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ATV Industry Challenges and Opportunities in 2021

The All-Terrain Vehicle (ATV) Industry today comprises a surprisingly complex business sector. It includes both manufacturers and retailers who sell ATVs and related products. Many questions remain concerning the impact of the global coronavirus pandemic on this niche market.

Assessing the extent of the ongoing demand for these products also proves problematic (in some respects). Both a wide array of product lines and the invention of exciting new technologies have enhanced the ATV market during recent years. Analysts frequently group ATVs with slightly larger and more expensive Utility-Terrain Vehicles (UTVs) or Recreational Utility Vehicles (RUVs).

Assessing The Impact of The Pandemic

Perhaps the most immediate challenge for businesses in this sector during 2021 will involve evaluating the extent of the impact of the recent pandemic. Some manufacturers experienced short-term shutdowns during 2020 due to health-related emergencies. Yet at the same time, demand for these recreational products soared, creating sporadic inventory shortages.

Did the closure of many other entertainment outlets during the pandemic contribute to the spike in demand for ATVs? Some households reported spending money previously dedicated for vacations on the impulsive purchase of all-terrain vehicles instead. Yet analysts have widely predicted robust future growth in this marketplace through 2025. Determining the duration of the upsurge in interest in ATVs could prove critically important for manufacturers this year.

Clarifying The Scope of The Market

Another challenge confronting ATV sellers this year involves defining the industry. Today, numerous manufacturers produce not only smaller scooters and ATVs but also somewhat larger UTVs. Assessing the value of the marketplace accurately requires clarifying whether sales figures apply to both types of recreational vehicles or only to ATVs.

Reportedly, new ATVs command prices ranging from $4,000 to $16,000. UTVs typically include passenger seats and a greater cargo-carrying capacity. These bigger vehicles range from $8,000 to $18,000 in price. Recently, some companies have begun producing XUV crossover utility vehicles as a distinct category of recreational off-highway vehicles (ROV), too.

Promoting Safety

Yet another ongoing challenge for the ATV industry concerns safety. Despite recent legislative action, unacceptable casualty and fatality rates still cause public concern. Some 300 to 400 people die annually in the USA alone from ATV-related accidents. Children remain at high risk from this source since they are sometimes crushed by tipped-over vehicles.

During the pandemic, ATV accident rates rose in some states. Minnesota reported 19 fatalities connected to ATVs as of September 23rd. ATV accidents also sent five seriously injured children under 10 years to Hennepin County’s ER.

Establishing Dedicated Public Use Areas

One of the opportunities for expanding the ATV industry potentially lies in the creation of dedicated use areas for these off-road vehicles. Since this equipment easily damages sensitive ecosystems, many parks won’t authorize the use of this transportation outside of specified sites. Most jurisdictions in the USA and Canada do not allow these vehicles on public roads, either. Landowners currently constitute an important market for all-terrain vehicles.

Consequently, non-landowners may enjoy limited opportunities to use this equipment. Some states, including West Virginia and Georgia, have created special-use ATV trail systems. Obtaining well-maintained, dedicated ATV recreational areas might benefit this industry.

Product Development

Another possible opportunity for manufacturers this year involves developing specialized new ATV models. In addition to recreational uses, ATVs serve a variety of industries. The largest U.S. manufacturer, Polaris, recently released special editions for different hunting terrains.

Currently, ATVs assist sports competitions, the military, oil and gas producers, law enforcement, surveyors, wilderness firefighters, EMS departments, and search and rescue operations. This technology potentially enjoys wide utility.

Striving to Meet Market Demand

As 2021 progresses, it remains unclear whether or not the present high demand for ATVs and UTVs will continue. The resolution of the COVID-19 pandemic and the reopening of the hospitality industry might slow sales. Additionally, an uptick in ATV-related accidents has renewed ongoing concerns about safety issues.

Yet extensive room exists for the development of innovative new product designs in this industry. The ability of manufacturers to address these challenges and opportunities effectively should prove important during 2021.