Nov. 2, 2009 – Off-road market sees some uptick

When is a minus-24 percent in retail sales something to at least breathe easier about?
When that same sales category has been dangerously close to minus-40 percent earlier this year.
That’s exactly what mind frame some officials in the core ATV market are in right now.
“It isn’t positive in the sense that we’re doing better than we were,” John Tranby, Arctic Cat’s marketing director, said about the core ATV market’s retail sales. “But that’s certainly better than what we’ve seen.”
The same can be said for the UTV market, which by all accounts has performed better than the core ATV segment in terms of percentage loss during the first nine months of the year.
Polaris officials estimate UTV retail sales year-to-date are down percentage-wise in the mid-teens. Unlike the core ATV market, the side-by-side segment does not have any official sales record as the Motorcycle Industry Council (MIC) does not track those sales.
If Polaris’ estimated numbers are correct, then the market has picked up since earlier this year. A Powersports Business dealer survey of 150 dealers in July found 57.5 percent of dealers reporting decreases in their side-by-side sales. Only 10 percent of dealers reported being up in UTV retail sales over the prior year. Of those dealers who reported decreased sales through July, their sales had dipped by an average of 30 percent.
Polaris, believed to the market share leader in side-by-sides, said its UTV sales in its recent third quarter were even better than the industry’s, with their sales down in the mid single-digit percent compared to last year.
“We have seen sequential improvement from both the industry and Polaris in the third quarter versus the previous quarters,” Bennett Morgan, Polaris Industries’ president, said of UTV sales during the company’s recent earnings report.
Tranby at Arctic Cat also has seen some positive signs from the company’s Prowler business. “As far we’re concerned, that business is doing better than ATV. It’s not as down,” he said, noting in some weeks it’s on par with last year’s sales.
That isn’t the case with the core ATV market.
That market finished its first half down close to 32 percent compared to the year-ago period. The first part of 2009 was particularly difficult as March sales shrank nearly 38 percent compared to the previous year.
But in September, overall industry core ATV sales were off only 24 percent.
“ORV (off-road vehicle) markets appear to have stabilized, but we have not seen signs of significant improvement in the markets yet,” Morgan said.
Looking specifically at the ATV market, there has been some movement in regards to market share, according to a report by Wells Fargo Securities, LLC. The worldwide market share report, which uses multiple industry sources, shows Polaris and Can-Am gaining market share this year and Suzuki and Arctic Cat losing market share.
However, Tranby of Arctic Cat did note the manufacturer picked up market share over the summer with its promotion of 1.9 percent financing of certain models.
— Neil?Pascale

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