The global all terrain vehicle (ATV) market was valued around USD 6 billion in 2015. It is expected to grow at a CAGR of 5% during 2016 to 2024 (forecast period). The industry will surpass USD 9 billion by the end of the forecast period. ATVs are popularly known as quads, three-wheelers, four-wheelers, quad bikes, or quadricycles.
All terrain vehicles are small, open, and single-seated motor vehicles with three or four tires. These tires have deep-threaded structures that allow the vehicles to be driven on rocky, muddy, and root cover terrains. With a host of applications, ATVs are ideal for wetlands and sand dune topologies.
Augmented trend of recreational off-road activities, such as racing is estimated to drive the industry in the near future. Rising disposable incomes should also contribute industry growth. Outdoor parks and recreational centers are adding ATVs to their existing amenities. This is ascribed to the unparalleled riding experience of ATVs, thus leading to their popular demand.
Rise in living standards, self-dependence, and employment rates can positively impact their growth. Steady economic development can boost credit availability and support the spending capacity of consumers. This is likely to raise industrial sales in the forthcoming years.
Advancements in eco-friendly ATV versions will propel market growth till 2024. Customers can choose from various propulsion systems; like solar-electric, gas-electric, or diesel-electric drive trains. Hybrid ATVs are fuel-efficient and ensure minimal emissions. Thus, higher demand for these has fueled the overall industry.
Manufacturers are engaged in developing efficient & lightweight models with low center of gravity. These models would aid military & defense applications, furthering industry growth.
Active research & development (R&D) for new technologies and product developments is projected to add market revenues. Manufacturers focus greatly on enhancing product features while reducing the maintenance costs.
ATVs are prone to high risks, leading manufacturers to resort to safety measures; such as airless tires, covered roof for roll-over situations, and independent suspensions. Manufacturers also adopt innovative technologies; like puncture-free non-pneumatic tires (NPT), thereby lowering accident-risks from tire punctures.
Apart from global positioning system (GPS) tracking, mobile tracking, and bluetooth, integrated smart phones, audio entertainment, and Go-Pro cameras significantly improve overall driving experience.
Regulatory bodies; such as the ‘Consumer Product Safety Commission’ (CPSC), have restricted ‘under-16’ children & the number of people from riding these vehicles. This may decrease injury &fatality rates.
Likewise, the ASI (All-terrains vehicle Safety Institute) regulates & promotes the use of safety equipment (approved by the ‘Department of Transportation.’ These safety devices comprise footrests, long pants, long sleeves, gloves, goggles, seatbelts, etc. Rules prohibit riders from pillion-riding on single-rider quads and limit the number of passengers to one on two people quads.
Demand for integrated communication systems & other technically advanced features can augment the product costs. Furthermore, rising ‘interest’ rates may discourage buyers and hinder the industry in the coming eight years.
The all terrain vehicle market is fragmented on the basis of applications, products, and regions. Applications comprise agriculture, entertainment, forestry, hunting, military & defense, sports, and others. 50% of the total quad sales result from entertainment and sports. These two applications will hold the largest shares and contribute significantly to the market.
Military & defense accounted for over 9% shares in 2015. This segment’s vehicles are mostly used for moving combat supplies. Agriculture generated incomes exceeding USD 800 million in 2015. It should grow at over 5% CAGR in the forecast period. ATVs have substituted tractors and some heavy equipment in agriculture.
In view of products; the industry is split into sports ATVs, sports utility ATVs, youth ATVs, and utility ATVs. The capacity of sports ranges from 200cc to 400cc, sports utility from 250cc to 700cc, and utility from 250cc to 700cc. High-performance ATVs can vary from 350 cc to 750cc with twin cylinders.
Sports utility ATVs generated around 28% of the overall shares in 2015. Sports and sports utility segments should contribute significantly to the worldwide industry. Youth ATVs stood over USD 750 million in 2015.
The regions consist of North America, Latin America, Europe, the Middle East & Africa (MEA), and Asia Pacific. With over 50% shares in the global industry in 2015, the U.S. earned USD 2.5 billion that year. This nation is expected to expand at a CAGR of about 4.5% till 2024.
U.S. will be the regional & worldwide leader with respect to ATVs or quads. Its growth can be attributed to large ranches, farms, & open terrains spread across the country. National competitive trend among the youth regarding ATVs also plays a key role in supporting the U.S. market.
Asia Pacific is predicted to witness the fastest growth till 2024 owing to the regional popularity of ‘power sports.’ It accounted for 12% of the overall revenues in 2015. Its search & recovery operations and travel & agriculture sectors adopt ATVs, favoring regional expansion.
The Canada industry was valued over USD 666 million in 2013, with record sales of over 53 million units. Europe also experienced considerable growth due to high demand for ATVs in the region.
China captured over 35% shares in 2015. Its fiscal adjustments will improve national industrial performance. Chinese companies offer quads that have capacities varying from 50cc to 250cc.
Chinese sports applications contributed around 28% of the national demand for ATVs. Sports were followed by entertainment. Key players in the worldwide all terrain vehicle market are Honda, Yamaha, Arctic Cat, and Polaris. Yamaha captured more than 16% of the overall industry in 2014. It was the third largest ATV vendor after Honda and Polaris in 2013.
Players actively participate in acquisitions and mergers to gain larger shares. Hammerhead, a China-based company, was acquired by Polaris to expand the latter’s product portfolio. Moreover, this step is projected to assist the firm in preventing expenditures of exporting comprehensively built units from the United States and cause cost-reductions.
Polaris also acquired Kolpin Outdoor in April 2014 to gain its grip across power sports and business sectors. Key companies spend heavily on innovative technologies and novel products. Demand for bettering the product features & performance helps manufacturers stay competitive.
Research Support Specialist, USA