Dec. 3, 2007 – BRP focuses on R&D to fend off competition

By Neil Pascale
Steps BRP has taken this year to increase its R&D capabilities might never completely vanquish the “research and development to-do list,” but it will certainly help reduce it.
The Canadian manufacturer spent more than $40 million in the past 18 months to develop company R&D facilities, including two in Canada and one in Austria.
The impact of the new facilities might not be felt in 2008, but certainly beyond that.
“Innovation is the name of the game in our industry,” said BRP CEO Jose Boisjoli in a wide-ranging interview with Powerports Business. “Five years down the road, our product
will come with advanced technology at a
faster pace, and it’s because we made those investments to 2007.”
That’s not to say there won’t always be more projects the company would like to do than its R&D staff can handle. The company experienced that recently as it decided to pursue its first-ever on-road project, the three-wheeled Spyder, instead of entering the growing side-by-side market.
“It’s not a question of money. It’s a question of resources,” Boisjoli said in why BRP decided to focus its R&D on the Spyder and not on both a new on-road vehicle and a side-by-side. “We have to decide where to invest the resources, and we decided to invest in the Can-Am roadster before the side-by-side business. But it will come.”
When BRP will debut its first-ever
side-by-side isn’t being made public, but Boisjoli does think a UTV fits with the company’s
Can-Am brand name, which it uses for its sport ATVs and Spyder.
“One day we’ll have a side-by-side,” Boisjoli said. “That’s clear.”
Boisjoli indicated BRP also is looking closely at the PWC market and seeing where it can take its market-share leading brand, Sea-Doo. According to Statistical Surveys, Sea-Doo was able to gain market share percentage in 2006.
“Right now in the watercraft business all the product is similar,” Boisjoli said of the entire PWC market. “I think the watercraft industry can grow if we come with true innovation. It’s definitely something we’re working on, to come with something that will change the rule of the industry again. But we’re not there.”
He does, however, see the PWC market as healthy, even as it has remained flat over the past few years. Boisjoli cites “the profitability per unit, the profitability of the used product and also the profitability for winterizing and storing the customer’s unit” as reasons why the PWC segment remains “a profitable business for the dealers and the OEM.”
International growth in the PWC segment — as well as in the snowmobile sector — also has helped. Boisjoli said Sea-Doo has seen some sales growth in Europe, Australia and South America.
International plans — as well as the U.S. timetable — for the Spyder’s rollout have been moved up. Boisjoli said the second and third phases of the Spyder rollout for North America have been moved up six months. What states and Canadian provinces will be part of the second and third phases of the Spyder rollout has yet to be announced, although the manufacturer has scheduled a February dealer meeting to tackle the subject.
BRP also will be distributing the Spyder in more countries than it had originally planned. What’s driving the increase, not to mention the quickening of the vehicle’s rollout in the United States? Consumer demand, Boisjoli said.
“We have had very positive response from dealers and consumers,” said Boisjoli, noting the deposits BRP has received on Spyders already outnumber its expectations of 2,500.
BRP built the first 900 Spyders by late October at its Valcourt, Canada, production plant and was set to return to production by the third week of December. The company was then expected to remain in Spyder production until at least the beginning of summer.
Despite having a new business segment, BRP has chosen to stay within its own dealer network to sell and distribute the Spyder rather than look for new dealers. BRP’s goal, Boisjoli said, is to eventually have half of its North American dealer network selling the on-road vehicle.
Boisjoli has said before that he would not be surprised to see another large powersports manufacturer enter this new “roadster” segment of on-highway vehicles.
“I think everyone is looking at us, and they’ll see how successful we are,” he said. “I’m expecting that some will come to this new segment at one point, but I have no indication” that any OEMs have taken that step yet.
Boisjoli also stated previously that the Can-Am roadster will include different variations in the future, something that undoubtedly will be dreamed up at one of the new R&D centers that are currently being built. Those centers include the design and innovation center in Valcourt, an advanced technologies center with the University of Sherbrooke in Quebec and a center for the development of new engine technologies in Austria.
“I’m really, really excited about this,” Boisjoli said, “because I think there is more and more competition from low-cost countries” and the key to staying ahead of them is ensuring new BRP product is at least five years advanced from any technology that has been copied and put on the market.

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