The now immortal words of Hillary Clinton, “What difference does it make?”, in response to grilling by members of the Senate Foreign Relations Committee—regarding the Benghazi debacle—may not rank well in comparison with other memorable statements by world leaders on other memorable occasions, but may well apply to the golf car market.
Think of the inspiring words of Winston Churchill: “Never have so many owed so much to so few.” (For those lacking a history class, the Prime Minister was referring to the country’s indomitable Spitfire pilots turning back the bombing runs of Hitler’s Luftwaffe.) Think also of Ronald Reagan at the Berlin Wall: “Mr. Gorbachev, tear down this wall!”
Poor Hillary…Yet if she had been speaking at a meeting of the International Light Transportation Vehicle Association or the Golf Car Dealers Association, her words, if not inspiring, would have been hopeful. Why? Because in the wake of record numbers of golf course closures, overall sales of fleet golf cars, as well as other golf car type vehicles, will, in fact, be little affected. Thus, what difference does it make?
Before going through the numbers more explicitly, which, incidentally, will be part of SVR’s newly published mid-term report and analysis on the STOV industry, a few truths about the fleet and golf car derivative markets:
• While the fleet market is likely to decline only marginally over the next five years, by the same token, the prospects for any growth are negligible. Thus, manufacturers of golf cars will be further pressed by their parent companies to show results in non-golf applications with new products and improved distribution.
• The market for golf car-type derivatives in the privately-owned and utility segments, which will be growing, will see more and more value-added in the form of accessories and add-ons gravitate toward the dealers, via installations and optional, non-manufacturer sources.
• To effectively compete in the crossover utility market, golf car derivatives will have to be energized with optional hybrid drive trains and broader AC adoption.
The Outlook at Mid-Year for Golf Car-Type Vehicles
As noted, Small Vehicle Resource, LLC will be releasing an updated report on the state of the small, task-oriented vehicle (STOV) industry very shortly. This report contains a updated trend data and a new outlook to 2016. The report contains two major sections, one dealing with golf cars and their derivatives, and the other with off-road UTVs (side-by-sides).
Golf car-type vehicles are further segmented into fleet golf cars, utility vehicles, and privately-owned vehicles (including LSVs and PTVs).
From the initial draft of this report, with regard to golf car-type vehicles, the following salient aspects of the new forecast are as follows. First, current year, 2014, appears likely to continue the recovery from the severe negative impact of the 2008/2009 recession. The total number of golf car-type vehicles produced is forecast to grow from just under 300,000 units in 2013 to an estimated 305,000 units by the end of 2014.
While a marginal year-over-year increase, the 2014 forecasted level will bring production up to pre-recession levels. Looking beyond 2014, it is likely that golf car-type industry output will reach 310-312,000 units by the end of 2016.
Again, this does not look all that exciting, but it should be remembered that the traditional golf car manufacturers are putting more and more resources into vehicles which SVR would classify as off-road UTVs. Thus, Club Car’s 4 X 4 XRT line (1550, 950, 850) is better categorized as a UTV, while the company’s 4 X 2 XRTs and the Carryalls fit in better as a golf car derivative utility vehicle. Similarly, the E-Z-GO Cushman models which replaced the company’s MPTs are golf car derivatives, while the heavier duty gas and electrics are UTVs. Bad Boy Buggies are UTVs.
Golf Car-Type Segment Outlooks
Here is a summary of SVR’s preliminary forecasts of individual segment outlooks (new vehicles only):
• Fleet demand declines marginally but remains safely nested at or around 225,000 units (what difference does it make?);
• Total non-fleet demand (utility vehicles and privately-owned) should rise to over 100,000 units and will see a growth rate in the range of 5.0-6.0% from a 2012 base year;
• Golf car derivative utility vehicle market will increase to 50-55,000 units with a 3.5-4.5% growth rate from 2012;
• Privately-owned vehicle demand, inclusive of LSVs and PTVs will see gains of between 7.0-8.0%.
Although increasing resources will be put into the UTV market by the traditional golf car manufacturers, and justifiably so, in my opinion, the golf car-type vehicle remains the centerfold product in the fold-out brochure of vehicle models, stretching time-wise into the future. And there are opportunities for a creative upgrades of current models in the vein of extra range hybrids, further adoptions of AC technology and other electric technology not yet in major markets. (See my previous column on the Seychelles Special.)
