Moving production to U.S. allows for late-season model releases
Yamaha, a company known for its trademark lineup of bright blue vehicles, is unleashing a raft of popular utility ATV models with bold red plastics as late-season 2013 models. The crimson additions, according to the company, are a response to healthy demand for its most popular utility ATVs — the Grizzly 700 FI EPS, Grizzly 550 FI EPS and Grizzly 450 EPS.
“Yamaha has strong demand from a variety of customer groups — including farmers and recreational users alike — for the red utility models, and we’ve seen our dealer partners ask for them,” said Steve Nessl, Yamaha ATV/side-by-side group marketing manager. “All of Yamaha’s 4x4 ATVs now come from its U.S. manufacturing facility in Georgia, which allows the company to respond more quickly to customer demands while also streamlining distribution. It’s exciting to see that process in place.”
During an exclusive interview with Powersports Business, Yamaha officials discussed the company’s new red ATVs, the slowly improving health of the off-road industry, the benefits of stateside production, and suggested the company may have a new side-by-side waiting in the wings.
Benefits of insourcing
While Yamaha’s American arm stresses a history of positive, open communication with its Japanese counterparts, Nessl said shortening the flight between its headquarters near Long Beach, Calif., and its production facility in Newnan, Ga., has reduced one-way travel time from 13 hours to less than four.
The closer proximity has encouraged making running changes, like adding red models, which are now decisions that can be made with more ease.
“Those are the kinds of things that are happening now, like this mid-year red model release that may not have happened because of production being in Japan,” Nessl said. “It comes down to exactly what the market’s doing, what kind of demand we’re seeing [and] obviously we’re seeing some demand for red models.”
Other benefits to moving its 4x4 off-road production to Georgia — along with the Raptor 700 sport quad and existing Rhino side-by-side production — have included bringing jobs to the U.S., employee and dealer pride, less susceptibility to fluctuations of the Japanese yen and a $400 cost saving in the case of the Raptor 700.
“These are all the positive things we were hoping would come from moving assembly down to Georgia, so it’s really a win-win-win across the board,” Nessl said.
As Yamaha has moved more of its off-road production to Georgia from Japan, the company has put its marketing muscle behind its American assembly with “Assembled in the USA” badging on its vehicles to leverage goodwill as “insourcing” has become a national buzzword. Nessl added, however, that work is needed to spread the message to dealers and consumers.
“That [Assembled in the USA] logo is everywhere for us, and will continue to be,” Nessl said. “Unfortunately it’s not as well and widely known at this point, but that said, the people that wanted it to happen and have learned about it are super excited and are promoting it — and it can be a factor in a purchase decision for a lot of consumers.”
Features vs. price
As ATV sales are on track to grow slightly in 2012 for the first time in six years, according to the Motorcycle Industry Council, Yamaha is expecting its own sales to be flat or increase very slightly.
“To be honest, I think it’s probably closer to flat than even a little bit up,” Nessl said. “But it’s not down, and by not being down, it’s up.”
Throughout a challenging few years as manufacturers suffered through the Great Recession, the industry has seen formerly high-end features like power steering and fuel injection become universally accepted and a requirement for any model to be considered fully featured.
As signs of life return to the utility ATV industry, Yamaha is focusing on exploiting niches and maintaining dealer inventory levels. Nessl said consumers seeking out such features in lower-displacement, entry-level products is a challenge for manufacturers as they attempt to appease such customers, while keeping the vehicles’ price points as low as possible.
Yamaha’s Grizzly 450 — introduced in 2011 and priced at $7,499 — has successfully bridged the gap between affordability and features, he said, joining the Grizzly 550 and 700 models as image-leading products for the brand.
During the interview, Nessl also suggested that the company might be readying an all-new side-by-side model. The company’s segment-defining Rhino debuted nine years ago, in 2004, and has soldiered on with only minor upgrades, an eternity in a category that has matured from solely work-minded utility vehicles to now include crossovers and high-powered, race-ready sport vehicles.
“Obviously Polaris has a lot of side-by-side models, Honda’s got the Big Red but there are rumors floating around that they have another one coming, and Kawi is introducing more models, and we’ll have an announcement this summer that very likely could be in the side-by-side vein as well,” Nessl said.
While the comment is vague, rumors have suggested that Yamaha sees the sport side-by-side market as saturated by a raft of successful models, while opportunities still remain for new models at the utility end of the spectrum.
The company declined to confirm whether it was suggesting an all-new model, if it would be a replacement for the Rhino or any other details.
Nessl did say that side-by-side sales remain strong, and it is the fastest growing category within the off-road industry.