Jan. 19, 2009 – A bright spot for the industry

By Neil Pascale
Editor
Although it hasn’t gone unscathed, the relatively small 2-up ATV segment has shown resiliency in the troubled U.S. economy, OEM officials say.
The overall segment, designed around providing seating for two quad riders, was down about 9 percent through the end of November in the United States, officials say. Still, it’s considerably healthier than the ATV core market as a whole, which was down roughly 25 percent through the first nine months of 2008. (Year-end numbers for the market were not available at press time.)
“It’s a healthy segment relative to the other segments,” said Gary Laskin, Utility/ATV product manager at Polaris Industries, one of the three players in the category. “It’s still not the biggest segment out there but if you look at the dollars to be made from dealers, it’s still a good place to be.”
Especially considering the largest part of the segment — big-bore sales — was essentially flat compared to a year ago through November.
“We’re all looking for bright spots with the economy the way it is and 2-ups is definitely a market we feel hasn’t even begun to realize its potential,” said Chaz Rice, product and media relations manager for Can-Am ATV, which along with Arctic Cat represent the other two OEMs in this category.
Thus far, most of the popularity around the 2-up resides north of the U.S. border. Rice says for Can-Am, the 2-up represents 20 percent of its ATV sales in Canada. The 2-up contribution for the United States represents a much lower percentage.
Laskin of Polaris says the overall 2-up segment represented 7 percent of ATV sales in North America through November.
A big reason why the segment has stayed relatively stable, even as the entire ATV market has struggled, is due to its customer demographic. Laskin said on average, 2-up consumers are older than traditional ATV riders and have more disposal income.
Rice agreed with that, noting these often-older consumers are not bearing the brunt of the U.S. economic troubles, including the mortgage issues that have impacted younger consumers.
Laskin also noted 2-up buyers are usually not first-time ATV buyers.
Clearly, the biggest core of 2-up buyers appears to reside in Quebec, Rice says, noting the area’s extensive ATV riding trail network.
“It’s more of a culture here in Canada, particularly in Quebec, than in some areas of the United States, particularly where the ATV trail system is still working its way into the consciousness of the ATV consumer,” Rice said.
Can-Am and Polaris appear to be the front-runners in the segment in terms of market share, with officials saying both companies have around 40-45 percent of the market share with Arctic Cat also being a key player. Arctic Cat unveiled new 2-up options at its 2008 dealer meeting after noting the segment’s retail sales had grown 33 percent in North American and 45 percent in Canada in 2007.
Although that growth likely won’t be repeated in 2008 due to the poor U.S. economy, there are plenty of signs of this small segment growing in the future.
“The drop in sales has not been as large as the 1-up market as a whole for us,” Rice of Can-Am said. “There are many reasons we can speculate, but a lot of it is people are looking at getting more versatility out of the machine.”