Bassett’s Blog : Cat Lays off 65 As Slow Sales Settle In

Just as Polaris did earlier, Arctic Cat accepted the reality of the marketplace and decided to cutback, dropping up to 65 employees from its ranks. Most of the cuts came in the Thief River Falls, Minn. home area.

Although snow fell with a vengeance in upstate New York this week, the reality of snowmobiling for the past few years has been sluggish sales, a laggard economy and marginal traffic into snowmobile showrooms. With boat and RV shows vying for consumer attention across North America, sled sales are taking another hit. People want to talk warm weather, figuring that winter is past and its time to get ready for the boating, fishing and camping seasons.

Cat has found that sales of its line of recreational toys has slowed as even its well-regarded ATV and utility vehicles are falling prey to what is seen by analysts as a saturated market. For both Cat and its neighbor in Roseau, Minn., the powersports business requires a cinching up of the belt until market conditions turnaround.

Expect any announcements about Yamaha’s new 2008 snowmobile products to be made in Wisconsin at a major dealer conference. You can bet that dealers will learn just how excited the California-based distributor of Yamaha motorsports products is about the exceptional record its snowmobile racers have racked up this winter. The snocross victory in Brainerd, Minn. was a big boost for the advancement of 4stroke performance. A win at the Soo and Corey Davidson’s gutsy showing at Mille Lacs Lake cross country event are encouraging signs that Yamaha sleds can compete—and win—against all comers! Yamaha marketers will be sure to explain to its dealers that when it comes to performance, Yamaha 4strokes can lead the way. And, of course, they will expect the dealers to order product.

If you look at the sales statistics for the most recent season or two, you’d think that the west leads the way in snowmobiling. That fact is misleading as the west has been the only place with consistent snows. The high percentage of sleds sold in that market reflects this anomaly. But unless it never snows again in the east or midwest, it is a mistake to look at those total sales in the west as a dominating pattern. Once the gods of snow settle back in and dump on the rest of the US, the percentage of sales for the west will drop like a stone.

Of course, no one knows when normal winters will return and with it, normal sales patterns. As for right now, marketing types are earning their money as they find that their once smart promotional programs are falling flat. Ask any veteran snowmo-guru with a decade or more of experience and that person will tell you that the only ingredient to creating marketing genius is snow! Anything else is a well-intentioned placebo.

We can’t help but notice that as sleds become more reliable, sled makers are making routine repairs a bigger and bigger pain in the posterior. We went to change a sparkplug on our REV the other day and discovered it was way more difficult than it should be. Thanks to the REV’s frame design, one plug lies nearly impossible to reach. You can extricate it in only one way and it requires patience that some of us don’t really have.

Yamaha’s Phazer twin and the new Cat motors are essentially hidden in the bowels of the new sled engineering designs that center mass under the rider. We’ve seen a Phazer guru decide that it was easier to remove the fuel tank to access the engine than remove side panels. You almost have to remove the Cat’s new 4stroke twin to get at its plugs. The manufacturers’ response to all of this is that today’s sleds are so reliable that you won’t be changing plugs anyway. You betcha!

Yes, we have come a long way in sled reliability, but when you’re out on the trail and a belt blows or a sparkplug fouls and the hood comes up, don’t you think that a $12,000 toy should be immune from all that? We aren’t that removed from our grandfather’s day after all, are we?

Manufacturers are so proud of themselves for what they’ve brought to market. And for the most part they are deserve credit. Still, we can think of some things that we should come to expect on sleds that carry price tags north of $10,000.

For example, with all of today’s mini-computer this and that on our cars, why don’t sleds incorporate them on the braking systems? How about an anti-lock braking system for the track? When you screw up and have to grab a handful of brake, what happens? The track immediately locks and starts to slide. It can fishtail, making your emergency maneuver trickier. If it had anti-lock braking, it would stop you more quickly and in a more controlled, more easily directed manner. Anti-lock braking? With sleds having 150-plus horsepower and top speeds easily in excess of 100 miles per hour, shouldn’t there be a bit more concern on the stop-ability of the modern sled?

How about mini-computers in suspension systems that are predictive and reactive to trail conditions? The vast majority of consumers don’t set their suspensions properly for the way they ride. The vast majority of dealers—making $100 over their cost on a sled—aren’t going to fine-tune a suspension for the dollar-conscious customer. This means that suspension set up falls back to the consumer. Or the manufacturer can use computerization to fine-tune a sled’s ride. With the advent of modern electrical systems on today’s sleds, there has to be a way to tune reactive suspension to a snowmobile.

In many ways, the modern snowmobile hasn’t changed all that much from the days of Eliason’s first motor toboggans. Evolution is slow, yes. But if snowmobile makers want to convince us consumers that their products are worth all the money they are asking, shouldn’t they be making more breakthroughs in things other than top speed and horsepower. And, if you follow computerization to its logical next step, it could very well be a way to make suspensions more effective and lighter in weight. We won’t hold our breath.