By Neil Pascale
Recently released information shows the rate of growth for what is believed to be the fastest growing powersports vehicle in terms of retail sales percentage could be slipping.
On the other hand, a separate report shows the sales growth of the UTV as healthy as ever. Whichever retail sales path the side-by-side is currently on — the one of double-digit percentage annual growth or a much more conservative estimate — it figures to be a positive one for the rest of the year, industry leaders familiar with the UTV business told Powersports Business.
“Our belief is that the industry is still growing,” said Matt Homan, the general manager of Polaris Industries’ UTV division. “It’s still doing fairly well. Now is it the same rate of growth that we’ve saw two, three, four years ago? Maybe not, but it’s still strong.”
Two years ago, the most definitive public sales report of the side-by-side segment — Yamaha’s annual financial report — showed retail sales had skyrocketed more than 60 percent compared to the previous year. For 2007, that report showed a drastically reduced growth rate — 7.6 percent.
Is that number indicative of the segment’s growth throughout the industry? Could the segment, which industry sources say accounted for approximately 150,000 new unit sales in powersports dealerships in 2007, be nearing a peak in terms of annual volume?
Industry members familiar with side-by-side sales don't think so.
“Sales have been still increasing every month for us and we look for that to continue at least in the year ahead,” said Bob Starr, general manager of communications for Yamaha Motor Corp. USA. “Granted there is new competition that is coming at a fast and furious pace as a result of our growth that we’ve experienced during the past few years in the category. But we’re still extremely pleased at the sales results and extremely optimistic that it will continue. We haven’t seen any letdown.”
Since there is no official UTV retail sales report available to the industry, the growth of the segment is hard to track. But industry leaders have pegged the growth in recent years at a double-digit percentage. The Yamaha 2007 financial report was the first to show the growth curve leveling out somewhat. Does that indicate the industry segment as a whole dipped beneath the double-digit percentage growth last year?
“I don’t know the numbers, but my suspicion is it still did grow double digits in 2007,” said Polaris’ Homan. “What you’ll see, just like any industry, is there are folks who grow stronger in certain areas than others, and new products are part of that. Obviously with RZR and Crew coming in, and frankly our base Ranger doing very well, we’ve seen very strong results, and we’re thrilled with the market.”
In fact, strong UTV sales was one of the reasons Polaris recently updated its first-quarter guidance, citing what are believed to be better-than-expected overall sales.
“We had fairly lofty expectations,” Homan said of the RZR’s impact on company sales, “but it has even exceeded our expectations.
“We’ve been battling the supply and demand for the first eight months of the product’s life.”
Both Homan and Vince Iorio, product manager for Kawasaki Motors Corp. USA, believe part of the reason UTV sales have remained strong is the segment attracts a consumer demographic that is largely not affected by the nation’s current economic challenges.
“The UTV buyer has more income than the traditional powersports buyer, but I don’t think we know for sure yet how the economic downturn is going to affect that,” Homan said. “But as of today, all I can speak to is what we know, which is that demand remains pretty darn strong.”
Iorio believes the UTV sales percentage growth for the powersports industry will remain in the low- to mid-double digits in terms of percentage growth for this year.
“I think it’s still robust,” he said of the segment’s overall growth.
Copyright 2008 Powersports Business