Market Snapshot: Sports and recreation

Even having fun has been impacted by the economic downturn, but that doesn’t mean people are giving up their favorite pastimes. Nor are many OEMs in this market backing off of innovation and new products.

Although the economy is putting a damper on things, folks are still looking for ways to enjoy themselves. When times are tough, people often participate in local sporting events and engage in entertaining activities closer to home that require less spending. But the numbers tell the true story.

DuPont’s Zytel was used in many of the components on bicycles used in the 2008 Summer Olympics in Beijing.

Ticona’s GUR UHMW-PE is used in this sliding rail for the Power-slide inline skate due to its very low wear and low friction loss.

BRP’s Sea-Doo GTX features advanced computer control technology that provides the world’s first on-water braking system.

According to the Sporting Goods Manufacturers Assn. (SGMA), the U.S. sporting goods industry was a $66.3 billion business (at wholesale) last year, down 3.2% from 2007. The report, released on April 2, 2009, said that a “perfect storm of rising energy, labor, raw material, and transportation” costs affected manufacturers. For the first time since 2003, the sporting goods industry did not outperform the national GDP rate. “This was a tough year, as evidenced by the first decline in manufacturer shipments since 2003,” said SGMA president Tom Cove, commenting on the report.

“Given the overwhelming economic uncertainty at present, it’s hard to say 2009 will be better. However, despite the weak economy and rising costs of doing business, there is no indication that Americans are less involved in sports, outdoors, and fitness activities than before the recession, and history tells us that giving them up is one of the last sacrifices dedicated participants are willing to make,” Cove concluded.

Materials solve many challenges

Piaggio, Italian maker of motorcycles, chose DuPont’s Zytel HTN for its liquid coolant Low Emission Advanced Engine Range (LEADER). Zytel HTN has better sound- and vibration-dampening characteristics than engine covers made of similar polymers, according to DuPont. The 35%-glass-reinforced material was chosen because of its high temperature resistance and increased flex modulus, dimensional stability, rigidity, and tensile strength. Also important is the material’s heat-aging characteristics and high glass transition temperature performance. Additionally, Piaggio sources say using Zytel HTN simplifies production, saves weight, enables design freedom, and achieves cost savings of around 25%.

DuPont’s materials for sporting goods played a big role in last summer’s Olympics in Beijing. Applications in cycling included Kevlar for helmets and tires. DuPont’s Delrin, Zytel, Crastin PBT, and Rynite PET provided optimum performance for cyclists under severe conditions for bicycle workings such as derailleurs, brake handles, levers, and wheels. Cycling accessories use Delrin in sprockets, and Delrin and Zytel for switch handles, speedometer components, lamp components, and brake handles.

Ticona Engineering Polymers finds its GUR ultrahigh-molecular-weight polyethylene (UHMW-PE), Hostaform acetal copolymer (POM), and Celstran long-fiber-reinforced thermoplastics (LFRT) materials in demand for sporting goods applications. GUR UHMW-PE offers exceptionally high notched impact strength, very low wear, low friction loss, and high stress crack resistance, which lends durability to products that take a beating, according to the company. For example, GUR UHMW-PE is used for a chain track wheel for snowmobiles, as well as the sliding rail for inline skates.

Recreational products molder holding steady

The market is down, but not out, says Bob Janeczko, president of the West Des Moines, IA custom injection molding company i2tech (Innovative Injection Technologies). “We’re heavily involved in the recreational industry,” he says, “particularly the power sports products such as snowmobiles and ATVs, and we have a lot of plastic in personal watercraft.”

While new projects seem to be moving a bit slower, Janeczko sees a lot of movement. “Our recreation customers are not forsaking the future,” he states, “and in fact are planning model updates and product revisions within their families of products.” Arctic Cat (Minneapolis, MN), for example, has made “major design changes” and that market (personal watercraft, snowmobiles, and so forth) overall is active with new inputs, explains Janeczko.

On May 28, Arctic Cat released its quarterly report, and while on the surface it didn’t look great, the company’s outlook is very positive. The company reported a net loss of $16.7 million on net sales of $90.7 million for the fourth quarter ended March 31, 2009, which was within the company’s previously stated guidance range. For the 2009 full fiscal year, Arctic Cat posted net sales of $563.6 million compared to $621.6 million last fiscal year, and a net loss of $9.5 million vs. a net loss of $3.3 million in fiscal 2008.

“Arctic Cat was profitable through the first nine months of fiscal 2009, due to increased snowmobile sales to dealers and distributors and lower operating expenses, but overall retail demand for recreational products remained weak in the fourth quarter as expected,” says Christopher A. Twomey, Arctic Cat’s chairman and CEO. “In light of the difficult retail environment, we continued our plan to further reduce dealer inventories during the quarter, resulting in lower inventory levels across all product lines. However, this necessary action negatively impacted the company’s revenue and profitability for the fourth quarter and full year.”

Innovations are moving forward among many companies in the power sports industry, evidenced by Bombardier Recreational Products Inc.’s (BRP) receipt of the National Marine Manufacturers Assn. Innovation Award for its Sea-Doo GTX Limited iS watercraft. BRP’s (Valcourt, QC) revolutionary new watercraft features iControl, an advanced computer control technology that seamlessly integrates what the company says is the world’s first on-water braking system with iBR (intelligent Brake & Reverse) and rider suspension system with iS (intelligent Suspension) to give the rider more control than ever before.

BRP claims its Sea-Doo GTX Limited iS watercraft is the most advanced recreational vessel launched in decades, featuring many new technologies for a better ride. In addition to the first water braking system and full rider suspension, the Sea-Doo GTX Limited iS features the S3, a high-performance stepped hull design.

Polaris Industries Inc. (Minneapolis, MN) recently unveiled its 2010 lineup of new snowmobile products that include Terrain Dominating Control (TDC)—a feature that combines durability, balance, power, and suspension. One of these models is the 600 Rush with a Pro-Ride chassis, which Polaris says is the industry’s first and only true progressive-rate rear suspension. Other new products include the 600 LX and Turbo LX, as well as a new versatile utility model, the 600 WideTrak IQ. The new lineup of snowmobiles for 2010 was unveiled at the company’s dealer meeting in March.

“New product innovation is always the driving force for Polaris,” says Scott Wine, CEO of Polaris Industries Inc. “Polaris is thriving because of our innovative products, enabling us to be a power sports leader while delivering first-of-its-kind Terrain Dominating Control in our 2010 lineup, all of which will continue to fuel growth and gains in all market categories.”

In spite of this approach, Polaris felt some pain from the economic slump. For Q1 ended March 31, 2009, the company reported net income of $8.5 million compared to $19.1 million in Q1 2008. First-quarter 2009 sales were off 20%, down to $312,024 from $388,684 in Q1 2008. Wine acknowledged the tough economic environment. “While the outlook for the remainder of 2009 remains challenging, we continue to proactively take steps to streamline our business and optimize our cost structure,” he says. “Going forward, our strategy remains unchanged; we will continue to leverage our innovation, speed-to-market, and flexible manufacturing capabilities to gain market share while focusing on improving our operating margins.”

Janeczko remains optimistic about the recreation market that i2tech serves. He notes Kawasaki’s new product launch, the 260 Jet Ski, for which i2tech won a design award. “We’re seeing this with many of our recreation customers—advanced model introductions and new product lines,” says Janeczko. “They’re seeing the potential for consumers to upgrade. But companies in the power sports market like Arctic Cat have made intelligent decisions in not flooding their dealers with inventory. It’s a positive sign for them to get their inventory in the right position, poised for the market to cut loose later in the year when it’s projected that pent-up demand will boost sales. We’re hearing that the fourth quarter will be good, and there are projects and new products coming online.”  [email protected]

Comments (0)

Please log in or to post comments.
  • Oldest First
  • Newest First
Loading Comments...