Pictured Above: Sehorn Yamaha, Shawnee, Okla., sells a good share of its UTVs and ATVs to sports enthusiasts who ride the sand dunes at nearby Little Sahara State Park. Add-on sales for UTVs include turbo-chargers, roll cages, long travel suspensions and stereo equipment.
The utility task vehicle (UTV) market grew 16% in 2014, 8% in 2015 and will grow this year, according to Power Products Marketing, a research and consulting firm that works with OEMs, suppliers and others.
Here are a few more good signs for the market. For 5 years in a row now, utility vehicles have ranked in the top 5 for product lines with the most potential to increase revenues, according to Rural Lifestyle Dealer’s annual Dealer Business Trends & Outlook Report. Manufacturers are stumbling over each other to introduce new or expanded lineups. And this October, GIE+Expo is offering its first “UTV University,” a training program for dealers.
A related line, all-terrain vehicles (ATVs), hit its peak before the recession, and recent sales have been flat. However, there are some ATV segments showing growth, specifically some models from Asia, according to Power Products Marketing. And, about 20% of rural lifestyle dealers expect to add ATVs to their lineups this year, according to the Trends Report.
“This market is getting more competitive. Recent new products from Honda and Yamaha as well as newer suppliers such as Hisun, Cub Cadet, Mahindra and Gravely offer consumers more options in an already crowded market. Expect your local competitors to have more brands and models and be ready to add a line,” says Greg Boeder, senior partner with Power Products Marketing. (See “Where is the UTV Market Headed?”)
Mark Sehorn, owner of Sehorn Yamaha of Shawnee, Okla., says about 65% of his UTV and ATV sales are to recreational customers and 35% are for the ag market. He says he sells about 300 UTVs a year, with about 175 of those being the Yamaha Viking 3-seater vehicle. The 6-passenger model is next in popularity and there’s a growing interest in the brand’s YXZ1000 sport UTV model.
- Vehicle speed is a big selling point for UTVs. Know your brand’s other advantages if you can’t compete on speed.
- Accessories offer good margins. Think “tasks, comfort and seasonal needs” when recommending add-on components.
- Customers want to be able to use their vehicles right away, so you may lose sales if you don’t have the models or accessories in stock.
- Consider displaying a unit that is loaded with accessories to show customers all the possibilities.
The dealership is located near Little Sahara State Park, which includes 1,600 acres of open sand dunes and trails. Sehorn says sport riders are looking for power. “They’re into performance. We’ve done quite a few turbo charges, which increases the 115 horsepower models to 155 horsepower. They don’t mind spending money on their vehicles. We add roll cages, long travel suspensions and high-end stereo equipment. They’re not as much into the winches and bumpers,” he says.
The dealership has a 30,000 square-foot showroom and another 24,000 square feet of warehouse and shop space. “We have 10 Vikings on the showroom floor. For one of the display units, we put everything on it and once a month we’ll sell that unit,” Sehorn says. They also have 20 acres for test driving the machines. However, the high performance sport units are usually driven by the dealership’s staff for safety reasons.
Where is the UTV Market Headed?
Greg Boeder, senior partner with Power Products Marketing, outlines the trends for the different segments within the utility vehicle category: pure utility vehicle (PUV); utility crossover vehicle (UCV); recreational utility vehicle (RUV); sport recreational vehicle (SRV); and super sport vehicle (SSV).
He says his customers’ priorities are generally pricing, reliability, ride quality, convenience, bed capacity and capabilities. “They want to get more for their money, but the die-hard UTV customer is not looking for the cheapest vehicle,” he says.
For those customers who are more task-oriented, windshields, winches and wheel-and-tire packages are the most popular add-ons. “They mainly want to get from Point A to Point B and are hauling cubes or sack feed to their cattle, but they still want power and speed. It’s all about performance,” he says.
Steve Widrick (right) of Central Kubota, Waxahachie, Texas, says the majority of his UTV customers are looking for work machines. His son, Justin (left), handles sales. Canopy tops, windshields and light kits are popular accessories.
Photo Courtesy of Central Kubota
Sehorn says his ATV sales are good, but drastically down from the height of that market. He sells about 400 a year, down from the 800 he was selling about 14 years ago. His line now includes Yamaha’s three models, as opposed to the 25 that were available in 2008. Sehorn says the popularity of UTVs and accessory sales more than make up the difference. “We’re selling $12,000 Vikings and then adding $1,500-$2,000 per unit in accessories. Accessory-wise, we make more money on that than selling ATVs,” he says.
“The market is really healthy in the recreational outdoor segment. The biggest concern I have is keeping the younger generation interested and creating new customers. The UTV market is a younger customer, but it’s a fad right now,” Sehorn says.
“Our customers want something that’s fast, comfortable and looks good…”
– Chris Guggemos, Mies Outland
Chris Guggemos is sales manager for Mies Outland, Watkins, Minn., which bills itself as “The largest Polaris dealership on earth.” The dealership also carries John Deere. The Polaris XP 900 Ranger, which can hit speeds of 40-60 mph, is a top seller. “Our customers want something that’s fast, comfortable and looks good. Farmers want speed when they’re driving from field to field. Our property owners may not use it like that, but everybody wants the biggest and the best,” Guggemos says.
“When they’re buying ATVs, they look at how they can get the cheapest ‘bang for the buck,’” he says. “We used to be able to get in used 4-wheelers, but now people are keeping their 4-wheelers and buying Rangers or Razors,” he says. The Razor is Polaris’ high performance UTV.
For the John Deere brand, he says the XUV825i Gator is a top seller and he thinks customers will be interested in John Deere’s new XUV590i mid-size UTV. “I think it’s going to be a good seller because it’s smaller. A person who wants to get into the side-by-side market can start with that model,” Guggemos says.
The Minnesota climate influences the purchases of accessories, with cabs, heaters, radios and snow tracks being the top sellers. Guggemos says their retail environment and extensive inventory helps their store reach customers far beyond their local population of 800 people.
Speed, comfort and being able to test drive the machines are big selling factors for UTVS, regardless of whether the intended use is for recreation or work.
Photo Courtesy of Doug Neufeld
“We have over 300 machines in the main showroom and we’re constantly changing our displays because we’re selling off the floor,” he says. Their showroom includes a waterfall, pond and river, and the sales team’s offices have a log cabin theme. “It’s like walking into a Cabela’s. We’re trying to target the hunter and sportsman,” Guggemos says. They also offer extended hours Monday-Friday, are open until 4:30 p.m. on Saturdays and from 10 a.m.-3 p.m. on Sundays.
Steve Widrick of Central Kubota, Waxahachie, Texas, says his customers are mostly a mix of large ranch operators and small acreage owners. They are looking for task-oriented machines. Oil companies and related businesses were also major purchasers until the recent decline in the market.
“Our top seller is the Kubota diesel RTV-X900 because it’s a work machine, has hydrostatic transmission — and because of the Kubota brand,” Widrick says. He says customers also like the convertible cargo bed of the RTV-X1140, which allows users to seat 2 passengers with a larger cargo bed or convert to 4-passenger seating with a shorter bed.
Paul du Toit is the Emporia, Kan., location manager for PrairieLand Partners. The dealership holds an annual Gator Rally fundraiser to raise money for local charities and build interest in the utility vehicles.
Canopy tops, windshields, light kits, mirror kits and winches are some of the more popular accessories. “Stocking the units and accessories is important. If they come in today, they want it by the weekend,” he says. “Our biggest sales feature is to let them get in the seat. When they drive over a few bumps with the independent suspension, they’re impressed with how it handles. Once they drive it, almost 95% of customers end up buying.”
Customers are also taking advantage of no interest financing offers and adding accessories into the initial vehicle purchase.
Allowing customers to drive the vehicles can increase sales, and PrairieLand Partners has expanded that tactic into a four-day Gator Rally, which was held for the fifth year in a row this past June. The dealership’s team at its Emporia, Kan., location has led hundreds of participants through Kansas’ scenic Flint Hills riding on Gator utility vehicles as part of a charity fundraiser. Each night of the event, employees also prepare and serve a meal at a campsite.
The Recreational Off-Highway Vehicle Assn. has developed these safety rules. Consider sharing them with potential and new UTV and ATV owners.
- Always fasten your seat belt, wear a helmet and other protective gear and keep all parts of your body inside the recreational off-highway vehicle (ROV).
- Avoid paved surfaces. ROVs are designed to be operated off-highway.
- Drive only in designated areas, at a safe speed, and use care when turning and crossing slopes.
- Never drive or ride under the influence of alcohol or drugs.
- Operators must be at least 16 years or older and have a valid driver’s license. ROVs are not toys.
- Never carry more passengers than the ROV is designed for, and never allow a passenger who is too small to sit in a passenger seat to ride in the ROV.
- Read and follow the operator’s manual and warning labels.
- Take a hands-on ROV Basic Driver Course and the free online E-Course. Visit rohva.org or call 866-267-2751
About 200 people participated in the event this past June. More than $42,000 was raised for local charities through attendee donations and sponsorships from 22 local businesses, says Paul du Toit, location manager. The event has raised thousands of dollars over the years — and is building loyalty and brand recognition for the dealership.
The Gator Rally requires a long-term vision in order to see a direct benefit, but the Emporia location has seen an increase in utility vehicle sales since they’ve been holding the fundraiser. “Our location sells twice as many utility vehicles as any other location in our company, and we are not even in the largest potential area,” he says. “The Gator Rally has given us great exposure, and we’ve sold more utility vehicles as a result. This didn’t just happen overnight, though. It has made a noticeable difference over a few years.”
Du Toit says the XUV825i is PrairieLand’s top-selling model, which offers speeds reaching 44 mph. About 60% of the dealership’s market is farmers and ranchers. “Ground speed of the UTV is very important for our customer base. Whether they are looking at crops, checking cattle or just driving out in the country to see the sights, they are traveling a fair amount of distance and they want to be able to go fast,” du Toit says.
These farm and ranch customers often purchase Deere’s guarding package, light protection, floor mats and plastic canopy. Because of the wear and tear on the vehicles, the dealership has been able to sell extended warranties and products, such as tire sealants. “We believe in having a sales specialist. He’ll go after select customers and do demonstrations. For us, this is a ‘must,’” du Toit says.
Reaching New Segments
Joe Kalbas is sales manager for Paige Tractors of Paige, Texas. The dealership carries the Cub Cadet, Kioti and Hustler. He says his customer base has remained mostly steady, but a new segment, women, are purchasing more units.
The KYMCO UXV 500iG features a 5kw generator that can be used for off-road electrical needs, such as for remote projects or at campsites.
Photo Courtesy of Kymco
“In my market, it’s always been the farm and ranch owner and the hunter, but more women are buying the units. The guys want power and want to know how much they can pull. The ladies are concerned about how quiet it is,” Kalbas says. The quiet factor also appeals to his hunting customers.
The two-seater models make up about 40% of his sales. He says the Cub Cadet Challenger model, which was introduced last year, has been a top seller. “The Challenger is a great unit, and it’s priced right. It’s a lighter unit. The Cub Cadet Volunteer had a wider unit and a beefier build. It had a bigger hauling capacity, but it was louder. The Challenger is slicker, smaller and quieter. Plus, it’s fast and less expensive than the Volunteer.”
He says the Challenger includes some add-ons as standard features, including the top, windshield, winch and light package.
Riding the Hills
Share the experience of driving in the Flint Hills of Kansas through these images shot by Doug Neufeld, who recently retired as CEO of Prairieland Partners.
“Normally, those accessories for the Volunteer would run close to $1,200. I don’t make as much from a dealer perspective, but they’ve been able to keep the price of the unit with those add-ons competitive, and I can make a decent mark-up,” he says.
There are many uses for utility vehicles and ATVs, so they open up a wide range of customers for your dealership. Although the vehicles are intended for off-road use, some local ordinances are being enacted that allow utility vehicles to be driven on streets. The Consumer Products Safety Commission website (www.cpsc.gov/en/safety-education/safety-education-centers/) has links to state highway patrols, so you can stay current on regulations in your area.