UTV Market Overview

Call them UTVs, side-by-sides, ROVs or cash cows, the market for these machines has never been stronger.

Call them UTVs, side-by-sides, ROVs or cash cows, the market for these machines has never been stronger. At a time when many motorcycle manufacturers have slashed R&D and slowed new model introductions to a standstill in order to help dealers get out from under non-current inventory, more innovative new product has entered the SxS scene in the past 24 months than ever in the history of the market segment. In fact, Polaris posted 20 percent growth in UTV sales for Q2 2012, and this was before unveiling the all-new 2013 Jagged X models! Not to be outdone, normally agrarian minded John Deere looked to take a big bite out of the sport UTV market with its Gator RSX850i, and then Can-Am took the wraps off its new Maverick 1000cc machine at the Sand Sports Super Show last fall.

While the Motorcycle Industry Council (MIC) does not include UTV sales in its quarterly reports, the numbers have historically mirrored ATV sales and recently, industry estimates have the UTV market selling as many, or more, total units. With that caveat in place, it is relatively safe to say UTV sales continued to increase in 2012. The most recently reported MIC sales numbers show ATV sales up 3.1 percent for Q3, following a 5.6 percent gain in Q2. Using this benchmark, total UTV new unit sales should be pushing the 175,000 mark.
Anecdotal aftermarket numbers augment the OEM sales gain. “We saw same-store sales blow through last year’s total numbers as early as August,” reports DragonFire sales manager Brice Ginn. “We kept the heat on through the holiday sales season, and I can say we exceeded our own ambitious sales goals for 2012. Honestly, it looks like the market will be even better in 2013.” This is certainly good news for dealers selling into this market niche.

While the big bore sport-oriented machinery such as Arctic Cat’s 1000cc Wildcat and the Can-Am Maverick (which shamelessly touts its 101 horsepower) grabs all the enthusiast magazine covers and makes for exciting video clips on YouTube, the sales increases have a solid underpinning in their utility roots. This fact is not lost on the aftermarket like the aforementioned DragonFire, which unveiled its RockSolid line of Safari racks, winch mounts and other accessories to cater to their utility customers. Some of the OEMs see the value of this strategy as well, notably KYMCO’s UXV series, Kawasaki with the release of the Teryx 4 750 and Yamaha with something new pending for 2013.

“It is no secret to our dealers,” says Yamaha ATV/SxS group marketing manager Steve Nessl. Last September, Yamaha announced to its dealers that a new SxS is coming in 2013 at the same time as the wraps were coming off their stealthy “Tactical Black” special edition Rhinos. “Yamaha is more involved in the outdoors than any other manufacturer and has developed the new Tactical Black Special Edition Rhino models based on the fast growing tactical enthusiast trend,” explains Nessl. However this is just a hint of what is coming later this year. “Remember, the meat of the market is in the hunting/fishing/farming/utility aspect of a UTV,” he quips.

Of course, Yamaha is no stranger to the performance side of things. The racing side of UTVs was pioneered by Cory Sappington of Desert Toyz Motorsports in Peoria, Ariz., when he prevailed upon Best In The Desert race promoter Casey Folks to let him enter his wife’s race-prepped Rhino in the annual Vegas To Reno race back in August of 2005. Although the Desert Toyz entry played out before the finish line, the die was cast.

By 2008, Polaris had created the RZR platform for more sporting applications, and in 2009, Matt Parks from Polaris teamed with Scorpion Helmets founder Eric Anderson to win the UTV class at SCORE’s Baja 250. This was the first time in history that any side-by-side had finished a major off-road race and marked a turning point in the sport. With the added excitement came the inclusion of UTV classes in CORR, Best In The Desert, LOORS and King Of The Hammers. Most recently, Robby Gordon’s new stadium series will feature UTV classes, and SCORE has added Pro Stock UTV for 2013.

After several years of running a Sportsman UTV class, SCORE is adding the Pro Stock UTV for 4-wheel, two-seat and four-seat (maximum two occupants) OEM UTV vehicles. The vehicles must use stock UTV motors with a minimum production of 500 units. “Our goal was to respond to the racers’ requests for these classes that will give a fairly level playing field for what will be exciting classes to watch and to race in,” says SCORE tech director Bill Savage.

“While we understand the bulk of the UTV sales are for their OEM-intended utility applications, you have to remember it is human nature to go racing,” adds Chris Moore, DragonFire’s marketing go-to guy. “Our own company roots are in racing, and our RacePace competition-oriented accessories are still very popular. DragonFire is also proud to have SFI-approval for its five-point competition harness restraints, which make them legal for virtually any major racing series.”

Regardless if it’s racing, recreation, hunting, farming, fishing or actual utility applications, the bottom line is that all these forms of usage can contribute to your bottom line. If you aren’t already exploring the UTV market, you might be missing out on the race to bolster your bottom line. 

XY Powersports Offers A View From The Other Side Of The Fence

After more than a decade in the import/export industry and a player in the UTV field since 2009, it might not be fair to call XY Powersports a “rookie” in the game, but they certainly offer a different perspective than the major leaguers like Yamaha and Polaris. They also have bucked the trend of many off-shore sourced UTV brands by not only surviving, but thriving. We had an opportunity to get the view from the other side of the fence from company president Steve Claybourn.

“The idea to launch XY Powersports originated in 2006 with the commitment to produce high quality UTVs in China and distribute them through high standard licensed dealers serving the U.S. powersports market,” explains Steve. “I don’t know of another company like ours that can make the same claim.” He points out the secret to XY’s success has been to go in its own direction.

“We focus on the walk-away business those customers who give up shopping for the major branded product. Because those brands are so expensive, the industry states that only about 20 percent of the shoppers actually buy. That leaves a huge opportunity for those who will focus on this walk-away business.” Of course if it was easy, why isn’t everyone succeeding with this strategy?

“It is more challenging,” Claybourn concedes. “Partly because of the stigma of Chinese quality concerns.” However, rigid quality control standards and an evolving manufacturing mentality in China has helped changed the negative perception. “We add substantial value due to our commitment to quality, our factory collaboration to produce quality and the fact that we inventory a large supply of spare parts.” Of course, the other half of the battle has been waged in the trenches on the dealership level.

“We are expanding our dealer base carefully,” Steve says, noting the operative term is “expanding.” “We’re trying to secure more established dealers, and they like the margins we offer. We recognized 10 years ago and are convinced today that there is opportunity to succeed if we can deliver quality product and support based on the demands of dealers and consumers here in the U.S. We’ve always known that we needed to work in partnership with a manufacturing resource that recognizes the opportunity in the U.S. market and with the dealers to help to guide our progress. We have cultivated that relationship with our manufacturing partner addressing the weaknesses in previous production practices, and we are now partnered with many dealers of differing profiles that are having success with our products.”

This ability to see what the market needs and how to get the product to fill the niche gives Claybourn a great perspective. So what will the market see? He tells dealers, “The trend we see is that the major brands are going to continue to build expensive machines but they are also continuing to offer models in the 400cc and 500cc range to capture the lower end market.” Does that leave a gap in the middle for XY? Absolutely! Especially in the utility end of the industry.

“Our hardcore, purpose-built “Big Iron” UTV is a no frills utility machine. Most customers love it for just that reason,” notes Steve. “Its practical for hunting, farming and all sorts of utility applications. And, It is well-priced at around $11,000.”

Price it right, develop a solid dealer network, resolve any quality control issues and live up to customer expectations sounds pretty simple when Steve explains the XY Powersports game plan, doesn’t it?

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