Growing spending on outdoor recreation, especially among millennials, continues to be a driving force for the off-highway recreational vehicles market, finds a new research study by Fact.MR. The market is likely to grow at a CAGR of nearly 16% through 2028, as a growing demographic of outdoor enthusiasts drives demand. The bullishness in the market can be offset by regulatory pressures concerning the threat to environment and rural communities.
The report finds that off-highway recreational vehicles market has also been negatively impacted by product recalls and notable faults in prominent brands. The US$ 27.25 million civil penalty on Polaris Industries for failure to notify the United States Consumer Product Safety Commission (CPSC), and American Honda’s decision to recall nearly 65,000 recreational off-highway vehicles due to fire and burn hazard have led to a significant dent in consumer confidence. The increasing spate of product recalls and performance issues can create impediments to growth, finds the study. The report also finds that off-highway recreational vehicles landscape is tightly regulated in European Union, with Greenhouse Gas Reporting Program (GHGRP) having a major influence on product launches.
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Need for Speed Fuels Petrol Variants, Electric Gaining Ground Steadily
The prevailing low crude oil prices have meant that sales of petrol recreational off highway vehicles have remained robust. According to the report, petrol recreational off highway vehicle sales totaled nearly 166 thousand units in 2017 – higher than both diesel and electric variants.
End-users continue to show a marked preference for 4-seater off highway recreational vehicles. 4-seater off highway recreational vehicles will continue to be the top-selling variant, with 2-seater and crew size following suit. On account of this, the market is likely to witness launch of high-power 4-seater petrol variants during the assessment period.
According to the study, off highway recreational vehicles are available in a range of engine displacement capacities – from 400cc to over 900cc. Global off highway recreational vehicle sales continue to remain concentrated in the 750cc segment, whereas over 900cc variants continue to witness sluggishness.
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OEM is the leading channel for off highway recreational vehicles globally, accounting for a leading revenue share of the market. Availability of a wide range of off highway recreational vehicles, combined with familiarity of off-highway enthusiasts with OEM dealerships remain key factors for the pervasiveness of this sales channel. The report expects OEM to remain the prominent sales channel for off highway recreational vehicles during the assessment period.
Global off highway recreational vehicle sales remain concentrated in the US, making North America the largest market globally. Sales in North America are likely to surpass 159 thousand units by 2018, with the US accounting for bulk of revenues. In addition to the US, manufacturers can also expect a steady stream of opportunities to emerge in Europe and Asia Pacific. Currently, Middle East & Africa (MEA) is the smallest market for off highway recreational vehicles market in terms of sales; however, the push by several Middle Eastern governments to develop a services-based industry is likely to create opportunities in the long run.