BRP assesses two-wheeled motorcycle industry among options to drive growth

0


MONTREAL – The manufacturer of Ski-Doos, personal watercraft and three-wheeled Spyder vehicles is evaluating whether it wants to enter the two-wheel motorcycle business to help fuel its dynamic growth plans.

“We are in an ongoing process of assessing the market, looking at different possibilities and trends,” BRP spokesman Sylvain Morissette said after an industry analyst suggested motorcycles could be the the next growth engine for the Quebec company.

“Motorcycles could be an option as we have done in the past.”

BRP Inc. (TSX: DOO), which was derived from Bombardier Inc. (TSX: BBD.B) in 2003, sold Can-Am motocross motorcycles in the 1970s.

Morissette said BRP sees plenty of growth opportunities, but wouldn’t say how soon a decision on the motorcycles might be made or when they might enter the market.

For now, the company is focused on expanding its current products. On Wednesday, she showcased three new 2017 models at an industry event in Orlando, Florida. BRP will sell a Can-Am Maverick X3 side-by-side vehicle, a new Sea-Doo Spark TRIXX and a Can-Am Spyder F3 Limited.

The Can-Am Maverick is the third side-by-side vehicle introduced since last September. BRP has committed to expanding its product line every six months through 2020. The Valcourt, Que., Based company predicts profits will grow nine percent per year to $ 6 billion by the time. fiscal year 2021.

Desjardins Capital Markets analyst Benoit Poirier sees great promise in motorcycles. He estimates that BRP could add $ 325 to 600 million in annual revenue over time and gain three to five percent of the market share.

“This market is supported by strong fundamentals for the foreseeable future, and we believe BRP has the key elements in place to enter the segment either organically or through an acquisition,” he wrote. in a report.

Poirier said 82 percent of North American powersports dealers sell motorcycles and would be happy to add a new product. BRP has a worldwide distribution network with more than 4,200 dealers in around 100 countries.

He said BRP could leverage its engine expertise and Mexican manufacturing operations while increasing aftermarket sales.

However, Andy Galliher, general manager of Freedom Cycle in Concord, New Hampshire, said sales growth was very weak outside of off-road motorcycles.

The dealership, which sells five brands of motorcycles, says BRP would struggle to enter the market due to difficulties faced by other manufacturers.

“I think it’s a tough market to come up with a whole new product and a lot of guys have a lot of years of experience under their belt,” he said in an interview.

He doubts BRP will go ahead, but says buying from another manufacturer would be the company’s smartest move. This would allow BRP to enter the market with an established brand. Still, Galliher said BRP tends to start from scratch and leverage its engineering expertise.


Share.

Leave A Reply