One of the Polaris RZR models involved in the large first quarter vehicle recall.
Polaris reported earnings for the first quarter 2016 fiscal year with sales and earning declining for the second consecutive quarter. Revenue was down 5% to $983 million driven by inventory management and currency impacts. Earnings per share was down a significant 45% with currency, volume and mix and considerable legal and warranty costs more than offsetting leaner operations. The following are some of the highlights related to the small, task-oriented vehicle market.
Polaris is recalling more than 160,000 RZR vehicles to address fire and other thermal risks. This figure appears to include vehicles outside the US as the CPSC reported a figure of 133,000.
Management expects to "…address all of the recalled vehicles within the quarter…" and emphasized their commitment to resolving the issue quickly.
Side-by-side dealer inventory declined upper single digit percent in the quarter.
Year-over-year (YOY) North American side-by-side retail decreased slightly in an industry up mid to high single digits, so some market share was lost.
Management is positive about the performance of the new GENERAL product line and reports cannibalization of Ranger and RZR lines is not significant.
Side-by-side market remains weak in oil producing states but overall management is optimistic about the ORV (ATV & side-b-side) industry.
Management reports higher variability from month to month and regionally in the ORV market.
The Global Adjacent Markets business unit saw a 8% decrease in revenue with strength in Aixam, national accounts and GEM offset by weakness in Bobcat and Brutus. Defense business (MRZR and Dagor) declined "significantly" due to tough comparables but the order backlog is up.
The European ORV industry grew low single digits in the first quarter, with Polaris retail outperforming, up mid-single digits.
Multix retail and distribution, while still relatively small, are on plan through the first quarter. Multix is a small multi-purpose vehicle for the Indian market.
Ranger production will begin in the second quarter at the new Huntsville, AL plant, which should provide significantly better operating efficiencies and better inventory and retail flow management.
Management expects Global Adjacent Markets to be up in the high single digits percent range, reflecting the recent acquisition of Taylor-Dunn and ORV/Snowmobile sales to be down low to mid single digits.
Polaris announced a massive recall of approximately 133,000 RZR 900 and RZR 1000 side-by-side vehicles covering model years 2013 to 2016 because of a potential fire and burn hazards to drivers and passengers. The recall covers a wide range of RZR 900 and RZR 1000 model variations (a few are pictured above). The following information is from the Consumer Product Safety Commission.
Hazard: The recalled ROVs can catch fire while consumers are driving, posing fire and burn hazards to drivers and passengers.
Consumer Contact: Polaris at 800-POLARIS or 800-765-2747 from 8 a.m. to 9 p.m. CT Monday through Friday and 9 a.m. to 5 p.m. CT Saturday and Sunday or online at www.polaris.com and click on "Off-Road Safety Recalls" on the main page of the Polaris website.
Description: The U.S. Consumer Product Safety Commission (CPSC) in cooperation with Polaris Industries Inc., of Medina, Minn., is announcing a recall for about 133,000 Polaris Model Year 2013-2016 RZR 900 and RZR 1000 recreational off-highway vehicles (ROVs).
Polaris is instructing riders not to carry fuel or other flammable liquids in their vehicles.
Comment: I believe this is the largest recall by far of any side-by-side vehicle. The most recent very large side-by-side recall was from Kawasaki last year that involved about 20,000 vehicles. With 133,000 vehicles involved, the cost of repairing the vehicles could be substantial. Although Polaris has more than enough financial resources to absorb the costs, they are likely concerned to the hit their brand image may take. Not only are they the market leader but the company emphasizes their engineering excellence and innovation.
The new 2017 Defender MAX DPS HD8 from Can-Am in Mossy Oak Break-up Camo.
The new 2017 Defender MAX XT HD10 from Can-Am in Intense Red.
These models are available in Green, Yellow or for $800 more Mossy Oak Break-up Country Camo.
The 2016 Yamaha YXZ1000R in red and white is being recalled as well as the following 2016 model year versions.
The special edition YXZ1000R-SE in yellow.
The YXZ1000R in blue and white being recalled.
Yamaha is recalling approximately 7,000 2016 YXZ 1000R and 1000R SE side-by-side utility vehicles due to the potential of water freezing in the throttle cable and posing a crash hazard. No injuries or incidents have been reported related to the potential hazard. The following is the recall information from the Consumer Product Safety Commission.
Hazard: Water can get into the throttle cable and if it freezes during cold weather, the ice can prevent the throttle from returning to idle. This can cause the rider to lose control, posing crash and injury hazards.
Description: This recall involves model year 2016 YXZ1000R and YXZ1000R SE Side-by-Side utility vehicles sold in four colors: orange and black, blue and white, silver and red, and yellow and white. The model name (YXZ…) and "1000" is displayed in a graphic on both the left and right side of the vehicle. The vehicle identification number (VIN) is stamped on the frame near the driver's side rear wheel. The letter G in the 10th position of the VIN number indicates that the unit was made in the 2016 model year.
Remedy: Consumers should immediately stop using the recalled utility vehicles and contact their local Yamaha dealer to schedule a free repair. Yamaha is contacting all registered owners directly.
Sold at: Yamaha side-by-side dealers nationwide from September 2015 to February 2016 for between $19,800 and $21,600.
Distributor(s): Yamaha Motor Corporation USA, of Cypress, Calif.
Comment: This recall is relative large in size but more importantly for Yamaha it involves their newest entry into the high-end recreational segment. After their problems with the Rhino, Yamaha had not been active in that market segment for a number of years before the introduction of the 2016 YXZ1000. While in the long run the recall should not be detrimental to their efforts, they would have preferred a recall free re-entry into the recreational side-by-side market.
Source: SVR based on CVRP data.
The California Air Resources Board (ARB) is proposing $230 million in funding for the California Clean Vehicle Rebate Program (CVRP) for fiscal year 2016-2017.
CVRP offers vehicle rebates on a first-come, first-served basis for light-duty ZEVs, plug-in hybrid electric vehicles (PHEVs), zero-emission motorcycles, and neighborhood electric vehicles. Rebate amounts are $2,500 for battery electric vehicles (BEVs); $1,500 for PHEVs; $5,000 for fuel cell electric vehicles; and $900 for zero-emission motorcycles and neighborhood electric vehicles. As of February 1, 2016, the CVRP has rebated over $291 million, covering 137,000 vehicles.
NEVs have been a small portion of these vehicles, totaling only 147 vehicles and just over $151,000 in rebates from 2010 to 2016, according to the CVRP statistics. One issue is that there have been only four brands that have been eligible for the rebates including GEM, Miles, Vantage and EVI eMega. By far GEM has been the most prevalent NEV in the program, accounting for 111 of the 147 vehicles. However, the model year 2014 and 2015 vehicles have not been eligible because the do not meet CVRP performance requirements. According to the CVRP website there are no current model year NEVs eligible for the rebate. As the above chart shows, there has been a significant drop-off in NEV rebates since 2013.