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Hello! I am Joel from Wheeled Lyfe Off-Road and this is my first ever article detailing the state of the off road industry! Offroading in 2023 is here! Buckle up for a wild ride!! Let’s WRANGLE the Bucking Bronco Off Road Industry!
Well what’s happening with our economy??! Is offroading dead? Is it continuing to burst out like it did in 2020? Let’s go!
From a then “outsiders” perspective, the offroading industry seemed to undergo a great resurgence of vigor when the shut down occurred. People found themselves with a little extra cash, a lot of extra time, and when their lives stopped – they began to remember what passions they had before their lives became so full of work and all the pressures of life. And what better place than the adventure of vast forests, deserts, and the American highways? Except every single fast food restaurant was closed!
People bought RVs and trailers in droves. Campgrounds were packed! And Jeeps, Trucks, SXSs, & Dirt Bikes flew off lots!
Well I don’t need to recount all this to you, you lived it too. But all that to say, it was a RUSH to camping, overlanding, Jeeping, and experiencing life deeper than we had in a long time.
So what’s happening in 2023??
I plan to outline what the data is showing for the market as a whole, Jeeping and Truck accessories, and some light data on SXSs that I have collected.
what is the state of offroading in 2023?
Let’s detail what I have found in past data for Jeep Wranglers and Gladiators, Broncos, and more!
In 2020, There were 201k Wranglers sold in the United States. In 2021, there were 204k Wranglers sold. We don’t have completed numbers for 2022 yet, however, the total Jeep Wrangler sales are looking to land a little short at 190-200k. That’s not including Gladiators of course. Gladiators sold were 2019 40k, 2020 77k, 2021 89k and so far in 2022 (Jan to Nov) 60k. (Ref 1 & 2) See the chart below for figure visualization.
Big Ford Broncos sold 35k in 2021 and 106k in 2022. (plus December not yet reported.) (Ref 3)
It looks like there was little to no effect on the Wrangler market due to the sale of 106k Broncos. Which is a very interesting stat!
With much higher auto loan rates, this is most likely the main reason for slightly less vehicles being sold during the second half of 2022. Also, a recent study showed that a vast amount of auto loans are now over $1k per month! That and vehicles being priced much higher than 4 years ago. Dealers commonly selling new and used vehicles with large “market adjustment” price tags. (Ref 6)
Wrangler and Gladiator sales are expected to increase overall by 30% by 2030. That is roughly a 4% CAGR (Compound Annual Growth Rate) increase per year.
With auto prices overpriced the last few years there may be a pent up demand for newer vehicles.
In my reasoning, If a 2010 Jeep Wrangler owner wanted to upgrade to a 2021 or 2022, they potentially sat on the sidelines waiting for prices to normalize. Thus, they may be in the market soon for a new 2023 Jeep, Bronco, Tacoma, Gladiator, or 4Runner!
Are you waiting for the market to normalize? Let us know below in the comments!
In the most recent light truck accessories report by SEMA, detailed that 53%-62% of truck owners perform at least light off roading and many using them for a wide variety of outdoor sports. With most of the purchased accessories having to do with tires, wheels, lights and lifts. Most of the upgrades were cosmetic in nature to improve the look. (Ref 7)
I believe this stat will hold true of Wrangler, Gladiator, and Bronco owners in 2023. Roughly 50% to 60% of owners will add modifications to their rigs.
With 1/3 of the market under 30, the industry looks to be strong for many years to come.
The accessory market is looking at a modest 4% increase in 2023.
I believe this is a possibly a combination of realities. Since 2020, most owners went out and upgraded, there are far fewer people needing to upgrade in 2023. Also, with fear being peddled like sugar, people will be holding onto the cash they have saved. Lastly, rising costs. Some people just haven’t received the income adjustments and raises that boosted them to inflation levels to keep up with costs.
Although, with 50%-60% of new Tacoma/4Runner, Jeep Wrangler/Gladiator, Ford Bronco owners purchasing upgrades that still looks to be a modest 385k+ potential aftermarket builds per year. And growing at at least 4% each year.
However, this may be a valid point for even greater growth potential in the future beyond 2023 greater than 4%. In 2024 and beyond, once auto loan rates start coming down and consumer confidence will increase. We could see people selling their older model vehicles and upgrading to newer vehicles, and then customizing those newer vehicles.
SxS’s & other off road sports
An interesting detail that I came across while compiling all this data. The BRP (DOOO) company that sells Can-Am off road vehicles has increased its growth forecast up 23% for 2023. This is an interesting stat that we will continue to keep our eye on. BRP produces Can-Ams, SeaDoos, and Snowmobiles. (Ref 8)
Polaris (PII) sold its 4WP business in 2022 and looks to get on a fresh start with a roughly 6% gain in 2023. (Ref 9)
Wheel Pros now owns 4WP, along with American Racing, KMC, Fuel, Smittybilt, Pro Comp, Poison Spyder.
RVs & Travel Trailers
A recent Oct 2022 report detailed that travel trailer and RV sales will continue to increase at over 7% CAGR 2022-2026. (Ref 10)
Summary
So there you have it! OFFROADING isn’t dead at all! You’re out there enjoy it like you always have and will continue to!
Although the anomaly of 2020 -2022 will be past us, slow and moderate growth of the industry is exciting and comforting. No extreme dips — plunging into great depths and no sky rocket spaceships.
In summary, there will be a very modest growth rates will be 4-6% across the industry, forecasting for the next few years barring any unforeseen economic changes.
Overall population growth in the US is 0.69% year over year. In 1950 it was at 2%. So for the industry to beat population growth is positive news!
That is the facts for the state of offroading in 2023!
Tell us how this relates to you! Comment if you will be buying a new off road vehicle in 2023, if you will be adding upgrades? Or if you would be holding steady and waiting for 2023 to pass?
Have thoughts or comments? Message us or email us! Or comment below!
State of the Economy 2023
I have detailed some of the industry data, but what about the economy as a whole? My research is indicating that we will be going through a dip (possible mild recession) in at least the first two quarters of 2023. The gross domestic product will shrink slightly those first two quarters. Inflation is still here to stay for 2023 and we should see monthly inflation rates start to come down to 6% then 5% then 4% towards the end of the year! Great news! With that being said, the growth of the economy will stall in 2023. Home prices/values will be flat in 2023. And mortgage rates will come down slightly. Rents will continue to increase by roughly 7% to keep on the inflation trend.
People on average have more cash on hand or cash available to them than pre-pandemic. There is 20 trillion in bank accounts and money Market accounts. According to the Federal Reserve. (Ref 11)
The possibility of a slight recession should not impact tooo many, if you are keeping reserves. If an employer has to let employees go, there are a record amount of job openings available in a wide variety of industries. Some businesses may have to lay off workers, but on the other hand some businesses are still looking for great employees! Keep your skills sharp and feel free to gain experience and training to further your career! Keep a reserve of 3-6 months of expenses in case of a transition period.
In 2024, we will see home prices/values increase 5%. The Fed is hoping for inflation to land back into the 2% range in 2024. And we should see mortgage interest rates fall back down to the 4% range. If you need or want to buy a home in 2023, you can always buy now and refi later.
A recent study showed that 2/3 of millennials plan to purchase a home in the next 3-5 years.
There will be a continued housing shortage and prices will not come down, except for small pockets of individualized areas. Buy now, refi later. Buy as soon as you are able to collect the cash. They aren’t building homes fast enough to sustain our population growth and the delay is already 7 years too late! Homes will continue to be an increasing value, it’s not too late to jump in. (Ref 12 & 13)
Okay that’s the state of the economy in 2023!
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References:
Ref 1: Jeep Wrangler Sales According to Good Car Bad Car https://www.goodcarbadcar.net/jeep-wrangler-sales-figures/
Ref 2: Jeep Gladiator Sales According to Car Sales Base Bart Demandt https://carsalesbase.com/us-jeep-gladiator/
Ref 3: Ford Bronco Sales According to Car Sales Base Bart Demandt https://carsalesbase.com/us-ford-bronco/
Ref 4: Toyota Tacoma Sales According to Good Car Bad Car https://www.goodcarbadcar.net/toyota-tacoma-sales-figures/
Ref 5: Toyota 4Runner Sales According to Good Car Bad Car https://www.goodcarbadcar.net/toyota-4runner-sales-figures/
Ref 6: A Percentage of residents by state paying $1,000 a month or more for their auto payment according to ‘A Wealth of Common Sense. https://awealthofcommonsense.com/2022/11/4personalfinancecharts/
Ref 7: According to SEMA Market Research data in the recent ‘2022 SEMA Pickup Accessorization Report’ Download it at: https://sites.sema.org/market-research/
Ref 8: According to BRP Inc. https://news.brp.com/news-releases/news-release-details/brp-reports-fiscal-year-2023-third-quarter-results
Ref 9: According to PowerSports Business https://powersportsbusiness.com/top-stories/2022/06/16/polaris-selling-transamerican-auto-parts-to-clearlake-capital-backed-wheel-pros/
Ref 10: According to market research firm Technavio https://www.technavio.com/report/recreational-vehicle-rv-market-industry-analysis
Ref 11: The Fed m2 data https://www.federalreserve.gov/releases/h6/current/default.htm
Ref 12: Smart Investing with Brent & Chase Wilsey Radio Broadcast / Podcast Nov 12, 2022 Radio Show
Ref 13: It’s a Good Life Brian Buffini S2E99 Dec 12, 2022 S2E100 Dec 14, 2022
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