news article


According to this article, a/c will make their own 650 cc, hemi head single cylinder motor, for upcoming quad. I wonder if suzi or kawi will get it too.





REGIONAL BUSINESS: Arctic Cat plans to make new engine in TRF

Company reports increased sales
By Tu-Uyen Tran
Herald Staff Writer


Arctic Cat of Thief River Falls will be entering the engine manufacturing business for the first time this year, the company announced Thursday.

The engines would go into some of Arctic Cat's all-terrain vehicles, a move that chairman and chief executive Christopher Twomey said would allow the company to be more responsive to customers.

"We just want a little control over our own destiny," he said. Arctic Cat would continue to buy many of its engines from Suzuki and Kawasaki, its current vendors, he said.

The engines would be made at a 24,000-square-foot refurbished Arctic Cat facility in Thief River Falls. The facility, its workers and the total research and development effort is expected to cost $10 million by the end of the year, according to Twomey.

Also Thursday, Arctic Cat released year-end financial results for its fiscal year 2004, ending March 31. Sales were up 13 percent over 2003, but earnings were down 7 percent, according to the company. ATV sales led growth with a 25 percent increase in sales.

Arctic Cat employs about 1,800 people, most of them in Thief River Falls. Company (Nasdaq: ACAT) shares ended Thursday at $21.32, down 8.4 percent for the day.

New engine

Arctic Cat decided to make its own engines about four years ago, creating the ATV engine division made up of both existing employees and engineers from what it calls "well-known German engine design firms."

The end result of this investment is the 650 H1, a single-cylinder, 641cc four-stroke engine that would go into its 650 series of utility ATVs. The 650 H1 would allow the 650 line, which currently are equipped with twin-cylinder engines, to branch into single-cylinder engines.

"H," by the way, is a reference to the hemispherical-shaped cylinder head.

Though Arctic Cat officials say they are not dissatisfied with their existing suppliers, they said those suppliers do not design engines to the company's specifications. That means the company has to buy what's available, not what its customers want.

It's not clear if the 650 H1 would be all that different from other engines on the market, but it is a first step for Arctic Cat. In the long term, company officials hope they'll be able to make engines that they can't buy from suppliers.

Twomey said Arctic Cat likely would make other engines in the future for its other ATV lines. He said it will not make snowmobile engines, which it currently buys from Suzuki.

When an analyst asked if the company might make 100 percent of its ATV engines someday, Twomey said it was "definitely possible."

Engine manufacturing also could save Arctic Cat some money as well, according to Twomey. The company won't have to pay its suppliers' margins, can avoid currency fluctuations and, in sales in Canada, duties. North American-made engines avoid those duties, but Japanese engines don't.

Sales up; earnings down

Arctic Cat officials also reported record year-end results for fiscal year 2004. Sales totaled $649.6 million, up 13 percent from the year before.

It is the fourth consecutive year of record sales, according to Twomey, who attributed it to increased market penetration by its ATVs. He said it's the first year in which ATV revenues were higher than snowmobile revenues.

Poor snowfall in recent years has kept snowmobile sales slow industrywide. Snowmobile sales make up 42 percent of Arctic Cat's sales in fiscal year 2004. Its rival, Polaris Industries of Medina, Minn., reported that snowmobile sales made up only 14 percent of total sales in 2003.

But, while Polaris snowmobile sales dropped 22 percent between 2002 and 2003, Arctic Cat reported 5 percent growth in fiscal year 2004 compared with the same period a year ago.

With sales dropping across the industry, Twomey said that means Arctic Cat gained market share. He said it was not because of better snowfall this past winter though, because that came too late in the year.

Despite the higher revenues, Arctic Cat actually earned less the year before. Income totaled $30.4 million, 7 percent lower than in 2003. The main cause apparently was the cost of exiting the personal watercraft business.

Chief financial officer Tim Delmore said he anticipates fiscal year 2005 would see Arctic Cat increase revenues by 4 percent to 8 percent.

Twomey said he expected ATV sales would drive that growth.

 

Does anyone have any knowledge or Pros/Cons on this new accomplishment?

Thanks for your time,
eazy

 

Unless I missed something here, I don't see any mention of fuel injection, and to my way of thinking, that's the wave of the future. Polaris is making a big deal about THEIR fuel injection, and I would hope that's the direction for ALL manufacturers.

 

I wonder if they will share this with Suzi and Kawi, as in the new 700 single, coming from suzi next year. It would make sense, seeing how a/c benifits from the s/k engine developement, but it always seems to be a/c disavantage, they get the 650 v twin, but kawi gets 700. Suzi and kawi get the 400 first, then a year later a/c gets the dvx. Wouldnt surprise me if a/c gets the smaller hemi, this time too.

 

And at the same time that Suzuki is planning a 700cc single... maybe a little reverse sharing going on? Hope Cat learned from the Cannondale mess - building engines is not a simple thing to do.

At least they're getting back to the reliable CVT transmission that went in the 500 Cats. Put a 5 spd manual on it, and it would be even better.

 

Why do you say 5 speed manuals are better?
A properly tuned CVT transmision will out do a manual.

 

In your own opinion and in certain circumstances that might be true. But not in all. And preference is everything with this stuff anyway. 10 years ago, nobody gave a rats *** about an automatic. Thats all Polaris sold, and nobody else would touch it. Now thats all you can get with a big bore quad. I think they should come in both, that satisfies all, and keeps this auto vs. manual crap from being a topic of discussion. I would trade my Grizzly for a manual shift version as soon as they came out with it if the option was available.

 

Seemingly enough, I never had a limp mode problem with my 99 Arctic Cat 500.

 

You still haven't answered the question.

 

Maybe this will give their quads so extra kick. Those little suzuki 300 motors don't make a v good combination with the heavy frames articat makes