Mega-trends in the ATV industry in 2008
Changing consumer demands will require technology and marketing savvy
Story by Gary Gustafson, Dec. 14, 2007
The ATV industry—comprising youth, sport and utility vehicles—has matured into a multi-faceted, highly competitive business. Four-wheelers were once considered a child of the motorcycle industry, but they have now grown to surpass their 2-wheeled siblings in annual sales in North America.
Several key elements are shaping it in 2008:
The ATV industry is under an all-out assault from ‘anti’ groups that want quads and OHVs banned from public land. In a few cases, restrictions are warranted because of abuse and riders disrespecting the property of others. The vast majority of land closures, though, are punitive in nature. ATV Riders seem to be the victim of sheer bigotry. For example, on the Roseau River Wildlife Refuge in northwestern Minnesota, four-wheel-drive trucks continue to be allowed on some roads and trails, but off-highway vehicles have been banned completely from these same trails. No evidence was presented by the DNR that OHVs were causing more damage than trucks; they simply declared OHVs mechana non grata.
This public relations imbalance means that millions more acres of public land are being closed to ATV use every year. We are witnessing the largest closure of public lands to legal users in history. More than 100 million acres of public forests in the United States are in the process of having OHV access closed or severely restricted. The same situation is occurring in Canada, where urban populations carry most of the clout in federal and provincial governments. When ATV advocates roll up their sleeves and get involved, though, good things happen. In some states, quad ‘parks’ are opening that will help maintain some public land riding opportunities. The Hatfield-McCoy trail in the American southeast is a stunning achievement earned by very hard work. But, overall, the trail closure tsunami rolls on, and there is no question that such massive closures are having a negative impact on businesses that rely on ATV sales. The manufacturers need to grow a lobbying group to ensure the future of the sport.
There is a silver lining in the cloud, at least for now. The saving grace for Polaris, Yamaha and other major brands has been UTV sales. The explosion in the UTV market has revealed an underestimated customer base: private land-owners. Many UTVs are not feasible or even legal to drive on public trails due to their width and weight. But farmers, ranchers and hunters love them because they can drive UTVs to places on their land that they wouldn’t dare to take their King Ranch Special Edition pickup truck. UTVs are the vehicle of choice for many weekend cowboys, gentleman farmers and construction workers. The growth in UTV sales has occurred so fast that it clouds the ability to predict the market saturation point. However, it is hard to envision UTV sales ever matching what ATV sales were at their historic peak, so private landowners will probably never replace the numbers of riders who once relied on public trails.
Honda and Yamaha both added power steering to some of their 2007 ATV models. This announcement is the latest in a string of recent technology advances in the market. Fortunately for quad enthusiasts, there is no end in sight to this engineering binge. The age of the sparingly equipped 4-wheeler has passed. To compete in the ATV market today, an OEM must offer advanced, value-added features that address common consumer needs while still differentiating their models from the competition. The table below helps to show just how far ATVs have come since 4-wheeled ATVs were mandated by the CPSC in the mid-1980s:
|Legacy Technology||New Technology|
|Carburetion||Electronic fuel injection|
|Mechanical steering assemblies||Electric power steering|
|Incandescent tail/brake lights||LED tail lights|
|Manual-clutch transmissions||CVTs of various kinds|
|Straight rear axles||Independent rear suspension|
|Disc and drum brakes||Fluid shear brakes|
|Cable-driven mechanical speedometers||Electronic instrument clusters including GPS|
Advancements in ATV technology are following a trend similar to the automotive market. From the late 1970s to the 1990s, pickup trucks doubled in price and became loaded with more ‘techie’ features than most drivers can use. Likewise, the ATVs of today are becoming more and more feature-rich every year. If ATVs continue to follow the same trend as pickups, 4-wheeled quads loaded with advanced features and costing $10,000 or more will be on the market in the near future, and riders will eagerly part with their cash to have the latest and greatest technology. The advent of competition from China will help hold prices down, but more on this later.