2023 POWERSPORTS MARKET TRENDS
Sport UTVs Still Set the Pace; New Aftermarket Players Enter the Market; E-Bikes Gain in Popularity
The vehicular market segment that industry-watchers refer to as the "powersports" market is, in a way, easier to label than it is to define. What, after all, is the connective tissue that joins such disparate market segments as ATVs and side-by-sides, motorcycles and dirt bikes, snowmobiles and personal watercraft—especially considering that very few of these vehicles are ever used in a "sporting," i.e., competitive venue?
Whatever it is, one thing is certain: the powersports market is growing. For this article we consulted several industry experts for their assessments of the powersports market. What follows has been edited for clarity and length.
The State of the Market
Overall, our sources felt the state of the market was solid, though most cautioned against the likelihood of another growth surge as was the case in 2020.
"I would say the market is in recovery," said Jason D'Armond, director of sales and marketing for PRP Seats. "COVID was a big boom for the off-road industry, and last year we saw the pendulum swinging back a bit. We expect it to contract a bit more this year but stabilize."
On the other hand, Josh and Matt Martelli, owners of motorsports marketing group Mad Media, are seeing more optimism from their industry partners. "Most [supply-chain] issues have been resolved, but there seems to still be a greater demand than supply for sport-model UTVs. Overall, the market appears to be strong, and the companies we are speaking to [were] excited for 2023 and the events we [had] planned for consumer-facing activation."
Glenn Hansen, former editor of Powersports Business, related his experience at the Parts Unlimited NVP Product Expo, held in Louisville, Kentucky, last January. "I talked to dozens of aftermarket companies and interviewed and listened to Parts Unlimited executives," he said, "and there's a lot of optimism with a little bit of hesitation behind it—but on the whole, optimism and excitement moving forward."
In any event, there appears to be plenty of room for growth within the segment. As proof, companies that hadn't previously been a presence are now entering the space with powersports-specific products. Pennzoil, for one, has introduced a new line of lubricants for quads, UTVs and watercraft. "Whether it's enjoying the backcountry on an ATV or enjoying time boating with the family, we're excited to bring this new line to outdoor enthusiasts to give them peace of mind during their adventures," said Bree Sandlin, Shell vice president of lubricants marketing.
Similarly, Wilwood has recently launched its first-ever UTV disc-brake conversion kits for the Polaris RZR, Honda Talon and Can-AM X3. "UTVs are bigger than anyone would think," said John Grieco, Wilwood marketing manager.
And Atturo Tire has entered the powersports market with two new tires designed for UTVs, the Trail Blade X/T SXS and Trail Blade Boss SXS. "Atturo may be new to the powersports market, but we will be a familiar name to the UTV consumer," said Michael Mathis, president of Atturo Tire. "Nearly every side-by-side owner already owns a truck and will be familiar with the Atturo brand from our years in the market."
The OE manufacturers themselves are similarly diversifying their product lines to meet a growing demand from consumers seeking more varied uses for their vehicles. Polaris has reintroduced its Ranger UTV series aimed at farmers and ranchers, and re-engineered the Sportsman ATV line for extreme terrain such as mud and snow.
"The sport side gets the glamour," Hansen added, "but there's such a bigger marketplace for the whole utility and professional or 'prosumer' side, such as small-time landscapers who use their vehicles for work during the week and then go hunting on the weekends."
Gauging The Market: What's Hot
Our panel of experts generally agreed that UTVs continue to set the pace, and among these, the Polaris RZR Pro XP/Pro R/Turbo R platform was cited as continued sources of growth, though D'Armond noted lower adoption rates from what was typically the case with new models in
Hansen points to a growing diversification of the market, as more players enter more market niches. "Polaris continues to do well. A company like BRP continues to innovate and draw attention to their unique products, and they're talking about electric motorcycles under the old Can-Am name. Triumph is doing amazing things. Their sales have done quite well, and now they're talking about getting involved in off-road and supercross racing."
As with late-model trucks and SUVs, consumer preferences in the North American market seem to lean towards "bigger is better." The Martellis see "the increase in the size and power of sport UTVs driving the growth of the market. The new faster, stronger, more powerful UTVs are attracting new customers that might have otherwise opted for custom-built trucks with large motor packages—further expanding their market reach."
The powersports market has always held a strong appeal for accessorizers. According to the latest "SEMA Market Report," owners who accessorize their vehicles are almost twice as likely to own off-road recreation equipment—in particular ATVs, RVs and motorboats—in addition to their primary vehicle(s).
"In the UTV segment, tires and wheels, radios, fresh-air helmets, aftermarket bucket seats, additional light bars and light pods, and race-quality harnesses remain strong market leaders," said Josh Martelli. "OEMs like Polaris, Can-Am and Kawasaki have done a great job improving the accessories that now come with most sport-model UTVs, but for the more advanced riders, there is still a need for these additional features and creature comforts."
"The tire market is always good across the board since they are a highly consumable product," Hansen concurs. "Gear is another big item, whether it's fashion-
related or performance-related or providing protection for off-riders."
"Storage is always a need for UTV enthusiasts," D'Armond said. "It's why we R&D and launch complete suites of storage options for every new sport UTV to hit the market. Our Kawasaki KRX suite did particularly well in the last couple of years and we've expanded into the crossover UTV market.
"Seats also continue to be strong. People want to be comfortable on their long rides, and stock seats just don't do it for most."
Another new market driver is the emergence of women in the segment. According to a 2018 survey conducted by the Motorcycle Industry Council, nearly one in five motorcycle owners are women, double the number from 10 years earlier. "Adventure-bike riding gear is expanding on the side for women riders who want something more than just a motorcycle jacket that fits a smaller man," Hansen notes. "That's a growing market for sure."
Consumer Trends and Marketing Opportunities
Most of our sources continued to be bullish on the subject of overlanding, at least for the near term.
"Overlanding is definitely top of the list when talking about growth in off-road," said D'Armond. "Our concern is the longevity of the trend, so the products we're looking at developing will serve a wider audience."
The Martellis agree. "The overlanding market is on fire. The pandemic gave it a huge boost because folks had less to do locally and time to get out and explore nature and trails and parks in the United States. In every product sector—from portable power stations to solar auto packages to camping trailers, you name it—it's all up." Hansen likewise concurs, adding that overlanding "opens up a door for all kinds of companies that make the right products to get you to places where you can do some off-road camping."
Most of our sources agreed that racing is still a potent marketing tool.
"Marketing at race events provides the best opportunity for proof of concept, on-site activation, and social reach," Josh Martelli explained. "Marketing messages today get lost in the noise. But when paired with engaging content, they can track up to 600% more effectively in viewer
Hansen points to MotoAmerica's King of the Baggers racing series, which began as a single event in 2020 but which has since expanded into a multi-race circuit nationwide, as an example of how a small niche can drive interest at the dealership level: "It's basically V-twin Harley-Davidson and Indian touring bikes that literally have hard bags on them. They had a whole race season last year, and it got great TV attention and it drew a bunch of interest. The series is expanding with a lot of publicity and promotion behind it, and savvy dealers are taking advantage of it."
The View Ahead
Most of our panelists took a guardedly optimistic attitude toward the coming year, citing higher interest rates and ongoing supply-chain issues as causes for concern. While D'Armond forecasts a slight a drop in sales, the Martellis see long-term growth fueled by a devoted enthusiast base: "Off-roading is a culture—meaning that people just don't stop being off-roaders when times get tough. They just get selective about their spending habits.
"We're still in a post-pandemic space where consumers want to customize their vehicles, explore with them, and turn them into mobile offices equipped with solar power solutions—and now, even remote internet access thanks to products like Starlink. There are no real indicators that any of that excitement and energy will taper off, especially since gas prices have largely returned to normal."
"I don't think we're headed for a deep recession like a lot of people might want to think," Hansen observed, "though we can force our own errors if we're not careful.
"I think if we're flat, we're good. But I think there will be continued activity that allows aftermarket companies and dealers to have success in their markets."
POWERSPORTS & UTILITY VEHICLES
As of August 15, 2023
ACCEL Technology Corp. 60014
Aprove Products Co. Ltd. 60020
ARC Lighting 60039
Autotop Techgear Inc. (Canada) 60038
Boxo USA 60043
Bullite Wheels 59007
Fullriver Battery 59027
Giant Loop 59021
Harmony Tie Boss LLC 59041
Hitachi Astemo Americas Inc. 60007
Hornling Industrial Inc. 59019
Inferno USA Eyewear 60042
JackRabbit Mobility 61010
Jacktech USA 61006
Jiangsu Fmol Machinery Technology Co. Ltd. 59039
Metra Electronics 60031
Ningbo Norwayho Auto Parts Co. Ltd. 60034
Omnisense Systems 59015
Recon Power Bikes 60011
Rhino USA Inc. 60023
Ride With Us 72000
Rocky Mountain ATV/MC 60015
Strapworks Automotive 59035