UTV market sales rebound following two-year decline

This article originally appeared in the October edition of Powersports Business.

The North American side-by-side/UTV market in 2023 recovered in volume by +3.5% to 568,944 units following two straight years of downturn, according to research performed by Minneapolis-based research firm Power Products Marketing (PPM), which keeps an eye on the market, producing an annual database and associated report that define trends.

Initially a vehicle delegated to commercial uses (industrial, construction, turf maintenance, etc.) UTVs found favor with consumer users as it was realized manufacturers were bringing vehicles to market that could offer off-road adventure in relative comfort with golf car-like operational ease. Offerings like the Kawasaki Mule were certainly capable of light trail duty, but their designs proved overtly industrial when compared with the first major sport-oriented models to make an impact on consumer purchase decisions – the Yamaha Rhino and later the Polaris RZR.

Based on PPM analysis, Polaris Industries continued to lead the market last year, followed distantly by Can-Am, Kawasaki, Deere, and CFMoto. The remaining top ten purveyors of UTVs included Honda, Kubota, Hisun, Yamaha and EZGO/Cushman.

Of the 10 best-selling UTVs in 2023, five were Polaris models that together accounted for 10.4% of the total market volume. Those five Polaris machines were joined in the top 10 by the best-selling Deere XUV 835 series, the Can-Am Defender MAX Limited, Hisun Axis 500, Kubota RTV-X1100 and CFMoto UForce 1000. All 10 vehicles together accounted for about 20% of the total market volume.

Product categories

PPM splits UTVs into six distinct product categories, including Electric Utility Vehicles (EUV), Pure Utility Vehicles (PUV), Recreational Utility Vehicles (RUV), Sport Recreational Vehicles (SRV), Super Sport Vehicles (SSV) and Utility Crossover Vehicles (UCV). EUVs are speed-governed at 25 mph and under, offer a large cargo area, two- and four-passenger seating, can be either 2WD or 4WD, and are very popular at golf courses, estates and gated communities, with hunters and in industrial plants and warehouses.

PUVs are speed-governed at 35 mph and under, offer a large cargo area, often lack independent rear suspension, feature 2WD or 4WD, feature bench or bucket seats for two- or four-passenger options, carb as well as FI and EFI, and include all diesels.

RUVs feature speeds of 42 to 55 mph, have a sportier styling and a smaller cargo area than UCVs, feature independent rear suspension, FI and EFI, two- and four-passenger options, bucket seats, and 4WD.

SRVs feature speeds of 52 to 70 mph, sporty styling yet more cargo area than an SSV, typically with large displacement engines 800cc and over, independent rear suspension, EFI, two- and four-passenger options, bucket seats, and 4WD.

SSVs exceed 70 mph, offer performance styling with a limited cargo area, and typically feature large displacement engines 800cc and over, independent rear suspension, EFI, two- and four-passenger seating, bucket seats, superior handling and suspension, and 4WD.

According to PPM research, UCVs are responsible for 48% of the North American UTV market, PUVs account for 16%, SSVs hold 14.5% of the market, and RUVs maintain a 11.5% share. SRVs slide in with 5.5% of the market while EUVs hold a 4.5% share.

Consumer vs. commercial

PPM also splits its findings between Consumer applications, Commercial applications and – to a much smaller extent – Government applications.

Whereas in 2000 the ratio between Consumer and Commercial applications was approximately 40/60 respectively, there has been a significant shift to Consumer models accounting for the majority of units moved. Of the nearly 569,000 UTVs retailed in North America in 2023, PPM found Consumer applications likely accounted for 87.5% of sales while Commercial applications looked to be responsible for 11.5% of the total and Government applications accounted for less than 1%.

Each year as part of PPM’s dealer survey, retailers are asked to segment their sales into 10 different categories within each of the three applications – Consumer, Commercial and Government.

For instance, Consumer uses include Recreational Use, Farmer/Rancher, Estate Use, Residential/Homestead Use and Hunters; Commercial uses include Industrial, Golf, Other Turf and Commercial Non-Turf; and Government uses represent more than 60 different Federal agencies in the U.S.

Within the Consumer application, survey results show Recreational Use was the largest category in 2023, accounting for 30.5% of the total market. This was followed by Farmer/ Rancher (28.5% market share), Estate Use (11%), Residential/Homestead Use (9%), and Hunters (8.5%).

Within the Commercial application, results show Industrial use accounted for 5.5% of the total market, followed by Other Turf (3.5%), Golf (1.5%), and Commercial Non-Turf (1.0%).

Non-traditional brands

When you think of the UTV market, you’re likely to visualize models supplied by bigname brands and sold by a brand-dedicated network of brick-and-mortar dealers.

However, there is another layer to the market that’s often overlooked – the nontraditional-brand powersports vehicle market. These include units mostly sourced from China and sold not only by brick and motor dealers, but also via big-box outlets, the online marketplace, and independent retailers.

PPM finds sales are booming for these second-tier brands. While COVID-associated supply-chain issues haunted numerous established brands, manufacturing and shipping woes didn’t seem to impact many of the offshore brands that ultimately had them experience a surge in sales as container after container filled with vehicles continued to arrive unabated at U.S. ports.

In 2021, for the first time, the top 10 purveyors of UTVs – brands like Polaris, Can-Am, Kawasaki and Honda – were joined by lesser-known names, including Hisun and CFMoto. Also experiencing remarkable growth were importers/distributors like BMS Motorsports, Coleman, and Massimo.

For 2023, CFMoto and Hisun again cracked the top 10 brands. While CFMoto has focused on growing a traditional dealer network, PPM believes growth in a few of these brands correlates with their availability at big-box retailers, which have become a major outlet for lower-cost vehicles that couldn’t be found at traditional multi-line powersports dealerships.

Mass retailers

An often-overlooked segment of the market is the big-box retailers, with the top three being Lowe’s, Home Depot, and Tractor Supply. Other retailers such as Rural King, Atwoods, Walmart, Cabela’s, and Tracker Off-Road (Bass Pro) are also notable suppliers.

According to PPM analysis, UTV retail sales through big-box retail locations have grown substantially, from 5,000 to 10,000 units ten years ago, to 20,000 units in 2020. Sales peaked during 2021 and 2022 at just over 40,000 units. In 2023, sales dropped significantly as the post Covid bubble deflated consumer purchase activity. Home Depot retails multiple models sourced from Hisun; Lowe’s retails product from Hisun, Kandi America, and Massimo; Tractor Supply stocks multiple models of BMS Motorsports, Bighorn Powersports, and Massimo; and Rural King offers product from Hisun and Kandi America.

Neighborhood electric vehicles

Another segment that benefited when major OEMs became unable to supply UTVs to hungry consumers is the Neighborhood Electric Vehicle (NEV) market. NEVs include streetlegal electric golf cars, PTVs, and LSVs. Personal Transport Vehicles (PTVs) are limited to 20 mph and Low-Speed Vehicles (LSVs) are limited to 25 mph.

Demand for UTVs was high during the height of the Covid pandemic. PPM in their research reported that some consumers. searching for hard-to-find lower-cost UTV models instead opted for the purchase of NEVs, with many in turn outfitting them with lift kits and off-road wheel and tire sets.

NEV sales for 2023 totaled an estimated 210,000 new units, down 6% from 2022, which was up 56% from 2021. In 2021, sales were nearly double 2020 sales. The 2023 results signify the first downturn after nine years of growth for the market.

Approximately 60,000 to 70,000 used golf carts are reconditioned and upgraded to PTV or LSV speed ratings each year and sold into the consumer market. Retirement communities and local areas where NEVs are allowed on 35 mph roads are popular markets for these conversions.

While leading companies in the golf car market – E-Z-Go, Club Car, and Yamaha – play a key role in NEV production, here too we find non-traditional brands marketed by importers and distributors making waves in the market with product sourced from China. Among the leading newcomers are distributor brands like EVolution Electric Vehicles, ICON EV, Bintelli, and newcomer Kandi America, each of which has been making great strides in market share.

Until 2021, nearly all the NEV volume was going through Golf/Golf Accessory dealerships. With the rapid growth of the market in the last 36 months, PPM estimates that perhaps 20−30% of the NEV sales increase went through powersports dealerships and other independents like marine and RV retailers.

What’s next for UTVs?

Dealer inventories are building, higher interest rates and inflation are raising purchase costs, and consumer confidence is teetering, yet the market in 2023 experienced a 3.5% uptick in sales following a two-year cooling period. What’s next?

Based upon PPM’s U.S. UTV monthly tracking report, UTV retail sales for the first quarter 2024 were up 7−8% compared to 2023. However, the second quarter slowed considerably with growth between 1−2%. PPM projects a slight decline for the third quarter of 2024 and possibly a larger decline in the fourth quarter.

Chinese tariffs

Other forces are shaping the Side-by-Side market, making forecasting a challenge. The United States International Trade Commission (USITC) recently enacted 25% tariffs on Chinese-produced steel, aluminum, and other products, including UTVs regardless of point of manufacture.

Previously the tariffs, initiated by the Trump administration and extended by the Biden administration impacted only UTVs fully produced in China. With the new tariff, Chinese OEMs with offshore manufacturing or assembly operations in Vietnam, Mexico, Europe, or elsewhere could be subject to tariffs on components sourced from China.

Additional tariffs, some reaching 100%, were also enacted in May on items including Chinese EVs and lithium batteries, with additional products being phased in over the next three years.

The USITC is also considering issuing 100% tariffs specifically on Chinese-produced “low-speed personal transportation vehicles,” including golf carts, PTVs, and LSVs following a petition filed by Club Car and E-Z-GO for “illegal and unfair dumping and subsidies.” The European Union appears to be following similar action on behalf of their domestic manufacturers.

PPM projects 2024 North American retail UTV sales to at best, level with 2023 with the NEV outlook more uncertain.

Power Products Marketing (PPM), a Minneapolis-based research firm, has curated its Powersports retail sales data for more than 20 years. PPM provides detailed market share data and research services to the global power equipment industry. Markets covered include Powersports, Diesel Pleasure Boats and Commercial Vessels, Farm (AG) Machinery, Construction Machinery, Lawn & Garden Equipment, Generator Sets and Underground Mining Equipment.