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).
“According to our research, the traditional PUVs appear to be losing share to UCVs. It seems a growing number of rural residents, farmers and ranchers want more speed out of their work vehicles and are willing to pay more to get it,” Boeder says.
“We classify PUVs as speed-governed (25 mph), 2-6 passenger vehicles, typically equipped with large cargo areas, swing arm rear suspensions, 2WD or 4WD, and either bench or bucket seats. PUVs are still a sizeable category in the consumer market, comprising one in four vehicles sold over the last 2 years.
“UCVs also offer 2-6 passenger seating and large cargo areas, though they are unlike PUVs in that they are typically equipped with independent rear suspension and have top speeds of 44-53 mph. UCVs retain mostly utility styling and, overall, this higher top speed segment has been gaining significant share over the last 4 years. Most of the growth has been at the expense of the slower running PUVs. UCVs are the largest of the five consumer categories we track, comprising nearly 40% of the total consumer sales.
“We track three types of purpose-built recreational UTVs. Recreational and sport recreational vehicles both account for mid-single digit percent of the consumer market. These two segments are clearly losing share to high-end and super-sport vehicles, the large displacement ‘go fast’ segment of the market.”
Boeder and Dave Crocker, also a senior partner with Power Products Marketing, offer an outlook on ATV opportunities.
“The ATV market according to the Motorcycle Industry Council was down, though less than 1%. The non-reporting ATV market, representing many Asian suppliers with youth and small displacement ATVs was much stronger, with sales up over 15%. While many of these non-reporting ATVs are sold online, most of the issues related to emissions and poor aftermarket service have been addressed by suppliers, making them a possible option for dealers without a well-known power sports brand,” Boeder says.
Several companies, such as CFMoto from China and KYMCO from Taiwan, now have U.S. operations and have transitioned into becoming reporting members of the council. Crocker says Hisun from China is another brand that has seen significant growth. “Hisun’s quality is good and the prices are exceptional. Five years ago they were only selling a couple of thousand units each year, and this year they’ll sell about 20,000 units. They have the attention of the larger OEMs,” he says.
“We continue to advise dealers to be careful about who they select. Do your homework and look at where the brand is sold,” Crocker says. For instance, you’ll face tough competition if larger retailers, like Wal-Mart, are carrying the brand.
Crocker also says rural lifestyle dealers need to watch the economy. “In spite of the good growth for UTVs in 2014 and 2015, there are a lot of questions about the economy this year. A lot of power sports dealerships are tenuous about the economy and are treading cautiously. They’re watching their inventory management and availability of financing. Will customers have the financial standing to be able to afford these machines?” Crocker says.