Issue link: https://read.dmtmag.com/i/316641
www.PowersportsBusiness.com PWC Powersports Business • May 26, 2014 • 25 "This effort to find ways to bring features in at a lower price point and bring personal watercraft down to absolute lower price points is a huge, huge undertaking, however it's one we're very serious about and very committed to," he said. "It will be a while before you see products coming to market that are a result of that effort, but it's a very high priority for us." Speaks said such a Yamaha-branded model could benefit from an engine platform used in a different product category as a way to share tooling costs and keep the price down. On the same note, Kawasaki PWC prod- uct manager Bret Snider went further by congratulating Sea-Doo for its innovation with the Spark and suggesting his company's attention is aimed squarely at the mid- and entry-level categories. "We need to chase the volume and we need to come to market with products that repre- sent the voice of the customer," Snider said. "There's some migration from the flagship to the mid level, so we need to place some atten- tion there. Also, in the entry level, that's the volume, so if you're chasing the volume, you need to take a look at that entry level and deter- mine what opportunities there are." He added that the company's STX-15F has higher performance and a similarly higher price than competing entry-level units. "You could argue our performance is too high for the entry-level, so perhaps there's an opportunity to create a variation of that model that's a lower price point with a little bit lower performance, or create a new platform alto- gether," Snider said. Snider said Kawasaki's approach would maintain the company's established perfor- mance attributes with "trickle-down" perfor- mance from elsewhere in its product lineup. "I think even at a true entry-level product, I think we would put more focus on hull perfor- mance and probably pushing that power plant performance a little bit more," he said. The company has a specific engine in mind that is in active development for a different application within the Kawasaki stable. The market should expect "some reaction out of us in the next four model years," he said. HORSEPOWER WARS The next frontier of PWC research and devel- opment will not be confined to building new entry-level models. If recent advancements are any indication, all categories should expect a mix of new ride-enhancing technologies, as well as existing features to spread downward from the highest-performance models through the rest of the company lineups. Sea-Doo relishes the exclusivity of its Intel- ligent Brake & Reverse (iBR) system, which has recently spread to more products through- out the lineup, including the value-oriented GTI models. The company also received a wel- come boost by nabbing the "Best Watercraft of the Year" award from Jet Ski Magazine. Marketing director Julie Tourville said iBR is a crucial Sea-Doo feature in a market where nearly 50 percent of the market is PWC first- timers. Tourville added that the company remains focused on developing technological advancements that attract a younger audience. Qualities like ease of towing, lower cost, better fuel efficiency and environmentally sustain- able materials present opportunities for reach- ing younger customers. "Consumers have less and less time, are super busy, are looking for ways to escape, for ways to relax, for ways to entertain; they want instant gratification, and I think our cat- egory is one that really indisputably provides a lot of these elements," she said. "We've got great products that provide so much pleasure, time with the family, memories of great times, sunny days, and I think that in days when we are all extremely busy, I think [ours] is a great industry to be in and to provide that opportu- nity to consumers." Kawasaki recently launched its new super- charged and intercooled, 310-horsepower Ultra 310R, which it claims is the most power- ful stock PWC ever built. Aggressive, youthful features include 12-position motocross-style handlebars, race-inspired colors and graphics and new Sportseat with a high-grip seat cover that's also imported from the motocross dirt bike market. Snider said the company's range of flagship models is exceeding expectations, including the luxuriant 300LX that includes the indus- try's first fully integrated "JetSound" stereo system that includes a pair of 30-watt speakers. "That's been received really well," he said. "The media came in, to be honest, a little unsure what to think of it, but after experienc- ing the product they said … this adds so much to the experience of riding a PWC beyond what we ever thought, so that's been very good." As for whether higher horsepower is in store, Snider said there's always room to push the power envelope forward, but that would further raise prices. He suggested hull technol- ogy might be a more pressing area of research and development, along with reducing weight and improving the efficiency of its vehicles. "We've got class-leading engine perfor- mance, class-leading hull performance, but that comes with a price tag, so it's not a technologi- cal challenge, it's more of what the consumers will bear," Snider said. "I think we're pushing that limit right now, and testing it especially with the LX." Yamaha has increased its PWC R&D invest- ment in recent years in expectation of a recov- ering market, and Speaks said the company's range-topping FX Cruiser SVHO — with a supercharged 1,812cc engine and a $15,399 starting price — has seen "red hot" sales and exceeded the company's expectations. As for adding more power in the near term, Speaks said "we've probably satisfied the vast majority of people in terms of the performance they're looking for." Instead, shedding weight and increasing fuel efficiency is the focus in coming years, as evidenced by Yamaha's newly introduced NanoXcel material that enabled the company to shave 60-70 pounds out of the hull of its VX series, an advancement that aids handling as well as fuel economy. Speaks said some of Yamaha's less glamor- ous innovations in the category have been its brand-new PWC leasing, the Certified Pre-Owned program launched last spring, low-interest programs that have allowed cus- tomers to buy a WaveRunner for less than $100 a month and a guaranteed buy-back program that allows customers to return their unit to the dealer after 36 months to walk away or trade- up to a new model. FINDING FACE TIME Innovation is also coming in the form of cre- ative marketing. Yamaha recently became the official boat and PWC sponsor of the Monster Energy Supercross series, leveraging the com- pany's reputation and brand recognition in front of a younger audience. "Communicating with consumers face to face is a type of marketing that you can't top," Speaks said. "Finding new venues where we can meet with people that have an interest in our product is a top priority for us, particularly if we can find ways to do that and expose the product to people that may not even be aware that we were in the [PWC] business." With younger consumers used to replac- ing items like smartphones every two years or sooner, he added such a mentality could eventually be good for the PWC business if it "enables those buyers to experience our per- sonal watercraft in the same fashion that they experience their smartphones or laptops … those folks are growing up, getting older and heading our way, and we'd like to move toward them and try to meet that wave a little quicker." Matching its youthful Spark with an equally spry marketing message, Sea-Doo partnered with music producer Joel Thomas Zimmer- man, known to his electronic music audi- ence as deadmau5 [dead mouse], to launch its #SparkSomeFun Test Ride Tour that will visit 33 North American cities. The tour was kicked off with a live deadmau5 concert at the Fon- tainebleau Miami Beach on March 23. The company invited 500 fans to attend the free concert, and encouraged participants to post a photo to Facebook or Twitter with the #SparkSomeFun hashtag. "He's an extremely well known music pro- ducer, he's got an extremely big following, but we also knew that he was a Sea-Doo fan, which was a key element that sparked the idea of col- laborating with him," Tourville said. LOOKING FORWARD Although its market share has declined in recent years, Kawasaki's Snider strongly reaf- firms the company's ongoing commitment to the PWC market. He added that its dwindling share is cause for concern, but that the com- pany's current challenge has less to do with its products, and more about exposing the prod- uct to consumers at trade shows, through demo rides and at other public venues. "We invented this segment — we're in a refocusing stage right now," Snider said. "From a product point of view, we have a few holes in our lineup, but the product that's available today I would put against any other product out there. We're full steam ahead in staying with this segment." Looking ahead, he added that the com- pany is always examining other possible con- figurations and innovations that could be brought to market. One possibility, which he noted was an observation not any hint of future product, is the ongoing popularity of stand-up PWC, which are still a presence at some watercraft races. "I'm not suggesting that we're doing any- thing about it other than looking at it from way outside and wondering, but I've attended some watercraft races this year and was quite surprised to see the number of stand-ups," he said. "A lot of them are old Chris Fischetti long-haired hippies that never got out of it since the '70s, but what's surprising to me is the number of young kids that were involved. In talking to them, [asking] 'Why are you doing this?' a lot of them were motocross kids that got tired of hitting the ground and wanted some form of competition and more rider-active recreation." Yamaha's Speaks sees the potential for sig- nificant segment growth in the coming years, noting that approximately 21 million Ameri- cans rode a personal watercraft last year. He added that there are approximately 1.6 million registered PWC in the country, yet the industry sold less than 50,000 new units last year, sug- gesting there is ample room for growth. "Prior to the recession, the market was very stable at about 80,000 units per year and we're currently operating at … between 45,000 and 50,000 units, so we're way down from pre-recession levels," he said. "I expect as the economy improves and as consumer confidence improves that we'll see personal watercraft volume move back up towards pre- recession levels. Whether it will get back up to that exact level, I don't know, but we have a long ways to go." Sea-Doo's Tourville declined to offer any predictions for 2014 sales, but waxed optimis- tic about the impact the Spark will have on the company's overall PWC sales. "The initial read is extremely positive, dealer feedback is extremely positive, con- sumer feedback is positive as well," she said. "People like the fact that it's extremely acces- sible, so that's of course the number one ele- ment that stokes attention at boat shows. They also like the fact that it's not only accessible as far as entry price, it's also accessible in terms of fuel efficiency, [and the] ability to tow it behind smaller cars, which opens it up to a broader audience. Plus, although it's more accessible, it's also cool looking, customizable, colorful and extremely playful in the water." PSB PWC MARKET CONTINUED FROM PAGE 22 Makes 2010 2011 2011 2012 2012 2013 2013 Sales Sales Growth % Sales Growth % Sales Growth % SEA-DOO 39.60% 45.94% 16.01% 48.43% 5.41% 49.98% 3.20% YAMAHA 34.52% 39.64% 14.83% 40.53% 2.24% 40.42% -0.26% KAWASAKI 13.74% 13.10% -4.69% 10.19% -22.20% 9.18% -9.94% HONDA 12.12% 1.31% -89.21% 0.84% -35.68% 0.39% -54.04% HYDROSPACE 0.02% 0.01% -30.85% 0.00% -100.00% 0.00% FUZION 0.00% 0.00% 0.01% 0.01% -25.85% QUADSKI 0.00% 0.00% 0.00% 0.03% Source: Statistical Surveys Inc. In a good sign for the category, Yamaha has seen mid- level PWC sales increasing, including its VXS model, which starts at $11,399. PWC SALES BY BRAND 24 • May 26, 2014 • Powersports Business PWC www.PowersportsBusiness.com P22x25-PSB7-PWC.indd 25 5/14/14 2:14 PM