Looking forward in 2022 and into 2023 dealers will be facing the challenge of the increasing product sophistication of the PTV vehicles they sell and must service. While 2021 saw an upsurge in market demand for PTVs, in all likelihood it was just the beginning of a significantly higher rate of growth over the next five years
In Small Vehicle Resource’s newly published analysis of the small, task-oriented vehicle market, entitled, Trends and Outlook for the Small, Task-Oriented Vehicle Industry, 2016-2027, the PTV market is forecast to grow at an annual compound rate in the high single digits.This means that the market may virtually double by 2027 over 2019, the previous “normal” market year.
Factors driving more intensive use of PTVs
Small Vehicle Resource (SVR) identifies 5 key factors that will drive more intensive use of personal transportation vehicles:
- The rising cost of using conventional vehicles, as related to fuel costs, but also to routine maintenance (tires, oil change, lube, brake adjustment, etc.);
- Growing use of PTVs on public roads for quick trips to the grocery store, convenience shop, school, library;
- Clear indications that city and municipal transportation officials are actively considering public road use by small, electric vehicles for both consumer and commercial purposes;
- Increasing sophistication of PTVs themselves, including many current automotive features and a clear path toward more—to include Level 2 autonomous driving components;
- Changing public perception of PTVs from “mere” golf carts to a viable and smart alternative to conventional vehicle use.
Thus, for all these reasons the subtitle of the new SVR report is well chosen: Pathway to a New Era in Smart, Electric Vehicles.
Challenges for dealers in sales and service
The new breed of PTVs have a host of technical features that differentiate them from the carts of old. Such as electronic accessories including integrated LCD touchscreens, rearview backup cameras, electric power steering, moving from rear drum brakes to four-wheel disk brakes, drive-by-wire braking, and Bluetooth sound equipment.
None of these systems or components are beyond dealer skills to service and repair, but they are likely to require additional training and possibly involve an increase in both frequency and average time to repair. The investment in time and effort should be well worth it, given the market opportunity for increased sales, as note above. In addition, market growth will be supported—rather than hindered—by new regulatory measures which will come to the fore in the wake of newly available proactive safety technology, adapted to PTVs. Note the following.
Officials grapple with growing use of PTVs
A typical definition and set of rules at the local level can be seen in the following excerpt from a town council meeting in Holmes Beach, Florida:
A vehicle defined as a golf cart in Holmes Beach does not require a license plate. A low-speed vehicle can look like a golf cart, one of the mini-cars rented on the Island or other street-legal, non-traditional vehicles. These have license plates and can be driven in all three Island cities, except that they cannot be legally driven on state roads, including Manatee Avenue and East Bay Drive in Holmes Beach, although the vehicles can cross these streets. Because they are not supposed to be driven on Manatee Avenue, they should not be driven across the Anna Maria Island Bridge.
Note first the distinction between golf carts and low-speed vehicles. The latter needs license plates and are actually described, along with other vehicles, as being in a class of “street-legal, non-traditional vehicles.”
Next, the precise roads where LSVs can operate are described, which in this case include “…all three island cities…”, but cannot be driven on state roads, which are named in the discussion. This precise description of what you can and cannot do when driving a PTV is typical of the discussion in hundreds of communities across the country. Such local regulations cover municipal areas usually outside of individual gated communities which are likely to have their own set of rules.
It behooves dealers to be aware of such discussions, and, in fact, participate via written commentary and verbal testimony. These kinds of town meetings provide an opportunity to educate the public as to the attributes of LSVs, especially their safety features, and influence the formulation of public policy.
Safety is an on-going concern
In the same council discussion, Holmes Beach Police Chief, Bill Tokajer stated that his concerns about golf carts and low-speed vehicles “…primarily include safety and speed.” He also added, “The slower-moving vehicles on main roads, such as Marina Drive, which has a 35 mph speed limit in some places, can cause issues for car and truck drivers because the lower-speed vehicle slows traffic down.” Tokajer also worried about LSVs driving in the bicycle lanes to allow cars to pass, but which could result in collisions and injuries to cyclists.
Perhaps the most important thing to note is the multiplicity of vehicles involved, all of which have their advocates and supporters. These complexities are a challenge to city officials attempting to cope with the situation, and give dealers and manufacturers an opportunity to offer solutions.
The next major upgrade for PTVs/LSVs
While the current LSV models have passive safety components (seat belts, turn signals, front and back lights, etc.), which are required for certification, the next improvement in safety will be proactive devices such as front end collision warnings and avoidance (automatic braking), lane correction, and blind spot warning.
Level autonomy Illustrated
The illustration to the right indicates how Level 2 autonomy works. The key feature of this degree of autonomy is that sensory devices which pick up the presence of obstacles (e.g. another vehicle or a pedestrian) translate the electronic signals generated by the sensory device into commands that result in a physical reaction without the intervention of the driver.
A step back from Level 2 would be to simply generate warning signals, which the driver would then take appropriate steps to avoid a collision or hitting a pedestrian. Most current model conventional automobiles have such features.
What’s next for the PTV/LSV market?
Given the increasing sophistication of golf car-type vehicles in terms of comfort, style, and performance, plus with new added proactive safety systems, the market for these vehicles is very likely to be welcomed by consumers. More and more consumers for their part, have come to look at personal transportation vehicles as a desirable, even fashionable alternative to the conventional automobile in short-distance point A to point B mobility.
Other things equal, such conditions would suggest rapid growth of the market over the next 3-5 years and beyond. By the end of the decade it would not be unduly optimistic to see close to a million units come to market. Things are rarely equal, however, and the current period, end of the first quarter of 2022, is witness to crucial uncertainties, none of which carry the promise of early resolution.
SVRs forecast of the market environment:
Uncertainties abound
In SVR’s upcoming industry analysis, referenced above, the forecast identifies the major sources of uncertainty, which are familiar to most, whether they be consumers or manufacturers:
- Supply chain bottlenecks;
- Rising energy prices;
- Record inflation;
- War in Ukraine with the threat of a global conflict.
These issues, the outcomes of which at this time are quite unpredictable, cloud the forecast. The following assumptions underlying the industry outlook are reasonable, however, if hardly assured:
- Bottlenecks in the supply chain begin to ease as port congestion lets up and alternative domestic sources become available;
- Energy prices will rise somewhat more but stabilize;
- As a result of the above and restrictive monetary policy undertaken by the Federal Reserve, inflation will decline to the range of 2%-3% for the rest of 2022 and into 2023;
- The Fed’s restrictive monetary policy, while reducing inflation, will also negatively impact the economy’s growth to 1%-2.5% in real terms over the next 18 months.
SVR outlook for golf car-type vehicles
Of the three segments covered in the SVR industry report—fleet golf cars, personal transportation vehicles, and light duty utility vehicles, the personal transportation (PTVs/LSVs) will be the most important in terms of revenue share.
There is already a great deal of unmet demand for PTVs which manufacturers and imports must meet and fulfill. This alone would add 6%-7% of growth over 2022, if not more. Over and above this, the growing popularity of PTVs as an alternative to conventional on road automobiles should add another 5%-6% of growth to the market. High single-digit growth over the next four or five years after 2022 is a strong possibility.
The market becomes more competitive
The market in coming years will see much greater competition. It will no longer be dominated by the Big Three—Club Car, E-Z-GO, Yamaha—but will see strong competition from the likes of StarEV, ICON, and Evolution. And these are no longer cheap knock-offs of Big Three models, but rather quite sophisticated, stylish vehicles. Tomberlin, more identified as a U.S.-based company, is also aggressively building its market share.
The evidence of growing competition is very clear: In 2021, imports of golf car-type vehicles, 90%+ from China, more than doubled to over 60,000 units, according to U.S. Department of Commerce trade figures.
The bottom line is that:
- Consumers will have more product to choose from at competitive prices;
- Dealers, despite the challenges of many types of product upgrades, should see major gains to their business.
Details of current trends and the forecast to 2027 can be found in SVR’s industry report.
Contact the author at smetzger@smallvehicleresource.com or phone us at (914) 293-7577 to order your copy.
