Rising disposable income in much of the world has created a favourable environment for the consumer cyclical sector. The trend has paved the way for long-term growth for the recreational vehicles industry in particular. The sunny outlook for the industry suggests this may be an opportune time for buy-and-hold investors to venture off the beaten track and look at some attractive opportunities in the powersport industry.
Companies operating in the arena of powersport and other recreational vehicles manufacture snowmobiles, all-terrain vehicles (ATVs), high-end motorcycles, and personal watercraft. These products are becoming increasingly popular for their aspirational value and as symbols of adventure coveted by thrill seekers.
U.S. ATV manufacturing has grown by 3.3% to rack up US$6 billion in revenue in 2018, according to an IBS World Report. The study forecasts ATV industry revenue to grow at a steady clip over the next five years, which it attributes to improving economic conditions and discretionary spending resulting from rising disposable income levels. In a similar trend, global snowmobiles market clocked 5.2% growth to swing back to growth trajectory, according to the International Snowmobile Manufacturers Association.
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