Electric Utility Vehicles Showing Strong Growth

Despite the economic downturn the market for off-road electric utility vehicles, especially for hunters, is experiencing strong growth.  A recent story about Stealth Manufacturing reports that in 2008 the company sold 600 vehicles, five times the sales management expected.  Demand has continued to be strong in 2009 with management reporting that their

..entire production is sold out through Dec. 31.  We’ve outrun virtually every supplier we have.

Part of the growth of the Louisiana based company is attributed to their television sponsorship program with Primos Hunting Products. Stealth produces the Predator XR, Apache XR and the “Izzy” an industrial vehicle.  They are also planning to launch the Patriot LSV which went into production last week.  The company employs 38 people in a 82,000 square foot facility and is looking to expand their distribution beyond the current 70 dealers and distributors in 28 states. On the horizon is a new vehicle about which the CEO Bill Krutzer states

It’s probably going to change the complexion of the electric vehicle industry, and we’re testing it right now.  It’s a completely different electrical platform. We’re going to bring some pretty sophisticated technology to the game, and we’re not going to do anything but improve the price.

Learn more:  Thenewstar.com

Stealth Manufacturing is not the only electric utility vehicle manufacturer with a positive outlook.  The leader in the electric utility vehicle market for hunters,  Bad Boy Buggies, is expected to reach sales of $17 million this year, up from 2008, but down from a peak in 2007 of $20 million.  Despite a recent recall of their standard model the company is reports that their new XT model has been well received. They are also launching an LSV model and have had success selling their utility vehicles outside the hunting market.  A key marketing effort for them is teaming up with Bass Pro Shops which is running a test campaign in five markets.

Learn more:  Natchezdemocrat.com

A few weeks ago I had the opportunity to talk with Eric Burns of Bad Boy Buggies. He talked about some of their improvements in their new XT model which at the time had a waiting list of customers.  The improvements include:

• An independent suspension for better performance and comfort in extreme conditions and/or extended operating times
• Better turning radius
• Re-routing of electrical cables to protect them from the elements
• Improved distribution of battery weight that impacts performance on  steep climbs
• General improvements to the construction and design of the vehicle

Some of the non-hunting markets they are looking for gains in include agriculture such as dairy farms, government fleets and construction.  Burns noted that in some of these environments the electric utility vehicle allows an operator to more easily hear other vehicles in the work area, use walkie talkies or other communication devices without turning off the engine and avoid the necessity of storing fuel on site.  Key obstacles for electric utility buyers are battery replacement costs and the range of the vehicle, which in many instances may be a perceived issue rather than actual. Bad Boy Buggies is looking to expand their distribution network in the Western US from their current strongholds in the South, Southwest and Midwest, usually centered around hunting communities.

Additional signs of strength in the electric utility vehicle market include the recent entry of Polaris, the utility vehicle market leader, and Tomberlin’s plans to launch their electric utility vehicle, the Vanish.

On a related note, the fact that both Stealth and Bad Boy Buggies are coming out with LSV versions indicates an interesting sub-segment is developing in the LSV market.  Rather than vehicles that are primarily or exclusively used on-road, another segment of users that need a mix of off-road/rough terrain capabilities and public road access is emerging.  Burns of Bad Boy Buggies noted military bases, farms and college campuses as potential buyers of these street legal UTVs. - Marc Cesare

Columbia ParCar Wins U.S. Army Order For Nearly 800 LSVs

Columbia ParCar recently announced that they have won an order to supply 799 LSVs for the US Army.  The LSVs will be used at 47 US Army installations in the US and Puerto Rico and are part of a three year plan to purchase 4,000 LSVs.  The plan calls for 800 LSVs to be acquired in 2009, 1,600 in 2010 and another 1,600 in 2011.  The vehicles will be  used for passenger transport, security patrol, maintenance and delivery services.  According to Columbia ParCar’s Scott Breckley, Vice President of Sales and Marketing, “438 vehicles are four-passenger models and the remaining 361 units are utility vehicles capable of transporting two passengers and cargo.” Learn more:  Columbia ParCar

Comment: This order is another example of the growing importance of the military segment for LSVs and utility vehicles.  Kawasaki and Polaris have previously won contracts to supply utility vehicles and the Army’s LSV program represents a significant chunk of the LSV market.  For utility vehicles, vehicle performance in specific field applications and favorable price points compared to previous vehicle options available is driving demand.  Polaris, according to their latest presentation to investors, considers the military segment a significant new market development initiative in their global market strategy.  For the LSVs, the military is replacing more expensive larger vehicles and saving on fuel costs, while still being able to perform the necessary tasks. – Marc Cesare

More Farm Equipment Manufacturers Enter Utility Market

Both New Holland and Case IH have decided to enter the utility vehicle market with the addition of their Rustler and Scout UTV product lines, respectively.

New Holland Ruslter 125 UTV

New Holland is targeting the rancher, farmer and property owner with their line-up of three Rustler utility vehicles:  Models 115, 120, and 125.

New Holland offers Rustler UVs with 4×2 or 4×4 axles. For extra traction on the 14-hp 4×4 115 (gas) model, simply engage the shift-on-demand four-wheel drive, while the larger models engage four-wheel drive automatically. The 20-hp 120 (diesel) and 23-hp 125 (gas) models feature an automatic, all-wheel-drive system that delivers the gear you need, when you need it.

Lean more:  Northwest Horse Source

Case IH Scout UTV

Case IH offers their Scout and Scout XL utility vehicles.  The XL comes in a gas or diesel versions for 2 or 4 passengers. Key target segments for the Scout include crop and livestock farmers, contractors, and landscapers.

The two-passenger Case IH Scout offers premium features in a compact size, including: MacPherson Strut front suspension and best-in-class independent rear suspension; a wide ratio CVT transmission for fuel efficiency and smooth shifting; hydraulic, four-wheel disk brakes; ROPS protection, retractable safety belts and Halogen headlamps.

For all the comfort, safety and fuel-saving features in a bigger box, there’s the larger Case IH Scout XL. These also feature a wide ratio CVT transmission; hydraulic, four-wheel disk brakes; ROPS, retractable safety belts and headlamps; along with a double A-arm front suspension with coil overshocks for a comfortable ride; and a full-sized bed box with 800 lbs. (15.1 cu. ft.) of capacity – or 1,050 lbs. with the optional high capacity kit.

Learn more:  PRweb.com

Comment: I believe these new product line introductions are indicative of two trends in the utility vehicle market.  First, despite the economy and some declines in the market, the utility vehicle market is still relatively vibrant and poised for strong growth as the economy gains strength.  In part, this is because purchasing these vehicles  makes economic sense  since they  increase productivity.  In their July quarterly analyst conference call Arctic Cat reported positive comparative UTV sales figures for 9 of 13 weeks. In contrast, both Polaris and Arctic Cat have reported significantly sharper declines for ATVs than UTVs during the economic downturn.

This leads me to the second trend in the market – utility vehicles “stealing” market share from other vehicle classes.  One class being affected is ATVs.  Polaris estimates a third of side-by-side vehicles are displacing ATVs.  The other class of vehicles is tractors in the farm segment.  I have picked this trend up in interviews with farm equipment dealers and I speculate that these new product line introductions are, in part, a response to New Holland and Case IH experiencing a negative impact on tractor sales.  The  other reason for the introductions is that the utility vehicle market represents a good growth opportunity, one which competitors like John Deere and Kubota have already been exploiting for a number of years. – Marc Cesare

Polaris Announces Layoffs

In response to lower sales Polaris Industries will be laying off 50-60 people next month at it’s Spirit Lake, Iowa facility.  The company is reducing production at the facility by combining the Ranger utility vehicle and Victory motorcycle production lines into one line that will only produce one type  of vehicle at a time.  The change is designed to help maintain lower dealer inventory levels during this economic downturn which has hit markets driven by discretionary spending, like the utility vehicle and motorcycle markets, hard.  Kawasaki, maker of the Mule utility vehicle, has also reduced their work force this year.  On a more positive note Polaris announced a $6 million contract with the US military for Ranger utility vehicles and service.   Learn more:  SiouxCityJournal.com

Polaris Ranger HD Named “Best of the Best” by Field & Stream

The Polaris Ranger HD utility vehicle has been named “Best of the Best” by Field and Stream. Previously the outdoor publication had named the same vehicle one of the “Best Off-Road rides of 2009″. Key features of the vehicle include a self-leveling suspension, that helps maintain high ground clearance under heavy loads, and variable assist power steering. Learn more: www.motorcycle-usa.com

Polaris Enters NEV Market & Adds Electric Utility Vehicle

Polaris Enters NEV Market With The Breeze

Polaris Industries will enter the NEV/LSV market this September with their Polaris Breeze. The electric powered Breeze will be targeting end use applications such as golfing, transportation and light portage. Master planned communities are expected to be a primary market. The vehicle is the first product from the companies recently formed On-Road Vehicle Division and will be available in select markets. The MSRP is $7,499. Learn more; sidebysideaction.com

Polaris also recently introduced their 2010 line-up of vehicles which will include their first electric utility vehicle, the Ranger EV. The Ranger EV will share the same chassis as the new Ranger 400, a smaller vehicle with an MSRP of $7,999 that is aimed at the hunter, farming and estate segments . The Ranger EV will target similar customers and is powered by a 11.5 KW battery pack and 30 hp AC motor that gives the vehicle a top speed of 25 mph and a range of 25-35 miles. The EV has a box payload capacity of 500lbs and an MSRP of $10,699 or $10,999 depending on color selection. For a short review of the vehicle see can-amforum.com

Other product line changes include the new heavy duty utility vehicle, the Ranger HD, a new Ranger 800 XP, increased horsepower for the Ranger 4×4 and a new 800cc EFI engine for other vehicles in the line. For more specific features and changes learn more at www.sidebysideaction.com

Kawasaki Layoffs Finalized

Kawasaki Motors Manufacturing laid off 320 employees last week following an earlier buyout offer to workers in their consumer products division, which produces their utility vehicles and other products.  Management reported that nearly all the layoffs were the result of voluntary acceptance of the buyout.  As a result, the consumer products workforce at the Lincoln, NE location has been reduced by 25% to approximately 900 workers.

Kawasaki’s consumer products division reported a sales decline of 22% for the fiscal year ending in March.  This is on par with first quarter declines recently reported by Polaris Industries and Arctic Cat.  Learn more:  Journalstar.com

Polaris Announces New On-Road Division

Yesterday Polaris Industries announced the creation of a new On-Road Division with their Victory Motorcycles brand being a major component. In the press release  the company does not provide specific information about other products that may be produced by the new division:

Polaris is committed to growing its on-road vehicle business through continued growth in the motorcycle industry along with successfully introducing products into other on-road adjacencies in the future.

Polaris is well known for their off-road products:  snowmobiles, ATVs, and utility vehicles.  It will be interesting to see if they move beyond motorcycles in the on-road  space. Learn more:  Polarisindustries.com

Bobcat Turns To Polaris To Produce “Work” Vehicles

Bobcat has entered into a strategic alliance with Polaris to co-develop vehicles for the work segment of the utility vehicle market. The first vehicles are expected to hit the market in the latter half of 2010 and replace Bobcat’s 2100, 2200 and 2300 utility vehicles currently manufactured by Club Car. Bobcat and Club Car were both part of Ingersoll Rand before Bobcat was acquired by Doosan Infracore in late 2007. The alliance will help Polaris expand beyond their strengths in the powersports/recreational vehicle segment. Bobcat reports that only 20 of 1,800 Polaris dealers currently sell Bobcat products. The agreement will not have an affect Bob Cat’s Tool Cat line or the Polaris Ranger line. Learn more

Consumer Product Safety Commission Investigates UTVs

According to a story in the Wall Street Journal, the US Consumer Product Safety Commission(CPSC) has started an investigation into UTVs like the Yamaha Rhino and similar vehicles from other manufacturers. There have been 30 deaths reported involving the Rhino and the company has had more than  200 lawsuits filed against it related to the vehicle. There currently aren’t any safety standards for these type of vehicles  because they are essentially a new class of vehicle. According to the article:

They aren’t subject to ATV safety standards because of design differences such as having a steering wheel, in contrast to the ATVs’ handlebars. But the novel off-road vehicles also aren’t subject to the much-tougher standards for cars. Owners of UTVs don’t have to register them.

“When there is no standard in place, we have to basically determine if there’s a substantial risk of injury and death, and there’s a hurdle there that has to be met,” says Jay Howell, acting assistant executive director of the CPSC’s office of hazard identification and reduction.

This is how consumer regulation often works: Products hit the market governed by no particular safety standards. If injury reports later arise concerning a product, these gradually get the attention of both manufacturers and regulators — often with a spur from lawyers for those injured.

Based on figures provided by Power Sports Marketing for the article, approximately 150,000 Rhinos have been sold since 2003. Yamaha incurred a charge of $136 million in 2007 related to potential product liability expenses. Last month, most of the leading manufacturers of UTVs (Arctic Cat, BRP, Honda, Kawasaki, Polaris, and Yamaha) started the Recreational Off Highway Vehicle Association which has put out a set of safety rules and received ANSI accreditation to develop standards for the vehicles which they now refer to as Recreational Off-highway Vehicles (ROV).