lineup includes four ATVs and four UTVs. The ATV line includes entry level youth and adult models and two more models with more features and capabilities. This lineup should be able to target a wide swath of the ATV market. The UTV lineup includes a personal transportation vehicle (PTV), and three models currently sold under the Prowler nameplate: the Prowler EV, Prowler Pro and Prowler Pro Crew. The corporate presentation also mentioned the potential of selling the Wildcat XX and even snowmobiles through the same distribution network.

Learn more: Businesswire.com

SVR’s Take

The Textron Tracker partnership continues the trend in the UTV market of brands expanding beyond their traditional distribution networks. Typically, an established UTV brand partners with a traditionally non-UTV brand. They either re-brand existing models or develop similar but unique models to sell through the partner brand’s distribution network. Previously, major UTV brands have used this approach to gain access to farm equipment and outdoor power equipment distribution networks. In this case, Textron is tapping into marine distribution and outdoor apparel networks. In a similar vein, Polaris and Can-Am have recently acquired boating manufacturers. Primarily these acquisitions diversify their powersports portfolio. However, it would not be surprising to see them sell a select range of off-road vehicles through these marine networks. If the dealers believe they can make a profit and there is no territorial conflict with the traditional powersports dealers then these networks expand their geographic footprint and reach.

Marc Cesare, Smallvehicleresource.com

Polaris Launches New PRO XD UTV Line

Polaris PRO XD 2000D

Polaris PRO XD 2000D is part of a new work-oriented UTV line.

Polaris PRO XD 400D AWD utility Vehicle

The new PRO XD 4000D AWD from Polaris Commercial is the lines crew version.

PRO XD Overview

Last month Polaris Commercial launched their new PRO XD utility vehicle line. The line includes the PRO XD 2000D 2WD, the PROXD 2000D 4WD and the PRO XD 4000D 4WD. All three vehicles are purpose-built for work and are powered by a 898cc, 3-cylinder Kubota diesel engine. Polaris is engineered features to target three key areas they believe are necessary for work vehicles:  durability, serviceability and safety.

Durability

For durability they designed a rigid chassis, a rust and dent resistant composite bed that can fit a full-size pallet, a heavy-duty sealed driveline, a reinforced seat with heavy-duty seat material and 26″ job site tires.

Serviceability

To improve serviceability Polaris:

  • Extended the maintenance intervals to 200 hours
  • Improved vehicle fault alarms for low oil, parking brake engagement, belt burn and engine overheat to identify problems earlier
  • Designed side access for dipstick and air filter servicing
  • Use front air intake for cleaner air and longer filter life
  • Integrated Polaris Pulse Connector to simplify accessory installation and improve uplift possibilities

Safety

For safety the PRO XD vehicles include:

  • Orange seat belts and vehicle decals to improve work site visibility
  • Backup alarm, horn and parking brake
  • System where the vehicle starts only in Park with brake enabled
  • Wide foot wells for easier entry and egress
  • Speed limited to 26 mph or as low was 15 mph
  • Engine Braking System for hill descending
  • Fully sealed cab

Features and Specs

Common features and specs across all three vehicles include:

  • 24.5 hp, 898cc, 3-cylinder Kubota diesel engine
  • Engine Braking System
  • Automatic PVT transmission
  • 1,250 lb. cargo box
  • 2,500 lb. towing capacity
  • 11″ of ground clearance
  • 9″ of front and rear suspension travel
  • 26″ Duro DI-2042 Power Grip tires
  • 4-wheel hydraulic brakes
  • 55W low/ 60W high, LED Tail
  • Kevlar backed seat material
  • Tilt steering
  • Digital Gauge

The PRO XD 2000D AWD adds an all-wheel drive Ultra Turf drive system while he PRO XD 4000D AWD is the same but seats four and comes equipped with electronic power steering. The PRO XD 2000D 2WD starts at $14,599 the 2000D AWD at $16,099 and the 4000D AWD at $17,749. In addition, Polaris offers two standard accessories packages. The Work Package adds a poly roof, poly windshield, strobe light, air filter restriction gauge and wide angle rearview mirror. The Work Package with Cab System includes the same package plus doors, engine block heater, heater defrost kit and rear panel.

SVR’s Take:

The new PRO XD vehicles are an improved version of basic work UTVs and replace the lower priced and lesser equipped Brutus vehicles. Last year Polaris Commercial discontinued the lower priced and less featured vehicles of their Brutus line, another work oriented UTV line, due to lagging sales, . In contrast, they kept Brutus HD PTO Deluxe, a fully equipped vehicle with a starting price of $24,099 which apparently sold well compared to the lesser equipped vehicles. According to earnings calls, the Brutus line did not quite live up to high sales expectations. In part because in the commercial UTV segment there is a different type of customer, sales process and sales cycle. Typically, a powersports dealer network does not serve this segment well.

Also, the Brutus uses a Kohler diesel engine and the PRO XD vehicles a Kubota. In the past Polaris did not have as much success developing their own diesel engines. They eventually switched to outside vendors. This makes sense since their volume of diesel powered UTVs is small compared to their overall sales. Development resources are better used elsewhere, and their diesel vehicles are improved by using an outside vendor specializing in developing high quality diesel engines.

Honda Launches Talon 1000R/X Sport UTVs

Honda Talon 1000

The Talon 1000R and 1000X are Honda’s entry into the sport UTV segment.

Honda Talon 1000X

The Honda Talon 1000X is designed for tighter and rockier trails.

Honda Talon 1000R

The Honda Talon 1000R is for dunes and more wide open riding.

Honda Launches Talon Sport UTVs

Honda recently introduced the Talon 1000X and Talon 1000R UTVs. They are Honda’s long awaited entry into the sport UTV market. The Talon 1000X targets tighter wooded trails and rockier environments while the Talon 1000R aims for more wide-open dune riding. The models should be available in early 2019. I’ve seen sources mention January while others mentioned March. The first date might be production and the second could be arrival at the dealerships. In any case, the following specs are common to both versions.

  • 104-hp, 999cc, twin-cylinder, 4-stroke, SOHC engine
  • Six-speed dual clutch transmission
  • Power steering
  • Hill Start Assist
  • Hydraulic brakes with two 250mm discs;
  • Electronic Brakeforce Distribution (EBD) system
  • LED High/Low Headlights
  • About 1,500 lbs in weight
  • Tire sizes:  28x9x15; 28x11x15
  • Bolstered seats with harness pass throughs
  • Roof is standard

See the Talon in action:  Official Honda Talon 1000 video

Talon Model Differences

The two models have different widths, wheelbases, slightly different suspension systems with different suspension travel. a slight difference in suspension travel and different color options. The following specs are some of the key differences between the vehicles.

Pricing Update

In early January 2019 Honda announced pricing for the vehicles.

Talon 1000R — MSRP: $20,999; Availability: Spring 2019

Talon 1000X — MSRP: $19,999; Availability: Spring 2019

Talon 1000x Key Specs

  • Double-wishbone front suspension, Fox Podium 2.0 shocks with Quick Switch 3
  • 3 Link rear suspension with high-clearance trailing arm, Fox Podium 2.0 shocks with Quick Switch 3
  • Front/Rear suspension travel:  14.5″/15″
  • Red/Gray with red suspension accents
  • Gray/Blue with silver suspension accents
  • Width:  64.0
  • Wheelbase:  87.6

Talon 1000R Key Specs

  • Double-wishbone front suspension, Fox Podium 2.5 shocks with Quick Switch 3
  • 4+ Link trailing-arm rear suspension with toe link, Fox Podium 2.5 shocks with Quick Switch 3
  • Front/Rear suspension travel:  17.7″/20.1″
  • Red with red suspension accents
  • Green/Silver with silver suspension accents
  • Width:  68.4
  • Wheelbase:  92.7

Initial Reviews

The following are some initial reviews and analysis of the Talon from around the industry.

UTVonDemand

First Look Review (video). Provides fairly in-depth analysis of the engine and drive train and highlights many of the key features that the reviewer likes.

  • 999cc twin cylinder SOHC engine should provide good low-end torque
  • 270 degree firing order makes it run like a single cylinder
  • Based on Pioneer engine but bigger throttle bodies, bigger injectors, different heads and more flow
  • Claiming 104 hp but may have higher torque than other UTVs with more hp
  • Rubber mounted engine to dampen vibration
  • 3 Driving Modes:  Sport, Normal and Manual with paddle shifters
  • Hill Assist – Push dash button and it holds the vehicle from rolling back for 3 seconds
  • “Big deal” for this vehicle is the transmission has a dual high and low range so you can  go rock crawling without changing the gear set out
  • Claim extra strong driveshaft and axles
  • i-4WD system with electronic braking control to transfer power up front from a spinning wheel to the wheel with traction
  • 68.4 1000R  Front/rear wheel travel 17.7/20.1
  • 64″ 1000X Front/rear wheel travel 14.6/15.1- this may be a little short compared to competitors
  • Can use 30″ tires – 28″ are standard and custom designed by Maxxis
  • 15″ rims for bigger brakes
  • 1000X has 3 link system podium 2.0
  • 1000R has a 4 link for added strength and Podium 2.5;
  • More suspension tuning with 3 mode QS3 compression on both models
  • Power steering sport tuned for feedback and speed sensitive
  • Standard roof is designed with rain gutters and air vents for trailering backwards
  • Good seat sliders
  • Holders in doors and t-bar has nice latching system
  • Seats have pass throughs for harnesses
  • Pedals laid out for two or one foot driving and passenger has different places to place feet at speed or more relaxed driving
  • Cupholders with rubber for holding in drinks
  • Good cargo capacity and design
  • 1 yr warranty

Hondaprokevin

Provides specs in a nice layout and plenty of pictures

UTV Action

General overview of key specs and some commentary.

  • Probably will competitively priced around $20,000
  • Trail riders anywhere will like it but sand riders may wait for turbo option

UTV Driver

They provide a top ten feature list for the vehicles

  • Bolstered seats with harness pass throughs and harness bar
  • 15″ rims for larger brakes and 30″ tires
  • Sizable cargo bed with tie-downs
  • Dual Clutch six-speed transmission
  • Paddle shifting
  • FOX shocks
  • Hill Start Assist
  • 4-link trailing arm system on 1000R
  • Engine
  • Strong, durable build

SVR’s Take

Honda’s entry into the sport market has long been rumored so this isn’t much of a surprise. People may not have expected  two different models, but targeting the main sport sub-segments makes sense. The initial reactions are very positive and Honda’s reputation for quality and performance have riders expecting a good vehicle.

Increased Competition

Not surprisingly, Honda’s entry makes the sport end of the market now quite crowded. As a result, the competitive landscape raises the question of how Kawasaki will respond. They have been focusing more on the utility side of the market with their recent model introductions and have not made any really big changes with their more recreationally oriented Teryx product line. I would suspect they might come out with a new high-end sport vehicle in the next year and probably as a separate product line.

Cub Cadet Recalls Challenger 400 4×4

Cub Cadet Challenger 400 4x4

The Cub Cadet Challenger 400 4×4 is being recalled due to possible cracks in the fuel tank neck.

Challenger 400 4×4 Recall Overview

Cub Cadet is recalling their 2018 Challenger 400 4×4 utility vehicle because the fuel tank neck can crack, potentially leak fuel and create a fire hazard. The recall involves approximately 350 vehicles. Consumers should immediately stop using the recalled utility vehicles, store outside and contact an authorized Cub Cadet dealer or customer service representative to arrange for a free repair.

This is a very small recall but for a smaller manufacturer like Cub Cadet it represents a larger percentage of their overall vehicle sales. The Challenger 400 4×4 was launched earlier this year.  SVR tracks recalls of golf cars, PTVs, LSVs and utility vehicles. The following detailed recall information is from the Consumer Product Safety Commission.

Challenger 400 4×4 Recall Details

Name of product:  Cub Cadet Challenger 400 utility vehicles
Hazard:  The fuel tank’s neck can crack and cause fuel to leak, posing a fire hazard.
Remedy:  Repair
Recall date:  October 24, 2018
Units:  About 350
Consumer Contact:  Cub Cadet toll-free at 888-848-6038 from 9 a.m. to 7 p.m. ET Monday through Friday, 9 a.m. to 6 p.m. ET Saturday and Sunday, or online  www.cubcadet.com and click on “Product Recalls” for more information.

Recall Details

Description:  This recall involves Cub Cadet model year 2018 Challenger 400 4×4 utility vehicles with model number 37BV3BHK010. The yellow utility vehicles have four-wheel drive with side-by-side seating for two people. “Challenger 400” and “4x4” is printed on both sides of the utility vehicle’s bed. “Cub Cadet” is printed on both sides of the front fender. The recalled vehicles were manufactured between May 2018 and August 2018. The model number and manufacture date in MM/YYYY format can be found on a label located on the seat frame under driver’s seat.
Remedy:  Consumers should immediately stop using the recalled utility vehicles, store outside and contact an authorized Cub Cadet dealer or customer service representative to arrange for a free repair. Cub Cadet is contacting all known purchasers directly.
Incidents/Injuries:  None
Sold At:  Independent Cub Cadet dealers nationwide from May 2018 through August 2018 for about $7,500.
Manufacturer(s):  Cub Cadet, of Cleveland, Ohio
Manufactured In:  United States
Recall number:  19-707

Honda Recalls 56,000 Pioneer 1000 UTVs

Honda Pioneer 1000

2016 – 2018 Honda Pioneer 1000 three passenger model being recalled.

Honda Pioneer 1000-5

The 2016-2018 five passenger model is being recalled as well.

Honda Pioneer VIN

Location of the VIN on the Honda Pioneer models.

Pioneer 1000 Recall Overview

Honda has announced a massive recall of their Pioneer 1000 utility vehicles because an incorrectly installed throttle body poses a fire and burn hazard. The recall involves all model year 2016 and 2017 vehicles, as well as some 2018 vehicles. The three passenger and five passenger models are included in this action. Owners should stop using the recalled vehicles immediately and contact their local Honda Powersports dealer to schedule a free inspection and repair. No injuries have been reported related to this recall.

This is a very large recall. Earlier this year Honda issued a recall for most of these same vehicles because of a muffler issue. SVR tracks ongoing vehicle recalls for UTVs, golf cars and LSVs.

Detailed Recall Information

The following information is from the Consumer Products Safety Commission.

Name of product:  Recreational off-highway vehicles (ROVs)
Hazard:  An incorrectly installed throttle body can ignite, posing fire and burn hazards to consumers.
Remedy:  Repair
Recall date:  November 8, 2018
Units:  About 56,000
Consumer Contact:  American Honda toll-free at 866-784-1870 from 8:30 a.m. to 4:30 p.m. PT Monday through Friday or online at http://powersports.honda.com/and click on “Recall Information” at the bottom of the page for more information.

Recall Details

Description:  This recall involves all model year 2016 through 2017, and some model year 2018 Honda Pioneer 1000 side-by-side vehicles. The recalled vehicles were sold in various colors including: red, blue, green, gray and yellow. The name “HONDA” is on the front, sides and the rear of the vehicle. The model name Pioneer 1000 is printed on a label located on both sides of the vehicle, near the rear.  The serial number (VIN #) is stamped in the frame at the left rear, below the tilt-up bed/seat. The following model numbers and serial number ranges are being recalled:

 

MY Model VIN Start
2016 Pioneer 1000 3P

(SXS10M3*)

1HFVE04**G4000001 — 1HFVE04**G4008403
2016 Pioneer 1000 5P

(SXS10M5*)

1HFVE04**G4000001 — 1HFVE04**G4010507
2017 Pioneer 1000 3P

(SXS10M3*)

1HFVE04**H4100001 — 1HFVE04**H4102101
2017 Pioneer 1000 5P

(SXS10M5*)

1HFVE04**H4100001 — 1HFVE04**H4103000
2018 Pioneer 1000 3P

(SXS10M3*)

1HFVE04**J4200001 — 1HFVE04**J4200720
2018 Pioneer 1000 5P

(SXS10M5*)

1HFVE04**J4200001 — 1HFVE04**J4200780

Variable character

Remedy:  Consumers should immediately stop using the recalled ROVs and contact an authorized Honda Powersports dealer to schedule an appointment for a free inspection and repair. Honda is contacting all known purchasers directly.
Incidents/Injuries:  The firm has received 5 reports of throttle body igniting. No injuries have been reported.
Sold At:  Authorized Honda Powersports dealers nationwide from August 2015 through August 2018 for between $14,000 and $22,000.
Manufacturer(s):  Honda of South Carolina Mfg. Inc. (HSC), of Timmonsville, S.C.
Distributor(s):  American Honda Motor Company Inc., of Torrance, Calif.
Manufactured In:  United States
Recall number:  19-714

Tariff Questions Dominate Polaris Earnings Call

Polaris 2019 Ranger XP 1000 EPS 20th anniversary

The 2019 Ranger XP 1000 EPS 20th Anniversary edition helped drive sales despite tariff concerns.

Financial Results Overview

Tariff questions dominated the Polaris Industries earnings call to discuss their Q3 financial results for fiscal year 2018. The manufacturer of the RZR, Ranger and General side-by-sides reported adjusted revenue of $1,653 million, an increase of 12% from $1,480 million from third quarter 2017. Net income increased 21% from $98 million to $118 million. (Financial figures are compared to Q3 2017 unless noted)

STOV Segments Perform Solidly

Overall ORV/Snow segment revenue increased 3% from $1,007 million to $1,036 million. Lower snowmobile revenue was more than offset by a 12% increase in ORV revenue. ORV includes UTVs and ATVs. North American (NA) retail sales, driven by side-by-side sales, increased 1% in the quarter against a tough comparable. In comparison, management estimated that industry wide NA ORV sales improved low single digits for the quarter. Polaris side-by-side market share for the quarter remained the same.

The average selling price of ORVs overall increased 5%. Management reports that the initial launch of the 2019 model year was successful with good response from consumers and dealers. In particular, the new Ranger XP 1000 variants drove sales. Furthermore, the company’s inventory management system, RFM, is producing results with the best side-by-side delivery performance to date. In addition, lower promotional costs accompanied the stronger sales. Comments on individual markets indicated that the oil and gas customer segment improved while agriculture decreased some.

Global Adjacent Markets Gain

The Global Adjacent Markets (GAM) segment made solid gains as well. Sales increased 5% from $92 to $98 million. This segment includes vehicle sales to commercial, government and defense clients in addition to Aixam quadricycle sales in Europe. In addition, the GAM segment includes vehicles like Ranger and Brutus UTVs, military RZRs, GEM electric vehicles, Taylor-Dunn industrial vehicles and Goupil electric vehicles based in France. Management reported solid sales for  Goupil vehicles and strong orders from fire and police departments, and other government agencies.

ORV and GAM Drive International Growth

Sales to international markets jumped 10% with a strong showing from the ORV/Snow segment, up 9%, and the GAM segment, up 6%. Looking at sales by region, the Europe and Middle East drove overall international sales while Latin America increased only slightly and the Asia Pacific region decreased.

Full Year Guidance Improves

Polaris increased their guidance for the ORV/Snow segment. They now expect a low double digit increase in sales.The GAM segment should increase sales by low double digits, which is unchanged from previous guidance.

Tariff Impacts

Tariff impacts raised expenses by $8 million for the quarter and are expected to total $40 million for the year. The renegotiated NAFTA deal, the USMCA, is expected to have a neutral effect. However, the 301 tariffs, especially the upcoming List 3 tariffs could have more severe repercussions. Currently, the company is dealing with List 1 and List 2 tariff impacts. Polaris is at a disadvantage related to 301 List tariffs because their main competitors produce their vehicles in Mexico or assemble them in the US using Japanese parts. Therefore, these companies are not subject to the same tariffs.

Tariff Mitigation Plans

Management laid out a three pronged approach to mitigating the potential List 301 tariffs. First, they will try to negotiate with their suppliers to share some of the increased costs. Second, they may increase prices. Thirdly, they hope to lobby the current administration to obtain an exemption from the tariffs. Polaris argues that the tariffs are primarily hurting them, but they are the only US based manufacturer among the major players in the market. Furthermore, the company has been increasing their US based manufacturing. At this time, Polaris is not providing any specific quantitative guidance for tariff impacts for 2019.

Other Future Factors

For the powersports market in general, management expects that there will be a need to increase pricing to offset inflation, tariff impacts and increasing commodity and logistics costs. Furthermore, management stated, “As the industry leader, we’re not afraid to lead on price.”

The newly launched Factory Choice program, which gives the customers and dealers an opportunity to make differentiated vehicles from the factory and has been popular, gives Polaris optimism. The program should help drive sales in the future.

The dealer inventory profiles produced under the RFM program this year for side-by-sides significantly improved product availability. The increased availability bolstered sales, raising similar expectations moving forward.

Learn more:  Polaris Earnings Call Transcript (Seekingalpha.com)

SVR’s Take

This was another solid quarter for Polaris. The sales increases for side-by-sides were not gangbusters at first glance, but they are being compared to a really strong third quarter in 2017. The new 2019 vehicle lineup should drive sales more fully in the fourth quarter. The GAM segment is slowly growing into a significant business and could become a $500 billion business in about two years. On a cautionary note, the tariff impacts could slow progress for Polaris, especially in contrast to fast growing and Canadian based Can-Am. Increased pricing could potentially hurt sales, although as a premium brand Polaris can pass on some pricing. The other alternative is that they will take hit to their margins and generate less income.

 

 

Textron Off Road Struggles with Arctic Cat

Textron Off Road Wildcat XX

Textron Off Road’s Wildcat XX. Wildcat models were previously sold under the Arctic Cat brand.

Textron 2018 Q3 Earnings Results

Textron, Inc recently reported fiscal year 2018 third quarter earnings. They point to a struggling Arctic Cat brand which was acquired in early 2017. The company embedded the Arctic Cat brand under their new Textron Off Road brand in their Specialized Vehicle business, which is part of their Industrial segment. Specialized Vehicles also includes E-Z-GO golf cars, Cushman utility vehicles, towing tugs among other small, task-oriented vehicles. Management reported that poor Specialized Vehicle results hurt the Industrial segment that in turn reduced overall quarterly performance for the company.

Weak Performance but Faith in the Product

The Q&A part of the earnings call pointed to problems with products formerly sold under the Arctic Cat brand. CEO Scott Donnelly remarked that  “…the most fundamental challenge in the business is around particularly the dirt side, the consumer side of that business and that’s the area that where we need the most work”. Furthermore he noted that,

” Industrial, segment profit was breakeven primarily due to unfavorable operating performance in specialized vehicles. Specialized vehicles has undergone significant change over the past two years, as we have expanded the product portfolio. While we’ve seen increasing revenue in the segment, we haven’t seen the planned level of growth or do the operating levers necessary to support the expected returns.”

Nevertheless, management remained positive about future performance and confident of the products they are putting on the market. Donnelly further stated,

“We’ve got great feedback from customers, the performance side we don’t have a product problem I mean we have still gaps which again as I said we’re working on it as we go forward but I think the progress on what the product is and how the product is performing we’re very pleased with.”

The management expects better performance in the fourth quarter.

 

Sales Channel Issues

Additional management comments indicated other issues in the sales channel may be limiting performance. Management noted the need to manage the channel but that some dealers are doing very well. Overall the retail sell through did not meet expectations. Furthermore, management allocated more funds to product discount programs to reduce inventory. In addition, management expressed a desire to improve the sales tools that help customers get to the product.

Pricing Changes Reflect Sales Issues

The pricing changes across the Textron Off-Road vehicle lineup from 2018 to 2019 reflects the poorer than expected retail performance. Management reduced prices for nearly every model, slashing prices for the Wildcat side-by-sides the most. Wildcat price cuts ranged from $500 to $2,500 with most at least $1,000. In contrast, many other manufacturers maintained pricing or slightly increased pricing by around $200 in most cases.

Textron Earnings Call (Seekingalpha.com)

SVR’s Take:

If management likes the product and some dealers are doing well, it sounds like it may possibly be a dealer issue. Either dealers are in the wrong location or they are not performing well. The management’s comments about getting customers to the product raise additional potential issues.

“I think in general how we manage that channel is something that frankly we just haven’t done as well as we should have. And our sales tools and how easy we make it for perspective customers to figure our product, have access to the dealers, have a natural way to help customers move to our product is just something we didn’t do well.”

This could cover a lot of ground from advertising to website performance to in-store marketing material to how dealership personnel interact with customers from first contact to sale.

Marc Cesare, SVR

Polaris 2019 Ranger Crew XP 1000 Reviews

Polaris 2019 Ranger Crew XP 1000 EPS

The 2019 Ranger Crew XP 1000 EPS in Sunset Red Metallic from Polaris.

2019 Ranger Crew XP 1000 Overview

The six-passenger  2019 Ranger Crew XP 1000 from Polaris features a number of improvements compared to the 2018 version including more power, ground clearance, towing capacity and larger tires. The Sage Green base model starts at $16,299 and there are four models in the lineup including a Premium model with automotive paint, a 20th Anniversary Limited Edition with special paint scheme and stitched seats, the Northstar Edition with a full HVAC cab and a High Lifter Edition for mud riding. Some of the key features and specs of the 2019 Ranger Crew XP 1000 include:

  • 82 hp engine
  • High Performance On-Demand True AWD/2WD/VersaTrac Turf Mode
  • Engine braking system
  • Electronic power steering
  • 27″ Maxxis tires on aluminum Black Xcelerator 2.0 wheels
  • 11″ of front and rear suspension travel
  • 13″ of ground clearance
  • 1,000 lbs capacity cargo bed
  • 2,500 lbs towing capacity
  • 4-Wheel Hydraulic Disc with Dual-Bore Front Calipers
  • Under seat storage and pass through for longer items
  • New front fascia design

Reviews Summary

These reviews focus on the base and Premium model with some owner added options as noted. In general, the reviews are very positive. Owners like the power, ride and storage of this model. The only common issue is that the response of the vehicle on initial take-off can be “jerky”. The first two videos discuss some of the key features of the vehicles and are from dealers. Actual owners with time on the machines made the latter two and are more informative.

Vehicle Walk Arounds

Video walk around of the 2019 Ranger Crew XP 1000 by Family PowerSports in Lubbock, TX provides a nice overview of key changes from 2018 model. These changes include:

  • New front fascia
  • Increase ground clearance from 11″ to 13″
  • 26″ stock tires to 27″ 6-ply tires
  • Increased horsepower from 80 to 82
  • Increase towing capacity from 2,000 lbs to 2,500 lbs
  • Widened front and rear entries for easier ingress and egress
  • 25% thicker seats for more comfort
  • Cleaner dash design
  • Added storage under passenger seat

Video walk around of the 2019 Ranger Crew XP 1000 by Leone Polaris in Peru, IL. This video provides more footage of vehicle specifics but is also a little harder sell. The presenter noted similar changes over the 2018 model as in the video above and added the following:

  • Best crew model on the market
  • 25% tighter turning radius
  • Highest grade tires and wheels
  • Tailgate quality similar to a good pickup truck

Owner Reviews

Video review from owner with the 2019 Ranger Crew XP 1000 EPS Premium

  • First-time UTV owner reviewing after about 800 miles and 75 hours using the vehicle
  • Use the UTV when camping and added front full glass windshield, rear plexiglass window and roof from Polaris and a bluetooth audio system from a third party provider
  • Owner is from South Dakota and used vehicle on gravel roads and farmland
  • Compared to base model this one has different gauge and dashboard along with automotive paint
  • Would have bought full glass rear window instead of plexiglass which probably won’t last that long
  • Love the ride:  “Drives like a Cadillac” and seats are “top notch”
  • Takes bumps and river bottoms really well in front and rear seats
  • Love the look of the front which looks like a pickup truck
  • Crew size is good for family with three boys
  • Lot of room for storage
  • Like the power. Have easily towed trailer with pavers.
  • Don’t like the dust in the cabin even with half windshield we tried from neighbor; Better without windshield but our area has a lot of bugs
  • No grab handle for the driver seat which makes it difficult for older person to enter the vehicle
  • Accessories are extremely expensive e.g. doors would cost $5,000 more
  • Machine is long. You will need a 14 ft. trailer.
  • Commenters responding to the video talked about having a “jerky” initial takeoff. Others suggested this lessened with breaking in of the belt and using lower gear at start.
  • Another commenter noted the “amazing power” of this model

First impression video review by a new owner of the 2019 Ranger Crew XP 1000 in Sage Green which is the base model. The owner drove the vehicle around a duck hunting camp in Alabama checking and pulling game cameras.

  • First time UTV and Polaris owner with a couple of hours of use on the vehicle
  • Added front and rear glass. The Plexiglas option when scratched can be difficult to see through in low light.
  • Sage Model doesn’t have adjustable driver seat and just a digital gauge instead of additional analog gauges.
  • Like the large amount of storage
  • Might put in 1/4 doors up front in contrast to the standard side nets
  • Reached 52 mph top speed
  • Driving in work mode seems to have a smoother throttle response in contrast to the other modes
  • 2″ higher ground clearance is good for use in the water
  • Very happy with it

 

ODES Industries Launches 2019 UTV Lineup

ODES Industries 2019 Dominator X2 LT Zeus

The ODES Industries 2019 Dominator X2 LT Zeus features a touchscreen and LED lighting.

ODES Industries, self-described as a value UTV brand, recently announced their 2019 UTV lineup as they push for even more growth. According to company statements ODEs Industries has been growing for the last several years including a doubling of sales from 2016 to 2017. The 2019 lineup includes 10 models including the new XForce 2 and XForce 4 models which feature an enclosed cab. Probably, these models are aimed at heavy duty work applications in challenging weather environments. Prices range across the lineup from $9,795 up to $23,495.

ODES Industries Dominator Models

The Dominator line includes the following models:

  • The entry level Dominator X2 ST Model V1 – MSRP $9,795
  • The Dominator X2 ST Model V2 – MSRP $9,995 (Adds Doors, OTR Tires and Matte Black Wheels)
  • The premium level Dominator X2 LT Model V1 – MSRP $13,095
  • The top level Dominator X2 LT Zeus Model V1 – MSRP $14,795 (Adds 7″ Full Touchscreen LCD, Heated Seats)

ODES Industries 2019 Dominator X2 ST

The 2019 Dominator X2 ST

The Dominator X2 ST versions have the following features:

  • 800cc Engine
  • Digital Dash Display
  • Full Roof
  • Heavy Duty Front Bumper
  • Full LED Lighting
  • Electronic Dump Bed
  • Rearview Mirrors
  • Door Nets
  • Front 3,500 lbs Winch
  • Towing Hitch
  • 14″ Wheels
  • 26″ Tires
  • Lockable Storage Boxes

The Dominator X2 LT models have the following features:

  • 800cc Engine with 1000cc option for Zeus model
  • Long Travel – Vi-LOCK Suspension
  •  Digital Dash Display
  •  Full Windshield
  •  Full Roof
  •  32″ LED Light Bar
  •  Heavy Duty Front Bumper
  •  Heavy Duty Rear Bumper
  •  Full LED Lighting
  •  Electronic Dump Bed
  •  Rearview Mirrors
  •  Metal Frame Doors
  •  Front 3,500 lbs Winch
  •  Rear 3,500 lbs Winch
  •  Towing Hitch
  •  15″ Wheels
  •  29″ Tires
  •  Lockable Storage Boxes
  •  Radiator Guards
  •  A-Arm Guards
  •  Electronic Power Steering
Also, there are three Dominator X4 models which seat six as a result of stadium style seating. These versions are similar to the two-passenger lineup with a Dominator X4 ST V1($11,295), Dominator X4 LT Zeus V1 ($16,495) and Dominator X4 LT V1 ($14,795).

Sport Model

ODES Industries Ravager LT Zeus

A 1000cc engine powers the sporty Ravager LT Zeus from ODES Industries.

The two-passenger Ravager LT Zeus gives ODES Industries a pure sport model in the lineup. A 1000cc engine powers the Ravager which features a Two Brothers Racing Exhaust, 3M graphics kit, Two Brothers/Dyna Jet Juicebox kit, front winch, 29″ OTR Dirt Master tires and 15″ OTR Matte Black wheels. The company revamped the model for 2019. Ravager LT Zeus features include:

  • 7″ Touchscreen LCD Display
  •  Long Travel – Vi-LOCK Suspension
  •  Full Windshield / Roof
  •  32″ LED Light Bar
  •  Two Brothers Racing Exhaus
  •  Passenger Grab Bar
  •  Cargo Bed
  •  Rearview Mirrors
  •  Metal Frame Doors
  •  Front 3500lbs Winch
  •  Rear Towing Hitch
  •  15″ OTR Matte Black Wheels
  •  OTR Dirt Master 29″ Tires
  •  Radiator Guards
  •  A-Arm Guards
  •  Electronic Power Steering
  •  Heavy Duty Front Bumper
  •  3M Graphics Kit
  •  Powder Coated Bars – Yellow or Blue
  •  Two Brothers / Dyna Jet Juicebox Kit

New XForce Models Feature Cabs

ODEs Industries XForce 4

ODES Industries added a cab to their latest offering, the Force 4, which seats six.

Finally, rounding out the lineup are the two newest models from ODES Industries, the XForce 2 priced at $20,995  and the XForce 4 priced at $23,495. The X2 can seat up to three and the X4 up to six. Both feature AC/Heating systems, heated front seats, 10.6″ LCD touch screen and a 1000cc engine. Standard features include new mapping, GoPro integration, front and rear camera options, temperature controls, digital displays, Bluetooth connection for phone and text display and direct screen audio control. The latter feature makes it easier to just ride rather than play with electronics.

  • Integrated Media w/ Bluetooth and USB
  • Onboard GPS Nav with Trail Tracking
  • Front and Rear 640×480 Cameras
  • In Screen Go Pro Integration
  • ODES Ultra LCD Integrated Software
  • Aluminum RollcageAC and Heat System w/ Fan Control
  • Onboard Generator for Power Support
  • Front Glass Window w/ Wiper System
  • Front Window Adjustment, 3 Settings
  • Glass Door Windows w/ Electric up/down
  • Single Row LED Directional Light Bar
  • Full Enclosure System
  • Interior Lighting
  • 3 Captains Chair Seating
  • Heated Driver and Passenger Seats
  • Fold Down Center Seat for Console Storage
  • Folding Aluminum Dump Bed
  • 800LBS Capacity Electric Dump Bed
  • Exterior Rear Working Light
  • Oversized Side Mirrors
  • Aluminum A-Arm Guards
  • 16 Gallon Gas Tank
  • 4500LBS Wireless Winch w/ Nylon Rope
  • Reversible Front to Rear Winch Hitch w/ 2″ Ball
  • Winch wire quick disconnects
  • Snorkeled CVT Air Intake System
  • Exterior Panel Light and Bed Controls
  • LED Front and Rear Lights
  • OTR Dirt Master Tires 28×10-14
  • OTR Steel Wheels
  • Interstate Battery
  • Royal Purple Ice Coolant
  • Stage 4 Made in USA Kevlar CVT Belt
  • Double Wishbone Independent Suspension
  • Ground Clearance of 327mm
  • Aluminum Box 1076x1561x260

Learn more:  Odesindustries.com

SVR’s Take:

ODES Industries is another value brand that appears to be having success offering solid features at a reasonable price. These brands typically have a starting price point in the $9,000 to $10,000 range for their entry level UTV, although some start even lower with fewer features. According to ODES Industries website, they source parts from around the world and partially assemble vehicles in Asia. The remaining assembly appears to be in the US. The company moved assembly from California to Dallas, TX in 2016.