Kawasaki is spinning off its side-by-side business into its own company. More specifically, the Japanese giant, Kawasaki Heavy Industries, will no longer oversee Kawasaki Motors Corp which comprises its engine, motorcycle, and UTV companies.
They announced it briefly and succinctly in a press release that went out on November 3rd. Why are they doing this and what is there vision for the future of Kawasaki side-by-sides? Without saying much, they may have said a lot. Let’s take a look.
Here’s the entirety of the press release that Kawasaki sent out. We’ve bolded the key lines that we’re going to be talking about:
KAWASAKI MOTORCYCLE AND ENGINE BUSINESS STRUCTURE UPDATE
A message from the President and CEO of Kawasaki Motors Corp., U.S.A. (KMC):
During the COVID-19 pandemic, our business in both Powersports and Engine divisions has seen considerable success. New and reignited interest in our industry has been met by tremendous efforts from Kawasaki team members and our dealer network to meet the needs of our customers in a new environment where health and safety are the first priority.
Today, Kawasaki Heavy Industries, Ltd., KMC’s parent company and 100 percent shareholder, announced a restructuring plan to spin off the Motorcycle & Engine business and the Rolling Stock business into separate companies on October 1, 2021. […] These changes are part of achieving Kawasaki’s new business direction and will further enhance Kawasaki’s ability to continue to innovate with technology and safety for the powersports industry.
As for operations in the United States, KMC will see no changes. All KMC’s tasks and missions will remain the same and KHI’s restructuring plan will only further enhance KMC’s ability to serve KMC’s customers by furthering KMC’s ability to be quick and efficient when studying the industry and the future of powersports. The Kawasaki brand in North America is strong and getting stronger even under the COVID-19 situation and we at KMC will continue our great mission of delivering Kawasaki products and satisfaction to our customers.
More details are available on the KHI website:
According to this press release, it sounds like everything is hunky dory. They’ve seen massive growth in their outdoor motorsports division and want to capitalize on that by making it more efficient. That rings true to us. COVID has caused a lot of changes this past year with one major one being a huge amount of interest in the side-by-side industry. The Kawasaki Mule, Teryx, and KRX seem to be as popular as ever.
And so next year, Kawasaki Heavy Industries is releasing Kawasaki Motors Corp. from their purview in an effort to make them more reactive and appealing to this growing market.
But hold the phone. That’s not the whole story.
A longer version of the press release includes this section:
In the short term, we will continue working to improve our financial situation. However, when taking a broad view of the industry as a whole, it faces significant issues such as an aging customer base and compliance with environmental regulations. Kawasaki is strengthening intraindustry cooperation – such as through joint development of electric drive and advanced safety technologies as well as greater commonality of functional parts – in order to catalyze growth in the Power Sports Business and achieve market revitalization.
Significant issues with the industry as a whole? Market revitalization?
What are they talking about? One thing’s for sure: Kawasaki sounds like they have some serious concerns about the off-road industry as a whole.
On one side they’re saying, “Hey guys, everything’s going so great with our motorsports division that we’re giving them total independence!” On the other, it sounds like their saying, “We’re making changes in order to overcome issues and revitalize the market.”
Those two messages aren’t totally opposed to one another necessarily. They could be seeing the growth potential since launching the awesome KRX 1000 at the tail-end of 2019, but feel like they can’t meet that potential with their current structure.
Or, maybe the motorcycle side of their motorsports division isn’t doing as well as it used to while the UTV side is booming. Motorcycles are Kawasaki’s bread and butter. If their sales are declining during the dumpster fire of 2020, maybe they’re seeing more room to grow UTVs.
It’s some pretty mixed messaging for sure.
We’re not expecting to see anything too different from the Teryx brand in the near future. This change doesn’t take effect until October 2021 after all.
They’ve been teasing some new vehicles due out in January of 2021, but they appear to be minor tweaks on the KRX lineup including a 4-seater, hopefully, but it doesn’t appear to be as big as their last release.
Time will tell what Kawasaki’s intentions are. Maybe we’ll see industry shaking changes coming in the 2022 or 2023 lineups. Perhaps they’ll join the ultimate performance race currently dominated by the Can-Am Maverick X3 and Polaris RZR PRO XP.
Until we find out, just enjoy putting miles on your Teryx KRX 1000. We know we will.