24 • August 2023 • Powersports Business

Expanding inventories , difficult business climate promote uncertainty

BY GREG BOEDER & GUIDO EBERT CONTRIBUTING WRITERS

In 2022 , the North American UTV market dropped in volume – by 5.6 percent to just under 550,000 units – the second straight year . The market has experienced a downturn following 10 years of growth , 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 defines 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 for 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 Polaris RZR .

Based upon PPM analysis , Polaris Industries continued to lead the market last year , followed distantly by Can-Am , Kawasaki , Deere and Honda .

Of the 10 best-selling UTVs in 2022 , four were Polaris models that together accounted for 7.2 percent of the total market volume . Those four Polaris machines were joined in the top−10 by the Deere XUV 835 , the Hisun Axis 500 , Kawasaki Mule PRO-FXT , Can- Am Defender MAX , Can-Am Maverick X3 MAX and Kawasaki Mule PRO-MX . All 10 vehicles together accounted for approx . 18.6 percent of the total market volume .

According to PPM research , Utility Crossover Vehicles ( UCV ) accounted for 44 percent of the UTV market . These vehicle have become immensely popular over the past few years . Photo courtesy of Arctic Cat

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 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-passengers , carburetors , FI as well as EFI , and include all diesels .

RUVs feature speeds of 42−55 mph , 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 52−70 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-passengers , bucket seats and 4WD .

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

According to PPM research , UCVs are responsible for 44 percent of the North American UTV market , SSVs account for 17 percent , RUVs hold 15 percent , and PUVs maintain a 13 percent share . SRVs slide in with 7 percent of the market while EUVs hold a 4 percent 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 550,000 UTVs retailed in North America in 2022 , PPM found consumer applications likely accounted for 89.3 percent of sales while commercial applications looked to be responsible for 10 percent of the total and government applications accounted for a mere 0.7 percent .

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 . 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 2022 , accounting for 34.3 percent of the total market . This was followed by Farmer / Rancher ( 26.7 percent ), Estate Use ( 11.3 percent ), Residential / Homestead Use ( 8.8 percent ) and Hunters ( 8.1 percent ).

Within the commercial application , results show Industrial Use accounted for 4.7 percent of the total market , followed by Other Turf ( 2.9 percent ), Golf ( 1.5 percent ) and Commercial Non-Turf ( 1.0 percent ).

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 Tier 2 powersports vehicle market . These include units mostly sourced from China and sold largely via the online marketplace , big-box outlets and independent retailers . And guess what ? PPM finds sales are booming for these second-tier brands .

While supply-chain issues haunted numerous established brands over the past couple of years , parts availability and shipping woes didn ’ t seem to impact many of these second-tier brands experiencing surging sales , as container after container filled with vehicles continued to arrive unabated at U . S . ports by these importers / distributors .

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 2022 , Hisun , CF Moto and Massimo again cracked the top 10 brands . How , and why ? PPM says it believes growth in a few of these brands correlates with their availability at big-box retailers , which have in recent years become a major outlet for lower-cost vehicles that couldn ’ t be found at traditional multi-line powersports dealerships .

Home Depot retails multiple models sourced from Hisun ; Lowe ’ s retails product from Hisun and Massimo ; Tractor Supply stocks multiple models of Coleman , BMS Motorsports and Massimo ; and Rural King offers product from Hisun .

According to PPM analysis , UTV retail sales from Tier 2 brand suppliers through big-box retail locations grew substantially last year , from what had been an average of 5−10,000 units in recent years to nearly 30,000 units in 2021 and more than 44,500 units in 2022 as consumer demand for UTVs exceeded what traditional major manufacturers could supply .

NEIGHBORHOOD ELECTRIC VEHICLES

Another segment that benefitted once major OEMs became unable to supply UTV product to hungry consumers was the Neighborhood Electric Vehicle ( NEV ) market , which includes street-legal electric golf cars modified to serve as Personal Transport Vehicles ( PTVs ) limited to 19 mph or Low-Speed Vehicles ( LSVs ) limited to 25 mph .

Demand for UTVs was so high during the height of the Covid−19 pandemic , PPM reported that many consumers searching for hard-to-find lower-cost models instead opted to purchase NEVs instead , outfitting these units with lift kits and off-road wheel and tire sets .

NEV sales for 2022 totaled approximately 305,000 units , up an impressive 44 percent from 212,000 units in 2021 , which was up 51 percent from 140,525 units in 2020 . This signifies nine years of growth for the market , which experienced a low of 69,475 units in 2013 .

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 Tier 2 importers / distributors making waves in the market with product sourced from China . Among the leading newcomers are brands like EVolution Electric Vehicles , ICON EV and Bintelli , each making great strides in market share .