The golf car industry with an array of mobility products centered around golf cars and golf car derivatives (e.g. PTVs, utility vehicles), is facing a new reality involving more diverse competition and the opportunity of participating in a significantly larger market: the market of urban/suburban mobility.
Thus, there are risks to the core market in PTVs, but correspondingly, the possibility of much higher revenues. Avoiding the risks and extending into relatively unknown market environment will take new and creative strategies on the part the leading companies, building on well-established manufacturing and distribution strengths.
Dealer perspectives in transition
One of the strengths of the traditional golf car industry has been the broad network of dedicated dealers. That network is already in transition given the rise of the PTV as the major revenue source for manufacturers. Some dealers have already, proactively, inserted their product line into municipal mobility plans, albeit, so far, this appears to be relatively limited in scope.
Nonetheless, dealers will play a key role in the urban/suburban (USM) market. First, they are strategically located close to urban and suburban centers. Secondly, they have the expertise to supply product and insure proper vehicle servicing. And, finally, they are potentially the manufacturers’ face to the new market—especially in dealing with local officials in charge of transportation planning.
The USM market will involve new technologies, such as heightened interconnectivity and driver assist and self-driving systems. Thus, product development and training will be key factors in securing a share of the market.
I and my associates at Small Vehicle Resource have been diligently tracking the rapidly developing urban/suburban mobility market. Basically, three trends appear to be driving this market on the demand side: 1) Cities and municipalities seeking to reduce the carbon footprint of vehicle traffic, and 2) Reduce congestion at the same time; while, 3) Increasing the efficiency of getting from point A to point B. What follows is a thesis on the underlying socio-economic pressures, which appear likely to give direction to this emerging market.
Climate change meets the coronavirus
Up to this point the objectives regarding urban/suburban mobility rested on the three points just listed. With the coronavirus pandemic, and its devastation of urban areas in particular, a distinctively different variable has entered the picture.
Cities and municipalities were bent on excluding personal vehicles and promoting greater use of mass transit. In light of social distancing regimens invoked now to control the spread of the disease—and the future preventive measures against pandemics that are likely to emerge—mass transit is hardly the option it once was, nor likely to be.
Paradoxically, modes of personal, individualized mobility are far safer than mass transit. Even the small, but confined space of the Cruise pictured above would need a “sanitizing” protocol to be fully safe, but the process is likely to much simpler and more effective than mass transit in the form of commuter buses and trains.
Potential for reverse migration from cities to more dispersed suburban locations
The scope of the coronavirus pandemic could well lead to a reverse migration to the suburbs as was so prevalent in the 60s and 70s. Until just recently cities were touting a rebirth in vitality on the energies of Generation Xers seeking the diversity of entertainment and business and the social interconnectedness that cities offered. In light of what is happening now these attractions may not be so compelling.
A step further to make the case. If ever a crisis bred new ways to work and communicate in and for work, it is this one. It is not that teleconferencing, voice conferencing, remote schooling, webinars, podcasts, and online ordering did not exist before the pandemic.
All these technologies were available, but the pressure of the pandemic has moved these technologies to the forefront of survival. As a result they are being used more intensively, and at the same time more extensively—that is to say, the mass of individuals who never used, or rarely used, any one of these technologies, has had to do so now. This new mode of living is unlikely to be reversed. The upshot of this is that dispersed living at considerable distance from the tradition workplace (which becomes progressively more virtual) is not only feasible, but desirable with market value.
What’s new on wheels and coming to your garage?
In this context, a wide number of mobility technologies and applications will find a market. My colleague, Marc Cesare, has posted a comprehensive overview of the technologies and the mobility types that are on the cutting edge. To read his article in full go to the Small Vehicle Resource site at www.smallvehicleresource.com and click on the drop down over the news carousel in the upper right. Click on “New Mobility Technology Challenges PTVs”.
As Marc notes, “This technology [as well as products] is wide ranging from electric skateboards and electric bikes to three-wheeled and larger autonomous vehicles.” So what are these products and technologies in more detail?
Electric bikes & scooters
Electric bikes and scooters offers a slice of the market as an alternative transportation experience. An electric pedal-assist bike can provide exercise without as much exertion as a traditional bike. Electric scooters offer an alternative to PTVs for quick single or two-person trips. This technology can also be applied in the form of a bike or scooter share systems, providing access to the whole community. A share program would seem well-suited to a planned community.
Three-wheelers & Autonomous Vehicles
The Arcimoto Fun Utility Vehicle (FUV) has been featured in a previous column. This vehicle type falls into a multi-passenger segment of the market, to include self-driving buses, such as the Cruise. As a whole this category would include multi-passenger PTVs and be in direct competition to this new mainstay of the traditional golf car industry.
The Arcimoto, DMV classified as a motorcycle, can operate at higher speeds and has no restrictions for venturing outside of communities on public roads. At the same time, with appropriate modifications, this vehicle can be on the golf course and in the universe of planned communities.”
New Players, investment & disruptive innovation:
What PTV manufacturers face in the new market of urban/suburban mobility
Resident of gated communities are familiar with the product offerings of the Big Three, Club Car, E-Z-GO, and Yamaha, along with others that have strong competitive products (STAR, Tomberlin), but these residents will have the increasing benefit of a diversity of choice.
Traditional golf car manufacturers for their part are also facing important choices going forward, if they are going to be part of the new mobility market. As Marc notes in his article on the Small Vehicle Resource website,
“An additional aspect of urban and micro mobility that PTV manufacturers must contend with is the increased number of market players, capital investment and disruptive product innovations that the technology brings. For example, Harley Davidson and Jeep have revealed at least prototype electric bikes. Completely new companies like Arcimoto have entered the market. Tech companies like Alphabet (Google) and traditional auto manufacturers are developing highly sophisticated autonomous vehicle technology. In addition, you have ride share companies.”
Start-ups like Rad Power Bikes energize the market
Rad Power Bikes, is an example of the type of start-up in the urban mobility space that is energizing the market. The company produces a wide range of e bikes suited for personal transportation and as commercial delivery vehicles. EWheels is another startup specializing in a wide range of electric scooter, as well as e bikes. The company focuses on three-wheeled and four-wheeled scooters. (Space does not permit more details on these kinds of manufacturers, but a future column will do so.)
Traditional golf car manufacturers and dealers in the USM competitive matrix
Strengths of the current industry:
- Expertise in electric drive systems;
- Brand names are mostly well-known;
- Invested, and have a good start, in interconnectivity technologies;
- Critical: Possess a strong network of dealerships in place;
- Are part of large corporations with substantial financial and technical resources.
Disadvantages and weaknesses:
- Conservative managements until recently focused on gaining market share in the no-growth golf course market;
- As an industry there are few start-ups that have energized the USM market;
- Will need to extend electric motor expertise to in-wheel hub motors, if the e-bike and scooter market becomes an objective;
- Self-driving and assisted driving technologies are not part of the current or future (yet divulged) product line and would have to be acquired.
In summary, the golf car industry will need to seek out companies that have as their objective, participation in the USM market, and arrange partnerships, or, possibly acquire such companies. This strategy, to be effective, would build on the strengths and corporate organization already in place.
