UTV boom keeps rolling along: small, multi-use vehicles find their place in nearly every market segment; 120,000 and growing

Diesel Progress North American Edition, Jan, 2005 by Dawn M. Geske

While many segments of the engine-powered equipment industry are just now getting their legs back under them after some tough years around the turn of the century, at least one market has spent most of the last five years booming. And what's making all that noise is one of the smaller examples of mobile machinery you're likely to find on any jobsite--utility vehicles.

These days, it seems anyone and everyone is adding a UTV to their product line and it's not hard to see why. The UTV's usability in virtually any application has OEMs from every corner of the industry--construction, ag, turf, recreation, golf--looking for a way to get in on the action.

Yet whenever the numbers for anything become so gaudy so quickly, questions immediately come to mind: Is the demand for these vehicles really that strong? Who's buying them all? And most importantly, how long can the UTV good times roll?

In order, the answers to those questions appear to be: yes, everybody, and probably for some time to come.

First the demand. The UTV market has increased more than 50% since 1999, according to Power Systems Research, the St. Paul, Minn.-based market research company. In 2003 alone, PSR reported sales of 120,000 units and 2004 was expected to finish about 5 to 7% higher still. Any market where the number has that many zeroes on the end is more than a mirage.

And the reason that's true concerns who buys them, which again, is pretty much everybody While in the beginning UTVs were seen as commercial vehicles with only a few niches, primarily in municipal and landscaping, somebody forgot to tell that to people in construction, ag, municipal and even mining markets (where Bobcat Co. is aiming with its newest 2200 4x4 UTV).

"That's why we call it utility," explained Keith Elsan, product manager for utility vehicles at John Deere. Deere was one of the pioneers of UTVs and its current flagship Gator vehicle line can be seen from ballparks to farms. "It is a utilitarian vehicle that can basically, go in most places and satisfy a great deal of needs," Elsan said.

Cross-functional uses are also apparently a big draw to buyers, according to PSR Senior Analyst Pete Gantriis, who noted that many UTVs used around the farmyard during the week are used to go hunting or for other recreational activities on the weekend. "There is some crossover out there in some of these markets as you can imagine," he said. "It's getting spread across different uses which were never before seen."

Much of this "crossover" activity comes from the fact that customers who started out with all-terrain vehicles (ATVs) have matured into the larger and more robust UTVs. The typical UTV has a beefier platform, a wider stance and greater stability than an ATV. It can seat at least two full-size adults vs. an ATV's usual saddle-style seating arrangement. The UTV can also incorporate an enclosed cab with a heater, a cargo box with high (in some cases approaching 2000 lb.) payload and even dump boxes. The UTV is also able to be configured in countless variations and have a number of accessories and attachment options, all of which only adds to the machine's versatility.

"What we're seeing in the last couple years is that those people that would normally buy an ATV are moving toward utility vehicles," said Polaris product manager, Marc Tullemans. Polaris began selling UTVs in the late 1990s and now is among the industry leaders.

"Users that are buying it for recreational use are now going to the utility vehicle for the simple reason that it can do anything an ATV can do, just as fast, but it can actually do more," Tullemans said. "It can carry more people, plus it gives you a box in the back that you can throw stuff into without having to tie it into an ATV rack with bungee cords, which is highly convenient."

Estimates place the number of OEMs selling UTVs at about 30 with Husqvarna and Kubota Tractor Corp. entering the market within the last war. Of that number, PSR estimated that approximately 84.6% of the '04 market is held by just eight producers John Deere, Polaris, Kawasaki, Club Car, E-Z-Go, Kubota, Toro and Bobcat.

Deere, which at 27.4% holds the largest '04 market share, was one of the early entrants into the market, first offering its five-wheeled AMT (all material transport) vehicle in 1986. Since then, it has evolved its line with its Gator products, offering vehicles in light- (payloads less than 900 lb.), medium- (payload 900 to 1800 lb.) and heavy-duty (1800 lb.-plus payload). Included in Deere's Gator line are compact, traditional, standard, high performance, heavy-duty, electric and special application models which are powered by Yanmar and Kawasaki engines. The engines are offered in both gasoline and diesel, ranging from 8 to 26 hp in one-, two- and three-cylinder configurations. They are paired with continuously variable transmissions (CVT) or Tuff Torq Kanzaki synchromesh transmissions.

Following Deere is Medina, Minn.-based Polaris, which after originating with an ATV line, emerged into the UTV market in 1998 with its Ranger series. Those vehicles, described by the company as "hard working, smooth riding, off-road vehicles," really started a new business for the company, said Tullemans. "We opened up this category for people who before were looking at ATVs--hunters and farmers who wanted to work and play with this."