Posts Tagged ‘SxS’

Surging Mower Sales: Good News for Powersports?

June 14, 2010

Joe Delmont

Now, that’s a good question.

If a homeowner is willing to pop for a $10,000 deluxe lawn mower, does that mean he’s likely to spend a similar amount for a motorcycle or a SxS vehicle this year? Or does it mean that the purchase of one fancy motor machine is enough for now? I don’t have the answer, but I just the fact that consumers are spending 10,000 bucks for a machine with more power and features than they need— really an unnecessary purchase— seems to bode well for our industry. It could be another positive sign of sales improvement over the next few months.

The Wall Street Journal today reports that after double digit decreases for the past two years, U.S. shipments of riding mowers are expected to climb more than six percent over the next two years. At John Deere, for example, sales are “far exceeding” forecasts, according to the story.

We’re not talking basic grass cutters here; the machines that sell have iPod compartments, chrome hub caps, comfortable seats, plenty of power and agility and sell for more than $10,000. “It goes well beyond cupholders,” notes a representative of the popular Cub Cadet brand.

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BRP’s New SxS Aims at Polaris’ RZR

June 7, 2010

Can-Am Commanders Feature Power, Performance, Utility

The Can-Am Commander 1000 X tops 72 mph with its 85 hp Rotax EFI V-twin.

BRP’s Can-Am Commander, the high powered 1000cc side-by-side vehicle that has had the market buzzing for weeks, finally was rolled out at the BRP dealer meeting in Reno last night.

There will be five models: the Commander 800R and 800XT and the Commander 1000, 100XT and 1000X. The X model gets the high performance package and special graphics.

So, what’s to add after all the Internet talk and spy photos? Some facts, a bit of perspective and a forecast, perhaps. I recently spoke at length with Yves Leduc, vice president and general manager for BRP’s North America Division, and others at the company and throughout the industry about the machine and its impact on this very important industry segment. Here’s what I found out and what I think the impact of this machine will have on the segment.

Yves Leduc

First of all, the folks in Valcourt are taking dead aim at their neighbors in Minnesota, and it sounds like they have the ammunition to make life difficult for Polaris, the makers of this year’s oh, so hot RZR.

Make no mistake, when BRP executives use the term, “no compromise” in describing the new Commander SxS family, they mean it’s going to outperform Polaris in every way possible. And from what I can gather—without having ridden or even seen the Commander first hand— they may have done just that.

Yamaha’s Rhino, the machine that launched the Rec-UT category, isn’t much of a player at this time, given consumer reluctance to get too close to the lawsuit-prone vehicle. And Yamaha hasn’t made any significant changes since the 2009 model year. So, it really comes down to BRP’s Commander against the Polaris RZR lineup.

One experienced off-road rider, who is very close to Polaris, says the Commander is a better performer, is better engineered and has better fit and finish. At about the same MSRP, that’s going to make a show floor buying decision pretty easy, even for die-hard Polaris fans.

Here’s just one pre-launch quote I pulled from a Polaris forum: “If they put a 900 Rotax in (the Commander), I would be tempted (to buy it).” Well, hello. The Commander 1000 comes with a 1000cc, EFI V-Twin Rotax. There you go.

And the Commander 1000X performance package carries an MSRP of $14,699 vs Ranger RZR S at $13,999 with only a 760cc EFI V-twin, generating 55 hp and a top speed of 63 mph. It has a carrying capacity of 300 lbs. The Commander generates 83 hp, has 600 lbs carrying capacity, 1,500 towing capacity, and a top speed of 72-mph to 75 mph, a BRP official told me. The RZR does have better ground clearance at 12.5 inches vs. 11 inches for the Commander, and the Commander is heavier at 1,200 lbs vs. 1,100 pounds for the RZR.

One interesting feature is the Commander’s two level cargo bed with a 600 lb carrying capacity, 400 lbs up, and another 200 lbs below in a lockable storage bin with a removable divider.

Here’s another unique engineering twist: Both passenger and driver seats can be easily removed for free-standing use in the field. Why sit on the ground, when you can pull the padded seats from your SxS and relax in them? It’s one of those ideas, like, why didn’t I think of that?

BRP Rollout Plans

“We said at the end of 2007 that we would have a side-by-side in 2010, and here we are,” Yves Leduc, BRP’s Can-Am chief, told me last week. “Despite the worst recession in history, we stayed the course. We could have postponed this project, but, instead, we made it a priority.”

Leduc likes the way the timing worked out. “If you compare our entry here with our ATV entry in 1999, it’s two different worlds. With ATVs, we entered a mature market with six very strong competitors.”

Now, BRP has several things going for it, says Leduc:

  • Very strong recognition for the Can-Am brand.
  • A dynamic and changing market segment for performance machines.
  • Limited competition, essentially only Polaris.
  • A unique segment that provides the best features of performance and utility machines.

“Clearly, we saw an opportunity to define the segment, a no compromise segment, when we started looking at this three years ago,” says Leduc. And it appears they did just that.

The Commander lineup, says BRP, feaures “the best handling in the industry” with power and work capacity. “It’s not an extreme sport vehicle,” says Leduc, “it’s a comfortable sport package, one that allows you to get the maximum out of the vehicle.”

BRP’s target buyer? “It’s the enthusiast; that’s clearly the buyer for the Can-Am, they tend to make it part of their lifestyle. That’s the emerging buyer for the SxS, many of whom never owned an ATV. We’re also targeting hunters and fishermen and large estate owners, who want the best.”

The Can-Am lineup will be rolled out to about two-thirds of the company’s dealer network in all states right away. He wouldn’t tell me how many dealers will receive machines or how many will be available this summer.

Limited distribution will begin in July, mostly to Quebec dealers, and demo rides are planned across the U.S. this summer. Full production will begin this fall in Mexico, accompanied by a major advertising blitz.

“The idea,” says Leduc, “is for us to get feedback from this first generation of users as we start shipping and adjust as we go along.”

At the same time that North American dealers get the machine, it will be launched internationally in all countries in which BRP has direct distribution, including Germany, Austria, the UK, France, Belgium, Luxembourg, Netherlands, Spain, Brazil, Mexico, Australia, New-Zealand, and Japan. Then it will be sent to BRP’s authorized distributors, reaching a total of more than 50 countries.

The Can-Am Commander 1000 XT will be homologated for use on European roads.

BRP doesn’t have an electric model, nor a four-seater to match Polaris, and there aren’t any coming as part of this launch. “But,” says Leduc, “you can count on BRP continuing to improve the lineup.”

So, the battle is joined. JD

Contact me with news tips and story ideas at jdelmont@dealernews.com or 952/893-6876.

BRP Readies Launch of Hot SxS Lineup

May 31, 2010

New Models Could Be Released Within Two Weeks

You can spell the DNA of Canada’s BRP powersports manufacturer as EXCITEMENT. No conservative, working machines for this global OEM based in Valcourt, Quebec. It builds and sells the high performance Ski-Doo snowmobiles, Sea-Doo watercraft, and Can-Am ATVs, and the category building, on-road three-wheel Spyder.

So, when we start talking about BRP launching a line-up of side-by-side machines, we’re not talking about another lawn tractor. We’re talking about something like Polaris‘s very hot RZR UTV. Expect to see the new models from BRP before mid-June.

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Proposed Rules Could Severely Restrict UTV Use

March 4, 2010

We have until March 15 to comment on these
CPSC rules that could virtually ban UTVs.

Have you commented yet? If not, you should.

Here are the details.

The CPSC’s proposed mandatory standards spell out how off-road vehicles must be designed, manufactured and used by riders. Meanwhile, at the same time that the CPSC is pushing its rules, the industry has been developing its own voluntary standards.

Paul Vitrano

If you think government mandated standards will benefit our industry, then you don’t have to do anything. If, however, you think perhaps the industry can produce more effective standards, now is the time to step up and make your thoughts known.

A unit of the MIC, the Recreational Off-Highway Vehicle Association (ROHVA), has created new tools for riders and dealers to easily submit comments. You can do it at http://www.rohva.org/anpr.

The sample letters urge CPSC to work with ROHVA to implement voluntary standards and to promote the safety rules for ROVs, also called SXS or UTV units. The page also contains explanations of ROHVA’s position on ROV standards and links to important documents.

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Don’t Look for Big Improvements in 2010

January 7, 2010

Personal, Business Bankruptcies Increase

Despite the Increasingly upbeat talk from Washington, I don’t see turnaround in 2010. And neither do a group of economists surveyed in January by the Wall Street Journal (WSJ) newspaper. The consensus: The U.S. economy will perform as poorly this decade as it did during the last one which marked the worst performance since the 1930s. The recovery seen by some in the last half of 2009 was driven in large part by government stimulus programs, which will be cut back this year. And as cautious Americans are saving more, they’re spending less on big ticket toys such as motorcycles.

“It’s easy to be dismal about the U.S. economy,” said one economist, whose outlook was seconded by another: “We’re not likely to have robust growth anytime soon.” The one bright spot cited by several economists was strength in places such as China and India, which could stimulate U.S. exports. Unfortunately, I don’t see that helping the U.S. powersports industry much, expect for OEMs like Harley-Davidson and Polaris, which have made moves in both those countries. BRP also could stand to benefit from growth outside the U.S. because of its strong international base.

The turbulence that began in the powersports industry in 2008 continued last year and will drag on through 2010, I believe. The same problems that existed last year— lack of sufficient consumer and business credit, weakened consumer confidence, a languishing housing market, lack of any meaningful new powersports products, excessive non-current inventory at the dealer level, and increased fumbling by the federal government— will continue in 2010, dampening any hope of a substantial recovery in our industry this year.

In a nutshell, I see more of the same lackluster performance for our industry in 2010 that we saw last year, and I don’t look for any real improvement in the problems that plague consumers and small businesses until 2011 or perhaps 4Q 2010, at best.

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Investors In Powersports Stocks Enjoyed 2009

December 31, 2009

Harley, Polaris, Arctic Cat Post Hefty Gains

Investors who placed bets on the powersports industry last year at this time— and held steady for the ride through the year— have reason to celebrate tonight. I checked the performance of three of the leading powersports stocks this year—Harley-Davidson (HOG), Polaris Industries (PII), and Arctic Cat (ACAT) and each of them outperformed the Dow Jones Industrial Average (DJIA) by a wide margin in two cases and matching it in the last one.

It wasn’t a smooth ride, however, and it took a firm hand to stay in the game through the sharp downtown in the first quarter.  For example, while the Dow lost 13% in value during the first two months of 2008, Polaris lost 25%, Harley  dropped 21%, and Arctic Cat slipped 20%.

For the year, though, the Dow climbed 1,772 points from 8,776 on Dec. 31, 2008, to 10,548 at the close yesterday. That’s a 20% jump. During the last 52 weeks, the Dow ranged from a low of 6,440 to a high of 10,605.

Polaris, the Minneapolis-based manufacturer of ATVs, UTVs, motorcycles, snowmobiles and electric vehicles, posted the biggest dollar gain during the last year of the three companies I looked at. Polaris common moved from $28.65 on Dec. 31, 2008, to $43 at the close yesterday. That’s a gain of $14.35, or 50.1% over the year. Its 52-week performance ranged from $14.53 to a high of $49.74.

If you would have purchased 1,000 shares of Polaris common stock one year ago, your investment would have gained $28,650, not considering quarterly dividends nor any sales commissions. Now, wouldn’t that provide a nice party tonight.

Securities analysts who follow the Polaris stock like the management team lead by new CEO Scott Wine, and Bennett Morgan, president and COO, and a long-time Polaris executive. When talking about Polaris, investors also talk about its ability to quickly bring new products to market, its efficient operations that emphasize cost controls, and its growing ability to control inventories at the dealer level through its Max Velocity Program (MVP) which allows dealers increased ordering flexibility.

Harley-Davidson gained $8.53, or 50.3%, climbing from $16.97 at the close on Dec. 31, 2008, to $25.50 at yesterday’s close. Harley investors had perhaps the toughest time waiting calmly for gains on the HOG stock as the company reworked its operations in several major steps.

One move with immediate and long-term implications was  the new contract it won with workers at its York, PA, plant that  permits the company to cut loose nearly half the 2,000 employee York work force and move ahead with major physical improvements in the plant. The plant modernization will be aided by a stimulus package from the state of Pennsylvania. Harley said at one point that it was considering relocating the operation to Kentucky.

In its second big reorganizational move, Harley dumped its MVAgusta operation and it closed its Buell sport bike business.

During the 2009 52-week period, Harley stock ranged from a low of $7.99 to a high of $30.00

Arctic Cat common stock is played at a much lower level than either Polaris or Harley, but it, too, posted a nice gain of 20% during the period Dec. 31,  2008, to Dec. 30, 2009. It climbed $4.16 for the year, moving from $4.79 in December 2008 to $8.95 yesterday.

Cat had a tough year, partly because of its dependence on snowmobiles and partly because of the loss of Gander Mountain, its high visibility outdoors retail chain based in Minneapolis. Gander had been carrying Arctic’s ATV and SXS lineup in its major stores. Arctic stock ranged from a low of $2.40 to a high of $9.27 during the last 52 weeks.

Okay, so now you’re probably waiting for my forecast on the performance of these stocks in 2010. Sorry, I don’t have one. After reporting on publicly traded stock for more than 40 years, I’ve come up with one basic rule: Stock market performance doesn’t always reflect corporate performance, especially when you try to tie it to a specific quarter or other reporting period. I don’t have a clue how these three stocks, or the Dow, for that matter, might perform over the next four quarters. And if I did know,  I wouldn’t give that information away; I would charge a lot of money for it. Isn’t that what investment advisors do?

Happy New Year and good luck with your investment decisions. I hope your powersports stocks perform well for you in 2010 as these three stocks did in 2009. JD

Contact me with news tips and story ideas at
976/893-6876 or joe@powersportsupdate.com

New Polaris On-Road Division Raises Questions

May 18, 2009

What New Products Will It Announce For This Division?
What Role Will Mark Blackwell Really Play?

Joe Delmont

Joe Delmont

The announcement today by Polaris Industries, Medina, Minn., that it is launching an “on-road vehicle division” is interesting from several perspectives.

Perhaps the most intriguing question the move raises is this: What new products will the innovative Minnesota OEM produce to fit into this segment alongside its popular Victory motorcycles? The move looks to bring the company one step closer to the “adjacent” industry that company executives have been talking about for several years.

Former Polaris CEO Tom Tiller often talked about the company’s planned move into “adjacent” industries— ones that could use Polaris’ existing technology and/or sell to its existing customer base.

Tiller’s replacement, Scott Wine, told analysts in April that,  “We remain on-track to announce a second adjacency later this year,” adding, “long-term, we’ve scaled back a little bit of our research and development in Victory and shifted some of those resources and funding to the front end of our business”

And Polaris President Bennett Morgan responded to an analyst’s question with: “We believe we’ve got some nice innovation coming in this adjacency that we are not talking about as well. So, we’ve got lots of good stuff….”

Indeed, Polaris did move outside the powersports industry recently when it signed a strategic alliance with Bobcat to jointly develop Bobcat branded products that will be introduced next year.

So, here’s what you might look for from Polaris to include in its new On-Road Vehicle Portfolio alongside Victory perhaps as soon as next month:

  1. An electric vehicle, probably a SXS model with two-wheel drive, that can be used in gated communities and other neighborhood developments. There’s been a lot of talk about electric vehicles, but so far nobody’s come up with a practical, efficient and economical machine. Perhaps Polaris, a company that prides itself on its innovation, can be the one to do so.
  2. A scooter, probably one in the 150cc size. We know that Polaris has been sourcing one in China for close to a year, so it wouldn’t be surprising to see them introduce one at the beginning of this scooter season.
  3. A sport bike to capture the strong youth market and its desire for speed and performance. This may be a bit of a stretch, but there are reasons to believe it could happen. First, speed and performance are features that Polaris offers on the snow side and in its radically hot RZR side-by-side vehicle. And a top Polaris executive who has been added to the on-road group, Mark Blackwell, has a record as a champion racer. Even though he’s guided the successful growth of Victory, Mark’s comfort level may be closer to the sport bike than to the cruiser. In its announcement, Polaris noted that Blackwell’s “deep knowledge of products and markets in the motorcycle industry will continue to be an invaluable asset to the Victory brand and all other on-road vehicles.” (My italics added.)

The one problem with each of these products, though, is this: Can Polaris teach its dealers to sell these products, ones that are radically different from the Victory and from Polaris’ off-road products?

Staffing Questions

As part of the new organization, Blackwell has been named vice president of motorcycles. Meanwhile, Mike Jonikas, vice president of sales and corporate marketing, has been named vice president of the On-Road Vehicle Division; he’ll be responsible for growing the division. In a related move, Steve Menneto has been named general manger of Victory Motorcycles.

The question here is: How much responsibility will Blackwell have? In the recent past, he’s worn several hats for Polaris, at one time running both the Victory and International operations simultaneously. Hmmm, perhaps the sport bike idea isn’t so far off after all.

We’ll find out soon how this all plays out. Guido Ebert, the senior editor at Dealernews magazine, has a meeting scheduled at Polaris this week. It will be very interesting to hear what he finds out. JD

Contact me with news tips and story ideas
at 952/893-6876 or joe@powersportsupdate.com

Motion Filed to Consolidate Yamaha Rhino Suits

January 2, 2009

A motion has been filed with the U.S. Judicial Panel on Multidistrict Litigation to consolidate and centralize product liability lawsuits related to the Yamaha Rhino. Although Yamaha has not confirmed how many cases have been filed by injured riders, estimates suggest that more than 200 lawsuits against the Rhino are currently pending in various state courts and federal courts throughout the country.

Several plaintiffs who have pending cases are requesting that 57 Rhino ATV lawsuits be transferred from

Yamaha markets five Rhino models for 2009. The units sell for a suggested retail price of between $8,499 and $12,399.

Yamaha markets five Rhino models for 2009. The units sell for a suggested retail price of between $8,499 and $12,399.

33 different U.S. District Courts to one court where they will be coordinated as part of an MDL, or Multidistrict Litigation. An MDL is a federal procedure that allows multiple cases with common underlying facts to be consolidated for pretrial litigation. An MDL is often granted in cases where it will help avoid duplicative discovery, eliminate inconsistent rulings, conserve the resources of the parties and the court, and serve the convenience of the parties and witnesses.

The Yamaha Rhino was first introduced in 2003. The product liability lawsuits all allege that design defects in the side-by-side ATV caused the vehicle to rollover, resulting in serious and debilitating injuries for riders. The lawsuits allege that the Rhino was negligently designed with a narrow wheelbase, high center of gravity, small turning radius and powerful engine, which combine to make the vehicle inherently unstable.

In September 2006, Yamaha sent a letter to owners acknowledging the risk of rollovers. In the letter, they outlined that riders should be careful to keep their arms and legs inside the vehicle during a rollover. The OEM began offering doors and additional passenger handlebars in 2007.

The Judicial Panel on Multidistrict Litigation will consider the Motion filed by some of the plaintiffs to form a Yamaha Rhino ATV Products Liability MDL at a hearing scheduled for January 29 at the U.S. Courthouse and Federal Building in Fort Myers, Fla.

Baltimore-based Saiontz, Kirk & Miles, P.A.
 is among the many law firms pursuing litigation. Saiontz, Kirk & Miles, P.A has more information pertaining to the Yamaha Rhino suits at its website, AboutLawsuits.com.