Exploring the commercial side of UTVs – October 16, 2006

Gardiner Outdoor Products Corp., based in Waldorf, Md., sells just less than 100 Polaris Rangers and John Deere Gators a year, says Neal Gardiner, vice president of marketing. The percentage of commercial sales is small, but Gardiner touts a local utility that uses Gardiner UTVs instead of pickup trucks for right of way maintenance, selling 10 units in 2005 and four so far this year. “That started as a cold call from the utility to the store looking for information,” Gardiner says.
Gardiner Outdoor Products actively seeks referral business and uses direct mail to target potential commercial clients, but employs no dedicated UTV salespeople. As other dealers have reported, most UTV sales are to people who may use them in work-related duties during the week but definitely use them for fun on the weekend.
Even a heavy equipment dealer like Best Line Equipment in State College, Pa., is finding that most utility vehicles wind up in recreational pursuits, reports Mike Getz, COO of the four-store dealership in central and eastern Pennsylvania that sells, services and rents construction equipment. Powersports comprises about 10 percent of the company’s business, which Getz characterizes as small but significant. The company sells a majority of its UTVs from the Polaris lineup, but Best Line also carries Bobcat UTVs.
“A significant portion goes on the commercial side, about 30 percent, with the rest going to recreational hunters, farmers and ranchers,” Getz says. “Sales continue to grow, and we’ve gone after the commercial business, winning contract business from the state of Pennsylvania.” So far this year, the company has sold more than 80 UTVs, including those sold under the state contract to such agencies as the Department of Conservation and Natural Resources and other government and military entities. Best Line Equipment works with Polaris to source Rangers when necessary, and, although Getz says margins aren’t as good on the commercial side as opposed to individual sales, the ability to expand the market is important.
For example, when Best Line was delivering several Rangers to a government client near Lake Erie, it loaded up a tractor-trailer with additional equipment Best Line also sells, which resulted in the sale of two aerial lifts and other equipment, Getz says.
The company has 10 outside salespeople who sell Rangers as part of their portfolio of products. Because of the commitment involved, Getz says commercial sales aren’t for every dealer. “You have to be proactive and leave the dealership,” Getz says. “You have to be on the road and be willing to do government contracts, bids and paperwork.”
Best Line salespeople target colleges, utilities and government agencies. They also make sure they receive information about companies that put products out to bid so they can compete for that business.
“You’ve got to focus on the (commercial) market and go after it,” Getz says, “to identify areas where you can make in-roads.”
John Deere has a national accounts team to handle commercial sales, but most are sold through dealers, who profit from setup and delivery and also are involved in maintenance and repair work. Bill Klutho, public relations manager for the John Deere Commercial and Consumer Equipment division, says 60 percent of the UTVs it sells go to individual owners. He notes the percentage of commercial sales has been dropping, not because commercial sales are down, but because individual purchases have picked up considerably over the past few years.
At Kawasaki, 88 percent of UTVs are sold to individuals. Yamaha would not discuss specific percentages but Steve Nessl, ATV and side-by-side public relations manager, said a “vast majority” of sales were to powersports-oriented customers as opposed to commercial sales. However, the company does have dealer fleet programs. Arctic Cat does not have a commercial dealer network. John Tranby, marketing communications manager, says Arctic Cat sales on the commercial side are less than 10 percent. “We really aren’t selling in that environment,” Tranby says. “It’s not our market.”
Chris Creel, president at Laurel Yamaha Inc., says he sells eight ATVs for every one UTV that leaves his store. But with each UTV sale, the profit margin is similar to selling five ATVs, so it’s no wonder he describes the UTV market as “extremely good.”
The exclusive Yamaha dealer, based in Laurel, Miss., says UTVs are purchased mainly by sports riders, deer hunters and those who own small farms. On the commercial side, Creel says, “I chase it, but it’s not much. The (Yamaha) Rhino is not seen as a commercial-type vehicle because it’s more sporty.”
The dealership employs an outside salesperson who does demonstrations at local farm shows, hunting shows, county fairs, soil and water conservation meetings and other local events. Laurel Yamaha also has had a display at the regional mall for three years, which helps drive sales.
Utility vehicles are the only product that UV Country Inc. in Houston sells. “There aren’t many of us around,” company President Shannon Tracy says. A huge portion of company sales are Kawasaki Mules, and commercial sales comprise 30 percent of company volume, Tracy says. “As time goes by, we’re getting more and more into the commercial side,” she notes. The company also carries the Tomcar, Coot 2 and the street-legal Gemcar, an electric, low-speed neighborhood vehicle.
UV Country does a variety of hunting shows, boat shows, national conventions, off-road expos and municipality shows, bolstering those efforts with a comprehensive Web site and magazine advertisements. Since the company is located in an industrial complex, those who find the store are ready to buy, Tracy says. The company is in the process of purchasing land with freeway frontage to build a new store, a process that Tracy says will take two or three years.
“When a customer comes in, they’ll spend two to four hours outfitting the Mule,” Tracy says. “We spend that one-on-one time with them, which is the key to success.” psb