SEMA News—July 2014

BUSINESS
By Mike Imlay

Utility Task Vehicles By the Numbers

A Powersports Category Snapshot

SEMA research indicates that more than a third of automotive accessory enthusiasts are likely to own a powersports vehicle. That means the powersports market offers great crossover potential for aftermarket businesses catering to other specialty-equipment segments. So what’s one of the hottest trends in the powersports arena?

Look no further than the trusty Utility Task Vehicle (UTV), also known as the side-by-side. In the past decade, the UTV has grown far beyond its utilitarian roots to encompass sports and multipurpose uses and has become especially popular with the off-road recreation crowd. To get a handle on the size and scope of the UTV aftermarket, SEMA recently commissioned Clarity Research to develop and field a quantitative survey of 632 UTV owners who have accessorized their vehicles. The findings are instructive for any business seeking to expand products, sales and services to this segment.

Sizing Up the Market

The SEMA-commissioned report notes that approximately 670,000 UTV models were sold from 2010 to 2012. This is consistent with other market analyses that have predicted continued healthy growth of the segment through 2015. In the United States, Southerners represent the biggest buying block for side-by-sides, accounting for a full 44% of the nation’s sales volume. Next follow Midwesterners at 27% and Westerners at 21%. Even though the Northeast is the smallest region with 8% of the total sales volume, that would still imply that more than 53,600 units are operating in the region. Among the states themselves, Texas ranks first in sales, with California and Ohio coming in second and third.

Thanks to the surge in UTV popularity, powersports OEMs are offering consumers an array of side-by-side choices. Within the marketplace, vehicle models can be broken down into three categories based on their intended use: sport, multipurpose and utility.

The sport crowd embraces vehicles such as the Polaris RZR Series, the Arctic Wildcat, the Can Am Maverick and the Pitster Pro Double. Multipurpose buyers gravitate toward the Polaris Ranger Series, the Kawasaki Teryx, the Honda Big Red and the Yamaha Rhino. Consumers seeking utility often opt for the Kubota RTV Series, the Kawasaki Mule, the Deere Gator and the E-Z-Go MPT. Most important for the aftermarket, accessorization occurs at a very high rate for every vehicle choice. An estimated 410,000 U.S. households will purchase UTV accessories over a 12-month period.

Put another way, 82% of owners will upgrade their side-by-sides—usually soon after the vehicle purchase. As the SEMA report states, “Most purchases occur within the first three months, and many are completed at dealerships or directly through the OEM. Personal sources, such as dealers, friends and family, have the greatest impact on these buying decisions.... Modifications to UTVs are geared toward enhancing overall functionality. The vehicle’s versatility is a key attractor, as many owners use their UTVs year-round for varied driving activities and across diverse terrain.”

“We will continue to see this market growing and customization along with it,” said Henk Van Dongen, director of marketing for Omix-ADA, which has recently begun expanding its off-road product lines into the UTV segment. “I believe it is extremely important to understand your customer base and how they are spending their disposable income. Having a customer in your retail outlet and offering more products that cross over into another hobby, such as UTVs, makes sense. They are already used to your service levels and expanding the offerings allows the retailer to gain share of wallet.”

Consumer Profiles

Manufacturers and retailers wishing to sell into the UTV market will find a range of opportunities among the segment’s three different consumer groups.

The sport UTV experience characterizes the Western U.S., with 86% of the segment’s owners reporting that they use their side-by-sides for recreation. In addition, 72% say that safety is a priority when modifying their vehicles. Perhaps this is closely associated with the fact that 68% of them usually take others along for the ride. As the SEMA report says, “The most social of the three segments, sport owners often ride with passengers or in groups. Performance and terrain capability are at the core of this rapidly expanding category.”

Spending an average of $2,102 to accessorize their UTVs, sport consumers derive general enjoyment from their vehicles, often through trail rides and camping trips. Their primary accessory sources are powersports dealers, independent powersports shops or direct purchases from the aftermarket or OEMs. In making their purchase decisions, they often first turn to friends and family, then manufacturer websites and catalogs, and finally to their dealers for information. The vast majority (65%) prefer to install the accessories themselves. Overall, the sport segment represents a 26% share of the entire market. While this is the smallest of the three segments, sport UTVs are the type most often accessorized.

Companies wishing to reach the multipurpose UTV buyer will want to focus on both the Midwest and Southern regions of the United States, where their numbers are strongest. Of this group, 70% say that they want their vehicles to be practical, with an even greater number (77%) saying that safety is their priority when modifying their UTVs. The majority (73%) drive alone, and nearly that many respondents (72%) say that improving vehicle durability is their number-one goal. In short, they’re a practical bunch and also the largest, representing a 38% share of the overall market.

“Naturally, multipurpose UTV owners seek ultimate versatility,” says the SEMA report. “Multipurpose is the largest segment of UTVs, with a broad spectrum of models to choose from.”

While they do highly prize the general enjoyment they get from their vehicles, they principally use them for general chores and property maintenance. Expect this group to spend an average of $1,620 accessorizing their vehicles for these tasks. They prefer to shop through powersports dealers, OEMs, independent powersports shops or online powersports stores for their aftermarket upgrades. When gathering information for their purchases, they’re most inclined to approach their dealers as well as friends, family and manufacturer and aftermarket websites and catalogs.

The utility buyer comprises 35% of the overall market and prizes the UTV for the workhorse it is. “Utility owners seek capability and durability. These vehicles are often viewed as a tool,” emphasizes the SEMA report. “Utility ownership is equally high in the South, Midwest and Northeast. It is the lowest of the three segments in the West.” By far, most owners in this group drive solo (82%) and rank safety among their top priorities (81%).

Owners in the utility demographic value vehicles that help them with general chores and property maintenance, although an enjoyable driving experience also appeals to them. On average, they spend $1,550 modifying their side-by-sides. They prefer to make their purchases direct from OEMs, powersports dealers or through online big boxes, such as Amazon. Dealers, friends, family, online retailer websites, manufacturer websites and aftermarket catalogs inform their purchasing decisions.

Aftermarket Opportunities

Interestingly, among all demographic groups, owners are more likely to embrace “safety over speed, durability over performance and practicality over excitement” when accessorizing their vehicles. By overwhelming numbers, UTV owners favor items that enhance functionality first. Upgrades to increase performance rank as secondary concerns, while look and appearance enhancements come in third. For example, cab, roof, windshield and mirror accessories represent a high priority for buyers, right ahead of towing and winch tools. Lighting and electronics; safety and security products; cargo and storage enhancements; vehicle protection items; and wheel and tire upgrades follow next in popularity, forming the middle ground. Only toward the bottom of their wish list will you find a desire for engine performance, suspension and handling, and cosmetic and appearance products.

Get the Full Report The comprehensive SEMA UTV Accessorization Survey is available for free download. For more information about this and other SEMA market research projects, contact Gavin Knapp, SEMA senior manager for market research, at gavink@sema.org. For other market research reports, visit www.sema.org/automotive-aftermarket-research.

Located in Kamas, Utah, and in business for 51 years, retailer Weller Recreation currently carries three major UTV brands as well as offering parts and servicing to customers. According to co-owner Rich Weller, the segment continues to grow, with sales of UTVs running 5-1 compared to ATVs. His customer base embraces both practicality and off-road recreation.

“In our state we have farmers and ranchers and, of course, mountainous areas. We also have sand and slick rock,” he said, noting that windshields, tops, bumpers, storage items and lighting are among his top-selling items. “Fortunately, the manufacturer doesn’t put all that stuff on from the factory, so we have something additional to sell,” he added. “A lot of the units come with rims and tires that are already quite nice, but we do sell some of those [aftermarket items]. Some guys go for looks, too.”

Recognizing the lifestyle and crossover habits of UTV buyers can be key to helping them accessorize their vehicles. Truck and UTV ownership often go hand in hand, with half-ton pickups usually playing the role of transport vehicle for side-by-sides. A majority of side-by-side owners use open trailers to shuttle their vehicles. While typically owning just one UTV, a significant number of buyers also own other types of powersports vehicles, such as ATVs and boats. Not surprisingly, UTV consumers are an active bunch both in and out of their homes. Outdoors, they tend to enjoy travel, hunting, fishing, camping and hiking.

Typical UTV buyers tend to be male, upper-class, married, with no children. Their median age falls into the mid-40s.

Whatever their activities, most report that their side-by-sides are a big part of their lifestyles, making this growing category another segment of opportunity for the specialty-equipment industry.