Over the past 10 years, the ATV
Industry has quickly matured into
multi-faceted, highly competitive
business. First regarded as a younger
sibling of the motorcycle industry,
ATVs have now grown to surpass 2
motorbikes in annual North American
sales. The industry has several
driving elements that are shaping
it as we head into the next period
history of ATVs.
advancements have really helped
the ATV industry and ATV
buyer. The lasted in a long string
of firsts includes power steering.
and Yamaha both announced that they
would have power steering available
some 2007 ATV models. Fortunately
for ATV enthusiasts there is no
sight to this engineering binge.
The age of the sparsely equipped
is over. To compete in the ATV market
today a manufacturer must offeradvanced,
value-added features that address
common consumer needs while still
setting their models apart from
few more recent technological advances
on ATV include electronic fuel
injection, LED tail lights, automatic
transmissions, fluid shear brakes,
electronic instrument panels that
include GPS systems.
The ATVs of today are becoming more
and more feature-ladden every year.
If ATVs continue to follow the same
trend as pick trucks, 4-wheeled
loaded with advanced features costing
$10,000 or more will be available.
Another driving force behind the
ATV market is something not many
manufacturers want to acknowledge.
There is another ³Asian Invasion²
Asian companies had been attempting
to market low-cost, simple ATVs
the U.S. for years. The Big Seven
ATV manufacturers took notice back
1990s by offering youth ATVs in
the 50 and 90cc class. The Big Seven
into inexpensive tooling and manufacturing
by having these ATVs produced in
China, Taiwan and South Korean and
utilized their own testing facilities
personnel to validate that the designs
met their performance and reliability
standards. The result was annual
unit sales in the tens of thousands
relatively minimal investment.
The end result was that certain
manufacturers in southeast Asia
become more proficient at making
ATVs. Not long after this, some
enterprising American importers
recognized that these Asian ATVs
getting better and they could still
sell them at very low prices. Thus
we began to see ATVs sold under
some new names. These factors have
awakened a sleeping giant.
On the surface, the Big 7 do not
acknowledge the plethora of new
challengers in the ATV business.
But importers of Asian ATVs are
working hard to deliver a good product
at a super price. Consequently,
everyone in the ATV business is
now operating in a hyper-competitive
Some of the possible results of
this environment might be:
Cost reduction pressure. While it
is true that prices for high-end
are creeping upward, there is heavy
pressure is coming from Chinese
Taiwanese manufacturers to keep
costs down across the board especially
models less than 500cc. Cost reduction
pressure is causing all of the Big
to source more and more of their
products in Southeast Asia or other
cost manufacturing regions such
as Eastern Europe .
There could be an industry-wide
dilution of quality. Quality in
context refers to both product quality
and service quality. Dilution of
quality has only partially to do
with where ATVs are being manufactured;
is also a simple law of averages.
In any business with an overload
players there will inevitably be
companies who put out sub-quality
Most Asian importers are truly striving
to distribute a quality product
some of their offerings are very
the other side of the coin, the
Asian newcomers are not party to
design standards that the Big 7
comply with. However they do recognize
few consumers would buy an adult-sized
ATV that, for example, doesn't have
brake light or has archaic cable-operated
brakes--so the lack of a 'consent
decree' for Asian brands is only
part of the product quality issue.
Perhaps even more significant than
a dilution of product quality is
dilution, or dissolution, of dealer
and service quality. When a "Big-box"
retailer in a given area starts
selling low-cost ATVs "the
handwriting is on
the wall" for local dealerships.
That handwriting reads: "Be
Big And Be
Better Or Be Forced Out". The
phenomenon happening here is "commoditization"
and it is putting the squeeze on
sales and profit margins on every
player in the ATV business from
manufacturers to dealerships.
When something becomes a commodity
market there seem to be 2
options a 'premium' product and
service experience. The cost-reduction
approach will always be a vital
part of doing business in the ATV
world but relying on it alone means
offering only 'me-too' ATVs with
minimal profit margins and that
is risky business. However the Big
7, and therefore their dealer base,
clearly have an advantage in premium
features. These and brand loyalty
are the two major advantages enjoyed
by the major OEMs over Asian imports.
3) There could also be a 'weeding
out' of ATV manufacturers that takes
place very soon. As overall ATV
sales flatten out or decline, the
pressure will force some out of
the ATV marketplace. It might be
to see which companies ³say
Uncle² as the shakeout unfolds.
4) Expect the Big 7 to push for
Asian importers to be held to design
validation standards. The most recent
ATV design standards were developed
the late 1990s. Look for this to
be done again with the Big 7 also
for Asian importers to be included
whether they want to or not.
final trend seen in the ATV market
is to offer them as a 'tool
platform'. Approximately a third
of the current ATV market is considered
farm/ranch/construction. Trail closures
limit the growth of trail riding
opportunities but there will always
be a demand for food, new homes
infrastructure. Therefore it only
makes sense that vehicles of all
being developed by ATV manufacturers
that can be customized for specific
utility applications in everything
from land surveying to golf course
"Modularization" is a
word that can describe what is happening
highway vehicles and ATV designs.
Arctic Cat developed their speed-rack
system to enable multiple accessory
attachments. This development shows
one tip of the modularization iceberg.
The advantage of a modular accessory
platform is that one vehicle can
be used for many different tasks.
the Big 7 recognizes the growing
demand for accessory use on ATVs
are all developing modular accessory
attachments to meet this need.
The Big 7 and new ATV manufacturing
companies like Bobcat and Kubota
also marketing entirely new vehicles
platforms--to provide new sources
of sales into the industrial market.
With the engineering capabilities
of larger manufacturers and great
development tools available even
to small enterprises, the possibilities
utility use of OHVs and ATVs are
literally endless. Look for more
modular tool and accessory capabilities
on ATVs and OHVs in the future.