Progress and Profit in the Small, Task-Oriented Vehicle Industry: An Assessment at Mid-Year

by Stephen Metzger PhD,
Managing Director, International Market Solutions
Editorial Advisor, Industrial Utility Vehicle & Mobile Equipment Magazine

The small, task-oriented utility vehicle is everywhere to be seen and is everywhere growing new markets, as end-users contrive new, task-solving accessories, and manufacturers, dealers, and assemblers scramble to meet these ever-evolving needs.

Where are we in the golf car/utility vehicle industry and marketplace at mid-year 2007? No better place to make an assessment than a comprehensive look at the early-in-the-year trade shows, the Professional Golf Association (PGA) Show and the Golf Superintendent Show (GIS), held in Orlando and Anaheim, respectively. At these shows the foundations for the model year are laid and from which the full-year's marketing and sales efforts spring.

How Do You Characterize the Golf Car?

Dropping the "t" from "golf cart" is more than window dressing. The traditional golf cart has, for quite some time, been taking on many diverse roles, both as a personal transportation vehicle and as the basic structure of a wide range of light duty utility vehicles. Thus, the move from "cart" to "car" is certainly warranted.

Moreover, golf cars keep straying from the mother ship with new adaptations, even while the golf car itself continues to be upgraded in a variety of ways. Testifying to the pull from the marketplace is the creation within Club Car, E-Z-GO, and Yamaha of divisions specializing in custom-built vehicles, wherein end-users submit their needs and the vehicle is essentially built to order.

Such custom-builts are, of course, put together on top of a golf car basic body, including suspension, braking system, and power source. (As body types themselves diversify, as these companies move into more robust utility-type vehicles, customization potential actually multiplies.) These relatively new divisions are, at least in part, intended to create a real time product development system such that if a particular adaptation appears to have general application, the custom-built moves to the assembly line.

What Is a Utility Vehicle?

It is becoming progressively more difficult to precisely define a utility vehicle because of the overlaps in products and markets, smudging the lines between what were traditional heavy duty vehicles, as opposed to light duty haulers and transporters; gas/diesel-powered versus electric. This should not be unexpected. Look at the mainstream automotive market. The sleek, outdo your neighbors sedan or coup, to be clearly differentiated from the pick-up truck, has been morphed into the SUV now for almost a decade.

The crossover between transportation elegance and utilitarian performance is a paradigm now being emphatically emulated in the small vehicle market. Of course, there are differences, but the point is that versatility is a highly desirable product characteristic. Usually versatility comes with a price, because it usually denotes niche markets and relatively small volumes, but manufacturing technology has also evolved to dramatically affect the cost-volume trade-off.

At the extremes of required performance utility vehicles can still be clearly differentiated. At the heavy-duty end of the scale we find the likes of Kubota's RTV series of 21-25 hp diesel-powered vehicles, while at the light duty side of the spectrum are a host of vehicles built on the golf car frame, such as Club Car's Transporters and Carryalls and E-Z-GO's Industrial 800 series. In presenting the wide range of products it is important to recognize that virtually all of the products are designed for particular market niches and do not necessarily compete with one another directly.

Utility Vehicle Sales and Distribution: Another Defining Dimension

Utility vehicle manufacturers tend to address traditional market segments where there has been a historical presence for one reason or another. Thus, the John Deere Gators are sold through the company's agricultural sales and distribution network, the Kawasaki Mule is sold through recreational dealers, and Club Car and E-Z-GO have their own dealerships, historically tied to golf car fleet sales and services. All these companies and many others have converged on the utility vehicle market, seeking out various niches and opportunities.

With All This Diversity, How Do Manufacturers Meet Customers' Needs?

If on the demand side, the small, take-oriented vehicle market is known for its almost bewildering diversity of requirements, what allows the industry to meet these requirements, to continually innovate, and to prosper despite relatively small volumes for individual models? The answer is a little publicized but profound evolution in manufacturing technology.

The manufacturing techniques developed by SI Systems, Easton, PA, are behind a good deal of the flexibility with which the small vehicle industry meets customer demands. SI Systems designs and installs manufacturing systems for many vehicles and equipment manufacturers from ultra-heavy duty construction equipment to golf cars and recreational vehicles.

Bill Casey, President and CEO of SI Systems points to two key developments in the manufacturing process. "Our floor-based conveyor systems allow four-sided access to the vehicle and gives much greater flexibility to the assemblers on the line," says Casey. Secondly, he points to sophisticated software and workstation readout screens that systematically direct workers to the proper parts bin and track individual vehicle modules as they progress along the line. "This allows," he continues, "different vehicle models to be lined up one after the other without slowing down the assembly process."

Given the needs explosion and the manufacturing methods to meet it, the long-term prospects for the golf car/utility vehicle industry look extremely good.

New Models, Latest Trends

IUV magazine made a point of attending both the Professional Golf Association show and the Golf Industry Show in Orlando and Anaheim, respectively, in order to see the latest model offerings, new component developments, and speak directly with sales reps and engineers of most, if not all the major brands.

While little of a revolutionary nature was evident, there are clear trends responsive to the widening needs of the market. These trends include the on-going movement toward alternative fuel options, including electric power (although conventional gas and diesel predominate), undercarriage developments in differentials, braking systems, and suspensions to meet the more demanding environments in which utility vehicles are progressively expected to operate, and the growing presence of offshore competitors.

The Evolution of Golf Cars: Yamaha's The Drive

While the buggish appearance is still quite apparent, the golf car as a personal use vehicle with lights, seatbelts, and other accoutrements, such as lift kits, larger tires, and greater power is a growing reality, responding to grassroots demand. Outfitted with a rear storage platform or additional seating, a protective cab, and a hitch the once fleet golf car, which has morphed into an LSV, becomes a bonafide utility vehicle, capable of handling a whole range of diverse tasks in the proper environment.

As is well-known, the basic golf car frame, its extensions, and drivetrain are the foundation for utility vehicles that could be described as light portage and transport, as well as personal use LSVs. Therefore, modifications and refinements to the basic golf car, while intended primarily for the fleet market, have a beneficial spillover effect for utility and personal use markets.

A good example of this is Yamaha's The Drive, launched at the PGA show. While keeping the basic electric and gas power systems, the company has introduced a series of refinements that will be attractive in a variety of end-uses in addition to the fleet market. These include a HybriCore™ chassis featuring an automotive, ladder-style welded frame "mated", or bonded, to a polypropylene structural floor. The connotation "structural" is important in that the floor itself adds strength to the frame and provides a non-corrodible undercarriage that affords protection to the batteries and all above-the-frame compartments.
The Drive also incorporates a completely enclosed rear wheel disc brake system, which Yamaha calls EnduraDrive™, and which replaces conventional brake drums and shoes. The system was developed with TEAM Industries, Detroit Lakes, MN and involves a unique wet disk brake system integrated with the differential. Activated by a single brake cable, the new system eliminates brake drums and shoes at the rear wheels and affords considerable weight reduction. Further weight reduction is achieved through an all aluminum housing and aluminum axle casings.

With these innovations, and along with ergonomic improvements including contoured, lower seating and redesigned driver angle, Yamaha claims its new entry in the fleet market will "revolutionize the golf industry". And it might well do that. In addition, the new fleet entry is likely to provide a higher quality platform for the personal use and light utility segments. Yamaha currently has five models (three gas, two electric) in its light to medium duty, U-Max utility vehicle line.

Club Car Adds Electric Power to Its Turf Line-Up

Club Car continues to add significant features to its product line of turf vehicles. Most notable, and on full display at the Golf Industry Show, is the Turf 252 with the IQ Plus electric drive train. The Turf 252 gas version has been on the market for a number of years. The new electric model will feed into a utility market segment that is increasingly electric, although still dominated by internal combustion engine vehicles. The Turf 252 electric must demonstrate equivalent or at least adequate power as compared to competitive gas versions, and have sufficient range to assure turf management tasks can be carried on effectively over the far reaches of typical golf course property.

According to Eric Andrews, Club Car General Manager for California, the Turf 252 with IQ+ and 500 amp electric motor, has better torque than the gas model and has a range of upwards to 70 miles. The increased range is accomplished, according to Andrews, through charge optimization and tweaking of gear ratios in the differential.

Given the natural environment of the golf course, increased environmental regulations, especially in States like California, and the fact that many golf courses involve contiguous gated communities, where quiet operation is valued, if not demanded, the move toward electric power in turf and golf course maintenance vehicles is likely to gain momentum.

Heavy Duty Utility Segment Expands Industry Offerings

A number of manufacturers are stepping up to heavier duty turf operations with vehicles that are sold into a good number of other end-use markets besides golf, such as construction, farm and ranch, outdoor storage facilities, and recreation. Most of the heavy duty vehicle manufacturers exhibiting at the GIS have complementary product lines that sell into the golf or golf-related market, such as commercial mowers, irrigation systems, and compact tractors.
Familiar vehicles include Toro's Workman™ product line and the John Deere Gator™ Series. Somewhat new to this segment, insofar as attracting the attention of golf course superintendents is concerned, are Cub Cadet, Jacobsen and Kubota. Toro, John Deere, and Jacobsen are, of course, well-known for their respective lines of commercial mowers.

Cub Cadet offers a series of 4X2 and 4X4 utility vehicles that are suitable for turf maintenance operations, but clearly are versatilely-designed to meet the needs of other market segments, such as hunter, recreation, and construction.

In a similar vein Jacobsen's Cushman® Truckster®, featuring a 32 hp gasoline engine (26 hp diesel) is designed for turf maintenance operations with a wide variety of attachments from sprayers, to spreaders, to seeders. The renown Cushman brand is being parceled into a variety of segments, sporting the Jacobsen orange in turf products and the familiar yellow in models similar to the Truckster in the industrial segment.

The Kubota Tractor Corporation joins the one-model fits all needs group with its RTV-Series. The most striking model in the line is the RTV1100, a 24.8 hp diesel-powered vehicle with a factory-installed, fully integrated cab, which includes air-conditioning. Possibly inspired by the company's M-Series heavy duty tractors, the factory-installed cab on the RTV1100, makes the vehicle an all-weather performer and sensitive to creature comforts that many competitors neglect. Increased comfort often comes at a higher price, but the payoff is higher productivity.

Toro has introduced the e2065 Workman®, mid-duty electric utility vehicle with a 500 amp drivetrain, eight 6V Trojan T145 batteries for greater range, and a hydraulic four wheel brake system. The benefits of quiet operation are combined with significant power and range comparable to gas-powered vehicles in the same class.

John Deere, for its part, featured the 2020A heavy duty Gator™ utility vehicle at the GIS, which comes with a Yanmar gas or diesel engine, a 5-speed synchromesh transmission, and a manually-engaged four wheel drive. The vehicle is capable of 19 mph, but has a 4th and 5th gear lock-out feature to limit speed when desired. The 2020A also has a redesigned hydraulic pump system which works off the crankshaft instead of the engine's gear train, producing a higher flow rate. It also has an independent steering pump insuring that steering performance is maintained while other hydraulically driven implements are being used.

New Technologies and Product Advances

The Toro Company had on display a hydrogen-powered fuel cell utility vehicle at the GIS, based on the Toro® Workman® chassis. The vehicle is part of a New York State demonstration program created in response to former Governor Pataki's Executive Order 111 to adopt "Green and Clean" State buildings and vehicles. Toro's contributions will be one each Heavy Duty and Mid Duty Workmans, along with a fuel cell-powered Greensmower® lawnmower.
The New York State Energy Research and Development Authority (NYSERDA) is contributing $380,025 to the project, while the New York Power Authority (NYPA) will build the hydrogen refueling infrastructure at the demonstration site (Niagara Falls State Park). Toro's products will be powered by fuel cells provided by Hydrogenics and Nuvera.

According to Jack Gust, R & D Chief Engineer, at Toro's Center for Advanced Turf Technology in Toro's Product Research and Development group, the logic behind the multiple equipment items is that "...it is unproductive and inefficient to build a hydrogen infrastructure to power only one type of vehicle. On the other hand, if the hydrogen infrastructure provides refueling for the whole gamut of equipment that could be found at a park or golf course, it makes a lot more sense."

Toro is also adapting its equipment to other alternative fuels–biofuels in particular. All its diesel-powered golf course and sports field and ground equipment will be biodiesel ready by 2008, according to company spokeswoman, Sandra Donnelly. This will include the Toro Reelmaster®, Groundsmaster®, and Greensmaster® mowers, and the Workman® and Multipro® product families. Other diesel-powered equipment will be adapted as time goes on. The company is also creating upgrade kits for these products to convert equipment in the field or in production to the use of biodiesel fuels.

Despite advances in alternative battery technology on several fronts, lead-acid battery technology still predominates as the go-to power source for electric utility vehicles, and king of the deep-cycle lead acid manufacturers remains Trojan Battery of Santa Fe Springs, CA. The company has introduced some nitty-gritty structural improvements to its battery family, called the Plus Series™ . These improvements include a patent-pending SureVent flip-top vent cap system, water level indicators in the vent filling wells, and die-cast embedded terminals. Combined, these improvements significantly aid in battery maintenance and durability. These features are currently available on Trojan's 6-volt batteries, and in the near future, on its 12-volt T1275 battery now, an OEM component for Club Car and Yamaha golf cars.

Components Manufacturers Lead the Way Toward Major Performance Upgrades

The trend toward greater power and versatility can be seen in new developments being pioneered by components manufacturers. Perhaps the best example of this is TEAM Industries. This innovative company, headquartered in Detroit Lakes, MN, is now supplying its patented wet brake technology to Yamaha's The Drive golf car, which was introduced at the PGA show this year. As Stephen Fagerlie, Director of Marketing & Product Development, states, "The challenge [in a wet brake system] is to be able to brake across the differential without biasing the left or right side of the vehicle in the braking process." With Yamaha's incorporation of the technology in its new golf car entry, that challenge has apparently been successfully met.

TEAM Industries supplies four-wheel drive systems to the likes of the Polaris Ranger, E-Z-GO, and Club Car, and has also developed a new four-wheel drive activation system called SmartLocker™. This system incorporates an microprocessor-based activation mechanism that reacts immediately and smoothly thereby avoiding lags in four-wheel drive engagement. In addition, the SmartLocker™ utilizes a true differential, which eliminates the clunks, ramp-ups, and surges that are present in other systems.

AC electric motors, while yet to be incorporated in a production line golf car or utility vehicle, are, nonetheless coming to the fore. Advanced Motors & Drives out of East Syracuse, NY is experiencing a surge of inquiries regarding AC motors. "Ninety to ninety-five percent of the calls we get are AC inquiries," says Rob Kress, Sales and Marketing Manager. Kress adds, "We see the demand [for AC motors] starting in material handling equipment segment, where it has already taken hold, with golf car and utility vehicles to follow." Rumors continue to fly that one of the major golf car companies will be coming out with an AC-driven vehicle. Most of the speculation involves E-Z-GO.

Hi Performance Golf Cars, Inc. of Ontario, CA is another, and perhaps the foremost pioneer in the field of automotive adaptations of AC electric motors and controllers. A visit to their factory discloses a wide array of prototypes and electric power conversions that the company has undertaken. Brian Seymour, President, has also developed a proprietary programmable AC controller system that optimizes power, speed, and range. He describes the innovation, as, "A write-only programmable system, which we have copyrighted, that can be specifically programmed to optimize performance based on usage requirements."

Where will the volume business come from? "In California," Seymour says, "it's with the government fleet market." And to that end Hi Performance AC drive systems are available in e-Ride vehicles, the product of an aggressive start-up, e-Ride Industries, headquartered in Princeton, MN, that is currently prospecting the California State government fleet market.

The Array of Imported Vehicles Grows

The representation of foreign manufacturers at both the PGA and GIS shows this year was impressive. Products ran the gamut from golf cars to heavy duty utility trucks and vans.

Fairplay Electric Cars under the leadership of CEO David Johnson is making headway in the highly competitive fleet market. The Fairplay product line is manufactured in China with U.S. headquarters in Grand Junction, CO. Presently, the company has over 120 dealers throughout the United States. Its all-electric product line features a 5.5 hp and 4.0 hp basic golf/personal use car with stretch varieties for additional passengers.

Fairplay also had on display a newly configured utility vehicle, the XD Series. This electric-powered utility vehicle features a 6.5 hp advanced DC motor and a 400 amp DC controller. The vehicle has four wheel hydraulic brakes (front disc/rear drum) and 1,000 pound total bed capacity.

Another Chinese import, Marshell, is a product of Shenzhen Marshell Green Power Company, Ltd., with offices and factory in Shenzhen, China. (Shenzhen is located in close proximity to Hong Kong.) The company's U.S. headquarters are in Foothill Ranch, CA. In addition to golf cars, the company makes a variety of electric-powered products from handicapped mobility vehicles to golf caddies. Dong Li, President of Marshell, states that his factory is one of only two in China that have been officially recognized as having met government quality standards. He is currently in the process of initiating and building a sales and distribution network in the United States.

Mag International, Fountain Valley, CA, exhibited a line of "mini-off road" utility vehicles at the GIS. These are gas-driven trucks in various configurations with 955 cc OHV engines. Mag International is the U.S. distributor for this Chinese-made product.

Scott Mallory, President of Fore-Par, one of the largest aftermarket parts suppliers in the U.S., stated, "Moving to China is the name of the game." His company has been sourcing parts from China for some time and now sees opportunities in introducing products made in China for newly introduced models, rather than wait three years as parts are needed for older vehicles. In particular, he says, "We have been working with OEMs to introduce AC drives."

With the exception of Fairplay, Chinese companies have negligible to limited presence in the U.S. market. In the area of golf car and utility vehicle parts, however, much sourcing is done by U.S. companies. With this activity building, it is not surprising that the parts are being put together in China and that the whole vehicle stands ready for shipment. Most of the small vehicle activity in China centers on electric vehicles, so that the emergence of Chinese products in the U.S. market will depend not only on developing sales and distribution channels, but, ultimately, on the growth of the electric vehicle market itself.

Summing Up and Looking Ahead

While golf cars and turf utility vehicles are oriented to the golf market, most of the vehicles on exhibit at the PGA and GIS shows are versatile in application and will be widely distributed in many other market segments. This year's products include refinements galore from wet brakes to better hydraulic performance to more operator comfort. The most exciting "whole package" is Yamaha's The Drive, both from the standpoint of its multiple improvements and innovations and the gestalt of its overall refined appearance.

Electric power is inching its way into the turf utility field with Toro's e2065 and Club Car's 252 with IQ+. If these vehicles prove comparable in terms of performance and consumer satisfaction to their ICE cousins, the market for mid-duty electric-powered vehicles should significantly expand as the country as whole turns greener and greener. And their attraction will extend considerably beyond the golf course.

Virtually all major companies are fielding a multipurpose, off-road utility vehicle of the sort pioneered by Polaris and Kawasaki and which has enjoyed significant market growth over the past four years, or so.. So far, this vehicle type remains solidly ICE, with the exception of Fairplay's XD, but is likely to find wide acceptance for the more rugged turf and grounds-related chores.

Major technological improvements or significant new applications of existing technology are not in evidence so far this year. Nonetheless, the entrepreneurial drive of the industry, especially on the part of components manufacturers, continues to feed into the end market in small but significant ways. At the mid-point of 2007 the industry seems, on the surface, to be floating along in a slow-moving but consistent current that indicates on-going progress and refinement. Below the surface? Who knows?

About the Author:

Stephen Metzger is Managing Director of International Market Solutions (IMS), a management consulting firm, whose prime focus is putting companies into the international market arena on a cost-efficient basis. Mr. Metzger is also Principal of International Competitive Assessments (ICA), the market research arm of IMS, which he founded in 1980. ICA has undertaken extensive market research and consulting assignments covering a broad range of products and markets over the firm’s 25-year history. Mr. Metzger and his staff and associates have produced three ground-breaking studies of small, task-oriented vehicle market in the United States since 2000 and devote most of their efforts to this rapidly emerging area. Mr. Metzger, an economist by background, is, in addition to his full time consulting work, adjunct professor of business and economics at Iona College and Mercy College, both located in Westchester County, New York.