Textron Specialized Vehicles Welcomes Arctic Cat and Outlines the Future

Just one day prior to Arctic Cat being bought by Textron Specialized Vehicles, Eric Mercer, the owner of Velocity Powersports in Victoria, Texas, made the tough decision to terminate the Arctic Cat line from his dealership.

“If I knew that was going to happen I wouldn’t have gotten rid of it,” Mercer says. Velocity Powersports already carried a good meld of Textron products such as Bad Boy Off Road and E-Z-GO golf cars, but Arctic Cat vehicles weren’t moving as well.

“I’m now looking forward to seeing the evolution of the two companies,” he says. “Arctic Cat has great value and Textron has a strong footing. The weaknesses and strengths of each company play off one another.”

Mercer is a prime example of the type of dealer that Textron Specialized Vehicles (TSV) included at its most recent event following the Arctic Cat acquisition to build-up advocates for the reinvigorated brands and garner excitement around the future of the vehicles under the TSV umbrella.

This first dealer event of what will be eight regional events through May, took place on April 19 in Fort Worth, Texas at Fort Worth Alliance Airport inside a private hangar filled with numerous TSV vehicles. Arctic Cat dirt and snow products stood alongside the Textron Off Road Stampede side-by-side and an array of E-Z-GO personal transportation vehicles. Flanking the presentation stage were a Bell 407GXP helicopter and the Textron AirLand Scorpion, a tactical jet aircraft.

The day would include a presentation for Textron Specialized Vehicles’ (TSV) dealer network to announce plans for growth as it incorporates Arctic Cat into the company, including its future powersports brand portfolio, and a tease of new and upcoming products across its snowmobile, side-by-side and ATV product lines.

“If you notice, there aren’t a ton of you here,” says John Collins, TSV vice president, consumer. “There’s a reason for that. We reached out to those dealers we felt could be strong advocates for the new Textron Off Road brand and the new engineering work and products coming out of the snow business and dirt business and could become disciples to carry the message to the broader dealer base.”

TSV acquired Arctic Cat in early March for $247 million. In the time since, TSV has been working to incorporate Arctic Cat into Textron and developing the product portfolio, branding and organizational structure.

“What Textron really liked about Arctic Cat was the fantastic product line up, the fantastic portfolio of brands and a good group of talent within the organization that we felt could help build our powersports business,” Collins says. “There was a lot that Textron admired about Arctic Cat. We liked Arctic Cat’s independent spirit and the company had a well-respected brand and well-respected sub brands too. We felt that the broad portfolio of product would be a good addition
to Textron.”

Since the deal closed in March, the two companies have had conversations, which have led to a brand strategy.  “The family is growing, and today culminates a lot of hard work,” says Kevin Holleran, TSV president and CEO. “When we acquired Arctic Cat we were already organized into business units. With Arctic Cat coming in we decided to create a separate vertical for snow, which Erik [Nelson] is overseeing.”

TSV announced that moving forward, the company will transition all side-by-sides and ATVs to become part of the Textron Off Road brand. However, the iconic Arctic Cat brand in snowmobiles will remain for that product line.

The decision to rebrand side-by-sides and ATVs under the Textron Off Road name was not taken lightly, and was the result of consultation and research with consumers and dealers that showed the Textron Off Road brand offered the best opportunity for future growth across all regions, particularly outside of the snow belt.

“We didn’t do it just from a corporate standpoint, we went out and talked to dealers and talked to consumers to make sure that we were doing the right thing to grow our businesses,” Collins says. “Kevin has done a lot on his side to start structuring the leadership team. On the sales side, we recently announced a new sales structure so folks who in the past would have been calling on Arctic Cat dealers and similar people in the channel calling on E-Z-GO and Textron dealers are now consolidated.”

Collins continues: “There is still work going on from a marketing standpoint and a manufacturing standpoint. Those other structures are still being worked on. What you saw today was an important part of consolidating the dealer channel. That was another thing we liked about this acquisition – it was a very complimentary dealer channel.”

Despite Arctic Cat moving under the Textron Off Road brand on the dirt side, the snow side will remain Arctic Cat and TSV made it clear the name will not go away.

“We are not even contemplating that at all, and I would not welcome someone suggesting that,” Holleran says. “The Arctic Cat name has 62 years behind it and is a pioneer in this space. We value and covet that.”

According to Erik Nelson, TSV president and general manager, snow and international, the snow side hasn’t changed outside of now being its own vertical within Textron.

“We are in the growth stage right now and aligning with some new engineers and leveraging the resources that the engineering staff of Textron has for our new product line,” Nelson says. “Textron is showing commitment and resolve in the powersports industry and made the investment in Arctic Cat to win big in this industry.”

While the Artic Cat will still be plastered on snow products, Bad Boy Off Road was going to change to Textron Off Road with or without the acquisition of Arctic Cat.

“Now that we have access to all these other products it gives us an opportunity to show more scale putting the dirt products under the Textron Off Road name,” Holleran says. “While it might be a small step back moving Arctic Cat dirt products into Textron Off Road because of the brand awareness it has, in the long run this is absolutely the right decision to be able to tell the story of where

Textron Off Road comes from. This is an industry we participate in and we are leaders. On the vehicle itself it may appear that this is just a name change, but in terms of resources and scale and engineering expertise, it proves it’s more than a moniker change. It’s a broader shift in our strategy.”

For each future product there is a date on the calendar that’s driven by some logic, whether it’s a model year change or a new product introduction that will be a phased approach where all the dirt products will be converted over systematically to Textron Off Road.

Arctic Cat’s legacy and heritage in side-by-sides and ATVs will live on in the Alterra, Wildcat and Prowler products, which will join Textron Off Road’s existing Stampede side-by-side in the company’s family of off-road vehicles.

During the presentation at Alliance Airport, Collins revealed a sneak peek of the next Textron Off Road-branded side-by-side, to be released this fall. As yet unnamed, this new “crossover” vehicle will bridge the gap between utility side-by-sides and sport models, with 100-plus horsepower, high performance suspension set apart by King Shocks, bucket seats and an extended cab with lots of usable storage.

In addition, Collins announced more details of the next-generation Wildcat sport side-by-side, the Wildcat XX, which will be released in spring 2018. Powered by a 998cc triple engine generating 125hp, the Wildcat XX will also feature a suspension with King Shocks and 18-inches of suspension travel, 30-inch tires on 15-inch KMC wheels, and full doors.

New Arctic Cat snowmobiles such as the M 8000 and ZR 8000, with the new 800cc C-TEC2 two-stroke twin engine, and the ZR200 youth model, were teased to generate interest from enthusiasts in advance of the winter season.

Not to be left out of the conversation, the E-Z-GO line was presented as an opportunity that many dealers are currently missing out on.

“Carrying all three of these brands, and attracting each of their distinct customer bases, can create a truly unique opportunity for growth,” Collins explains. “E-Z-GO brings you a value proposition you do not currently have in your dealership today. We sell tens of thousands of these vehicles a year and you’re currently getting none of it. Don’t turn you’re nose up at this opportunity.”

E-Z-GO vehicles are prevalent in beach communities, RV parks, campgrounds, etc. and are focused on a good, affluent customer. There are also great profit opportunities with aftermarket add-ons for E-Z-GO and for servicing these vehicles, according to Collins.

Mercer of Velocity Powersports may have cut Arctic Cat a day too soon, but he carries the E-Z-GO line, which has performed very well for him this year already.

“In the first quarter this year I’ve sold more golf carts than any other line combined,” Mercer says. “One buyer bought 60. I currently have other deals pending for orders upwards of 100 more.”

To clear the way for these new products from Textron Off Road, TSV reminded dealers of the recent No Brainer Sales Event to move older inventory.

“We are very committed to a healthy dealer channel,” Collins adds. “We have put our money where our mouth is, and our expectation is that dealers are filling that old inventory with good products they can sell and be successful with. We believe that the portfolio of products we are bringing from Stampede to the unnamed future vehicle and the Wildcat XX and the E-Z-GO line is a value proposition that no other competitor can bring. Dealers need to understand that we are bringing them a very unique opportunity and we’re backing it with the purging of old inventory. We see this as a first move by the new consolidated company to provide real opportunity.”

Holleran echoed those remarks by stressing the opportunity for growth in the market worldwide.

“We need more points of light in the market, and not just in North America, but in Europe and the rest of the world,” Holleran says. “This strategy grows from having a healthier channel that transacts with us, but also from distribution channel management we will attract more points of light. We have to work on ensuring that these two product plans, which have worked independently, prove to the market that there is more behind Textron Off Road and Arctic Cat. We do have some performance gaps and horsepower gaps, so we have to bolster the product and work to have market-leading products in each of these customer segments.”

Following the day’s presentations it was clear that TSV was “all in” on its decision to buy Arctic Cat and to deliver a better product to the market. TSV will now reap the rewards and be big player in the powersports space.

“We are committed to being a powersports powerhouse that’s second to none,” notes Collins. “We’re heavily invested in winning, and dealers are invited to participate.”