Dealer survey shows UTV sales still strong

By Neil Pascale
Editor
Although there are signs of softening, UTV sales continue to grow across the United States, according to a national dealership survey.
The results show the side-by-side segment remains the lone bright area in the industry’s off-road new unit sales. ATV and off-road bike sales have both fallen by a double-digit percentage this year compared to the prior year, according to 2008 first-half data from the Motorcycle Industry Council.
However, the survey of 150 dealers conducted for Powersports Business reveals UTV sales are up for 38.5 percent of the dealers. Roughly one-third of dealers said their UTV sales were the same as last year while 22.5 percent said sales have fallen compared to a year ago, according to the survey that was done by Irwin Broh & Associates, a marketing research company.
Still, this year’s survey shows fewer dealers are up vs. last year — in 2007, 55 percent were up over the previous year — and a higher percentage of dealers are down in 2008 compared to the previous year.
“You are starting to see some flattening that you weren’t seeing before,” John Tranby, Arctic Cat’s communications and marketing director, said of the UTV segment. “It hasn’t started going down, but it has slowed.”
The Powersports Business survey showed a big division between dealers who are up vs. last year and those who are down compared to 2007. For those dealers reporting an increase in UTV sales, their retail sales are up an average of 27 percent. Those who are down have seen their UTV sales drop by an average of 24 percent.
Robert Kay, owner of Star City Motor Sports in Lincoln, Neb., belongs to the group of dealers who are continuing to see an increase in sales. His new side-by-side sales in late September totaled 77 units, a more than 40 percent increase from the prior-year period. Kay has seen sales increases in a number of different UTV models, from the four-seaters to the lower-displacement models.
Kay is also typical in that while his sales of UTVs have increased, his sales of ATVs have decreased. His quad sales have dropped slightly more than 15 percent while the nation as a whole was down more than 23 percent for the first half.
“They’re an awful lot more practical for anybody who has room to use them,” Kay said of UTVs.
Industry sources say the UTV retail market probably topped 130,000 new units sales in 2007, with Polaris earning the market share leader position followed closely by Yamaha and Kawasaki. There is no official retail sales report on the UTV segment in the industry currently.
“What’s happening now is you’re seeing segmentation occur,” Tranby said of the UTV segment. “Polaris came out with a purely sport unit with the RZR. We were playing in the middle with the Prowler. I think you’re going to see a lot more players do both types of units and probably even making purely utility.”
Utility certainly seems to be the bigger draw right now. Sixty-two percent of dealers said they are seeing more demand for utility-oriented UTVs than their recreational counterparts.
Larger-displacement units also are largely the UTV of choice as 79 percent of dealers said side-by-sides with 650cc or larger engines are the most popular options by consumer. That percentage, however, could change as more OEMs, including Arctic Cat, produce smaller-displacement options.
One factor that doesn’t seem to be tremendously impacting the UTV segment is the increasing cost of gas. More than 53 percent of dealers said higher gas prices did not negatively affect UTV sales. Twenty nine percent of dealers said it had “somewhat” of an effect while 15 percent do believe higher gas prices are affecting those sales.
What dealers are seldom seeing is the consumer switching from an ATV to a UTV once they’ve begun shopping for a quad. Dealers say that happens on average slightly less than 11 percent of the time, which is a couple of percentage points below what the 2007 Powersports Business survey found. That declining percentage is something Harry Watts, president of Andy’s Cycle Sales in Bonnyman, Ky., has found as well.
“We’re actually getting new people into the industry, which is fantastic,” Watts said. “I honestly thought 90 percent of these would be ATV trade-ins. But we have (UTV consumers) who have never been in the store before. It appeals to them where the other product didn’t.”
Tranby of Arctic Cat says the declining percentage is in line with what Arctic Cat has found in its own survey and that the number could dwindle in the years to come as more and more marketing is done on the UTV segment. “I think the UTVs are pretty well known now,” he said.
It’s a category that dealers, by and large, figure will continue to grow. Forty-eight percent of dealers said they believe future UTV sales will grow while 27 percent believe sales will slow.