August 13, 2007 – Defining a niche in the market

By Tom Kaiser
ATV Editor
With the Motorcycle Industry Council’s sales figures showing a 10.4 decrease in ATV sales in the first half of 2007, the health of the market depends on one’s perspective. One thing is certain though: any growth is noteworthy.
Aside from the UTV segment, often heralded as a panacea to supplant declining ATV sales, some manufacturers have increased their focus on 2-Up machines as a way to bolster the bottom line and find pockets of growth in a softening market.
Polaris, which says it controls approximately 40 percent of the 2-Up market, has been quick to call two-passenger models the fastest growing segment in the ATV business. Mike Dougherty, general manager of the company’s ATV division, said two-passenger units account for approximately 5 percent of the overall market and
10 percent of Polaris’ ATV sales. Suzuki, on the other hand, said it has no plans to build a 2-up machine because the segment’s sales have not been especially noteworthy.
While sales data specifically for the segment is not publicly available, Can-Am, Arctic Cat and Polaris have continued to introduce new two-passenger models, an optimistic sign for a juvenile segment of the ATV industry.
“It’s a segment that we’re excited about,” Polaris’ Dougherty said. “We’ll lead this particular segment hopefully into the future.”
With the introduction of Can-Am’s new $11,600 Outlander 800 Max Limited 2-Up and Polaris’ addition of two new Touring models for 2008, some manufacturers have clearly found the segment worth the investment. The Polaris Sportsman 500 X2, for example, is the top selling 2-Up in North America, and Dougherty said the company is focused on becoming the No. 1 multi-passenger vehicle make in the industry.

Beyond the Second Seat
Arctic Cat and Polaris both have cited increased versatility of some 2-Ups with attracting new sales. The Polaris X2 models have a cargo box that converts to a seat, and Arctic Cat’s TRV Plus models have a seat that can be swapped out with a cargo box.
Kale Wainer, with Arctic Cat’s media relations, called the TRV a “three-in-one machine” and said the company views the market as more than just people who are touring.
“The TRV can be used in many applications,” he said. “If you want to remove the 2-Up seat, you can replace it with a SpeedRack or a heavy-duty cargo box.”
Wainer added that in areas with established trail systems, like Quebec and Ontario, 2-Up machines are the preferred ATV. It’s a segment, he said, where Arctic Cat sees future growth.
“This is a market we definitely want to gain market share in and have made many changes since [the TRV’s] introduction,” he said. “I think in the future you will see many more improvements focused on luxury touring with plush suspension, more cargo carrying capacity and possibly larger motors.”
Dougherty said Polaris has recently segmented its 2-Up market into two different groups for 2008, appealing to the versatility-seeking customers with the X2 and the trail riders with the new Touring models that are designed for rider comfort, a softer ride and offer dual cup holders.
Can-Am has taken a catch-all approach, offering nine trail-focused 2-Up models available with all four of its Outlander engine sizes. “It was our experience up in Quebec, with the extensive trail system up there and the need for the 2-up machines, that really brought us to that market,” said Chaz Rice of BRP’s media relations.

Attracting New Customers
In the heart of the Hatfield-McCoy Trails in West Virginia, Sales Manager Mack Paynter at Keefer’s Kawasaki Suzuki Polaris in Logan said 2-Up shoppers are typically a husband and wife pair and slightly older than the average ATV customer. He added they’re typically new to the sport and looking to save money over buying two separate units.
Paynter said Keefer’s has been selling 10-12 2-ups a year and said customers tend to view the machines as a “Cadillac,” dressing it up with a disproportionate amount of accessories — good news for the dealership’s bottom line.
Joe Oertel, sales manager at Barry Motorsports of Lakeland, agreed with Paynter, saying the average 2-Up buyer is a beginning rider, oftentimes a husband and wife. They’re often interested in fuel economy and like to compare available models with a demonstration ride.
Barry Motorsports of Lakeland, located in agricultural west-central Florida, sells the three current 2-Up players — Can-Am, Arctic Cat and Polaris. Oertel said the machines have “absolutely” been good for business, even though sales have flattened.
“The individuals that come in looking for a 2-Up machine are definitely interested in one of the three [brands] we offer and they usually are a buyer right away,” Oertel said. “The people that are looking at those … are looking for comfort, useability and ease.”
For Oertel, the Can-Am units have been the most popular, but said all competing models seem to attract higher-than-average spending on accessories like trunks, coolers, winches and upgraded wheels and tires. Both dealers added this year’s overall ATV sales have been slower than 2006.