State of Affairs: Industry Ups and Downs

It’s no secret that the entire recreation industry is slow compared to years past and while your ATV Connection editors are anything but doom and gloom reporters, we do like to share industry trends so that consumers are aware of what’s going on behind the scenes.

Polaris Reports Decreased Sales in the 3rd Quarter

Polaris, for the first time in a while, Polaris has reported thet their Off-Road Vehicle (ORV) segment sales decreased 23 percent from the third quarter of 2015 to $923.4 million. Gross profit also decreased 40 percent to $231.3 million, or 25.1 percent of sales, in the third quarter of 2016, compared to $388.5 million, or 32.6 percent of sales, in the third quarter of 2015 due to higher warranty costs related to recent recall activity primarily for the Company’s RZR vehicles.

ORV wholegood sales decreased 25 percent to $619.0 million reflecting the Company’s decision to delay model year 2017 shipments, including the high margin RZR Turbo vehicles, in order to re-validate its new model line-up and protect dealer inventory levels. Compared to the 2015 third quarter, Polaris North American ORV unit retail sales were down high-single digit percents, consisting of consumer purchases for side-by-side vehicles down high-single digits percent and ATV retail sales down low-double digits percent. The North American ORV industry was down low-single digits percent compared to the third quarter last year. ORV dealer inventory was down 16 percent in the 2016 third quarter compared to the same period last year.

AIMExpo Sees Record Turnout

However, this trend seems to be counteracted by good news coming out the Orange County Convention Center (OCCC) that included a record number of consumer attendees at this year’s AIMExpo.

North America’s premier powersports trade show welcomed a combined 18,399 total attendees over the course of the four-day affair, highlighted by 12,029 consumer enthusiasts who filled the aisles and booths of the 451 exhibiting companies and numerous show features over the weekend.

AIMExpo’s global impact continued to resonate as well, with a total of 44 countries represented across all attendees. Counting international visitors and dealer/buyers, 6,370 trade attendees were on hand for B2B and I2I (Industry to Industry) business and networking during the four days of AIMExpo, including 3,029 exhibitor attendees and 630 industry personnel members. They were joined by 252 members of the media, who documented all the new model and product introductions for millions of enthusiasts around the world.

Collectively, the 18,000-plus attendees at AIMExpo 2016 contributed to more than 32 million social media impressions via Facebook, Instagram, Snapchat, Twitter, and YouTube. This growth of more than 10 million impressions year-to-year demonstrates AIMExpo attendees are more engaged than ever during their experience at the event, eagerly sharing their stories while interacting with other attendees and exhibitors.

Analysts Say Long Range Looks Good

Additionally, Globe Newswire, which has been following the trends for multiple years, reports that All Terrain Vehicle (ATV) market size is expected to reach USD 9.2 billion by 2024; according to a research report by Global Market Insights, Inc.

The report goes on to say that rising trends in recreational uses like off-roading, sports & racing will stimulate all terrain vehicle market size. Changing consumer lifestyle, demographics and developing tourist attractions are the key factors supporting industry growth. GPS & mobile tracking along with bluetooth connectivity enhances the whole experience.

Furthermore, introduction of next generation engines providing better fuel-efficiency and economy is expected to drive all terrain vehicle market size. Hybrid engines provide better control while riding due to lighter weight, and can travel longer distances due to the presence of an alternate power reserve.

Next generation ATVs offer customers with the choice of a propulsion system such as gas-electric, diesel-electric, or solar-electric drive trains. Various applications, such as defense and military explorations, require the utilization of propulsion systems by fuels, which are easily available.