U.S. RETAIL SALES of nontraditional ATVs reached about 465,000 units in 2007, according to researchers at Power Products Marketing. Although this reflects a 17 percent increase over 2006 year-end totals, it is nowhere near the exceptional growth rates the market experienced in 2005 and 2006.
Despite this effort, the overall U.S. ATV market, including both traditional and nontraditional brands (but not including UTVs), was down in 2007. The reporting members of the MIC posted sales figures of about 640,000 units, and the total ATV market reached roughly 1,105,000 units, down from the 1,150,000 units retailed in 2006.
Well over 100 distributors actively import ATVs into the U.S., but only a handful are responsible for the bulk of the sales, and the market remains very fragmented. The top 10 distributors in 2007 were, in alphabetical order: AIM EX, Baja Motorsports, BMX Powersports, Goldenvale (aka Roketa), Kazuma Pacific, Maxtrade, Moto Dealer Import, Newstar, SunL and Tank Sports.
Even with some distributors downsizing to the dealer level and others leaving the market or consolidating, new distributors saw an opportunity in 2007 to get established. One of the most intriguing distributors exhibiting at February's Dealer Expo was Jetpower Motorsports, which plans to bring Dinli-manufactured ATVs back to the U.S.
Of the established Taiwanese brands, only KYMCO appears to be holding its own. The Taiwanese segment's share of the nontraditional ATV market has been falling since 2000, but in the past couple of years that decline has increased dramatically. In 2003, Taiwanese units represented 65 percent of the ATV sales not reported to the MIC. In 2007, distributors selling Taiwanese brands accounted for just over 2 percent of nontraditional ATV sales.
Part of the decline may be because some of the reporting members of the MIC began importing small-displacement Taiwanese units of their own to compete with the nontraditional brands. But primarily it's a pricing issue. Reports indicate that many Taiwanese companies are thinking about manufacturing in Vietnam to compete with the low labor costs of China. (These companies won't consider factories in China for ideological and political reasons.)
Displacements Creeping Up
The nontraditional ATV market continues to shift toward the higher displacements. The Y6 category of ATVs under 70cc represents 16 percent of sales compared to 26 percent the previous year. Sales of units with displacements between 70cc and 90cc rose slightly, but they were only 20 percent of total nontraditional sales, down from 23 percent in 2006. Much of the growth in the import ATV market occurred in the 91cc-to-150cc displacement range known as Y14-16. About 49 percent of Chinese and Taiwanese ATVs sold in 2007 were in this category, up from 38 percent the previous year. The nontraditional brands now represent just over 87 percent of all ATVs sold in the Y6-16 categories when their sales are combined with the traditional brands, up from 83 percent in 2006.
This pattern of moving up the displacement scale is also prevalent in the adult entry-level segments. The nontraditional brands are beginning to make some headway, although not on the scale of the youth sector. In 2007, about 10 percent of ATVs 151cc and larger sold in the U.S were of nontraditional brands, compared to 6 percent in 2006 and 5 percent in 2005. (Continued)