Welcome to my 2nd Annual State of the Off Road Industry Report. I am Joel from Wheeled Lyfe Off-Road and I love the off road industry. I also just happen to love business and finance reports. This report is a compilation of data from various companies who report and release sales, revenue, and sales expectations.
Last year, was my first ever State of the Off Road Industry report and I made some bold predictions based on the reports I found and research from industry leaders in business and finance. You can read my full report HERE in the 2023 State of the Off Road Industry Report.
How did I do?
2024 Financial Report
An important part of the off road industry discussion is based on interest rates because much of the money flow is based on debt and loans, we can draw a direct comparison to how well the aftermarket industry will perform based on those interest rates. In 2023, we saw a pause to much of the growth and spending due to the fear based reporting that the media pushed on our culture. Most companies stopped hiring and early in the year we saw layoffs. People were saying that home prices and the stock market were going to crash, along with the economy. In my research, I just did not see that to be true and in fact we did not see any of that at all. Most Americans did not lose their jobs, the housing market did not crash, and the stock market didn’t tumble either. There is a lot of research in those huge topics, but this is not the article for such a lengthy topic. However, the large tech company layoffs in late 2022 and early 2023 created fear and panic and people stopped spending, in a general sense. However, they did not stop spending when it came to dining out and restaurants. Large purchases however, like suspension lifts, wheel and tire packages, and bumper upgrades were mostly sidelined. Additionally, we saw most Americans pause on their vehicle purchases as well.
The Feds ref. 1 raised interest rates four times in 2023 at 25 bps (Basis Points) each time. However, relief came when we started to see inflation numbers subsiding and the Fed stopped raising rates the second half of the year. ref. 2
Looking forward, most industry experts are saying that the rates will hold steady for the first half of the year and then starting in July or August we could start to see the Fed reduce rates two to four times in 2024. The 10 year treasury yield has already started to lower, and it will be hard for the Fed to justify the higher interest rates.
There is some speculation on how aggressive the interest rates will fall, but I believe we could see mortgage rates in the high 5% by the end of 2024. And land in the low 5% in 2025. At the time of this writing, my local credit union has a 30-yr fixed mortgage rate of 6.5% without points and I found other rates posted online at about 6.94%. With new vehicle purchase rate at 6.74% for loans up to 78 months.
That means we could see new vehicle purchase rates in the 5% range by year-end 2024.
Will you be purchasing a new or newer vehicle in 2024? How about a side-by-side?
The Big Two
Ford and Stellantis had a wild year, as you can expect with such a hostile union strike. However, the Ford Bronco still out performed 2022 sales with a 32% YoY increase. This was potentially due to the fact that Ford production was finally catching up on back orders from pandemic era pre-orders. Ref. 3
The Ford Bronco is a cool looking rig, and I would love to get one eventually. We actually had one ordered and delivered to the dealership last year, however, Mrs. Wheeled was going through a job change and we weren’t sure it was going to fit our budget so we declined to pick it up. However, with the IFS, and hefty price tag, I don’t think the Bronco makes for a rock crawling rig. Perfect around town show-piece though!
The Jeep Wrangler didn’t fair as well with a decrease of 12% YoY sales. We estimated the last three months sales and the numbers still came up low. We will have to see how the numbers finalize, but they don’t look great. Overall, the Jeep Wrangler is the perfect rock crawling rig, the only SUV that I can think of with a straight front axle. But the segment of the market that is looking for advanced wheeling is probably so minimal that is why Ford went with IFS. It should be interesting how 2024 year model sales fare for the Jeep Wrangler. In my opinion, the new front grille style may hamper some new sales, and the infotainment middle screen needs to be larger, not longer. The screen size was a step in the right direction and I will admit it has a cool look to it. Adding creature comforts to an adventure rig has been great for the Wrangler. Although, It would be great to see a new basic 4 dr Jeep off the lot for $30,000. A Jeep with no electric locks or windows, no digital screen. Just a 4 dr hardtop 4×4. A blank canvas for someone to customize. A guy could only dream! Ref. 4
Tacoma // 4Runner
Tacoma sales were flat YoY, and 4Runner sales took a big dip. I am unsure the cause of that, however, Americans are choosing to fix the vehicles they currently own as opposed to buying new. It has played a huge part in that statistic. Ref. 5 / 6
In all, there were roughly 586,000 Broncos, Wranglers, Tacomas, and 4Runners sold in 2023. (Tabulated so far. Final totals still to come.) By comparison there were 680,000 Ford F-Series pickups sold in 2023. Additionally, the Tundras, Silverados, Sierras, and Rams were not accounted for in these calculations but if you add them in, there were roughly 2 million off road capable vehicles sold in 2023. Ref. 7
What to Expect – Vehicle Summary
I would still expect around 30% of those new SUV and Trucks to be accessorized in 2024, and like I said above, vehicle purchases and accessorization to really pick up in the second half of 2024 just in time for the show season. Basic accessorization with wheels and tires are often the first things to be customized.
SXS Industry Results for 2023
BRP Inc. and Polaris are two of the major powersports companies. BRP owns Can-Am amongst others and Polaris makes the RZR. As of the latest releases Q3 the BRP company as a whole was down 8.9% YoY. Their press release cited the softer industry particularly internationally, which I believe outside the US has been hit harder with inflation and economic times. And Polaris was down 4% YoY. However, their off road sales increased: “Polaris North America ORV unit retail sales were up five percent.” Their press release cited the higher finance interest in one of the major economic impacts to the softening sales. Ref. 8 / 9
With lower interest rates on the way, they may have a great second half of 2024.
I was also able to review the Q3 release from Yamaha Motorsports and their global net sales increased 9.4%. Although the side-by-side market was softer than their motorcycle sales. They cited tougher pricing competition on their off road vehicles. Ref. 10
Another Point to Consider
I talked a little about this in last year’s report. But it does still pertain to this year. I still believe that the industry will grow slightly in 2024, however, I think the days of 20-30% industry growth are gone. People are back to work, back to routine, and have less extra cash (Thank you Inflation) and much less time to spend offroading. We’re seeing the normalization of the off road industry back to pre-cvd levels. (I don’t even want to say the word it’s so taboo!)
Summary
In summary, I believe we will see a small to modest increase in overall off road sales in 2024 with the majority of sales coming in the second half of the year. The increase will most-likely be around 3-4% of vehicles, SSV, upgrades, and PG&A (Parts, Garments, & Accessories).
How will you prepare for these sales? Comment below or on our social media and let us know if you found this report helpful.
If you use this information and data in this report, please credit us. Link to this report. We appreciate it!
References
(The Federal Open Market Committee (FOMC) consists of twelve members–the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis)
https://www.federalreserve.gov/monetarypolicy/fomc.htm
https://www.forbes.com/advisor/investing/fed-funds-rate-history/
https://www.goodcarbadcar.net/ford-bronco-sales-figures-usa-canada/
https://www.goodcarbadcar.net/jeep-wrangler-sales-figures/
https://www.goodcarbadcar.net/toyota-tacoma-sales-figures/
https://www.goodcarbadcar.net/toyota-4runner-sales-figures/
https://www.goodcarbadcar.net/ford-f-series-sales-figures/
https://news.brp.com/static-files/24d66847-9cda-4862-aa16-55b9462a8c77
https://global.yamaha-motor.com/ir/library/report/pdf/2023/2023report-q3-e.pdf
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