cost of production

[mudNmallards]

Impressive BW6, its pretty clear to me you are a part of the “been there-done that” crowd and many of your points line up very well with the discussion points our little group has raised. If you wouldn’t mind, at a point in the future I would like to take this offline with you for a more detailed discussion regarding your experience in this area.

One of the key points discussed on our end was the “new” design issue. (this goes inline with Beeman’s comments above) In a more simple term, not so much the “design” being new ( I see little wrong with the current design as far as compactness, appearance and basic functionality in the AATV world.) but the functionality and usage bringing a “value add” to the customer. If one looks at many of the threads here and goes to the OEM websites to see the pictures of the units and whatever options are available ( and get quotes like I am doing)- its obvious that anyone can “upgrade” them with a bigger engine, transmission, tires or whatever to make it a little stronger, faster, swim and whatnot. To me that’s not as much a design improvement as it is an enhancement of a current design or function.

Here is where I’m different than the generic market so I’m playing customer. The only difference is that I have had the opportunity to use and manage these vehicles in environments ranging from the deserts of Saudi and the UAE to the frozen wastelands in Russia and China and some of the stans where their unique characteristics in those environments make them the best choice rather that the average gator, mule or quad which are over here by the thousands. So, I have made the “informed” decision to purchase an AATV and nothing else is being considered. The other point is that I have been trail riding all my life and already own jeeps, quads and motorcycles.

If the above were not the case and I was John customer off the block, it would be difficult to almost impossible to even get me to consider buying one. Heres why. The first thing that hit me was the outrageous price tag of the new baseline models. You can buy a brand new car for less than many of these units. (I’ll use one of the Argo quotes I got- with tracks, winch, guard, ROPS and it was the 750 HDI) That unit would cost me more than I paid for 2 Yamaha trail bikes, 1 Honda 4 wheeler and a used CJ-7 combined. Another note was that on top of all that I will have to pay almost $700 shipping to a dock facility and take it home from there and do all the initial servicing, charge the battery etc.
When mommy and daddy ( who are on a budget) are considering a family purchase or something for little Jimmy to play with- that’s a significant impact on a family budget when other options are substantially cheaper. In any market analysis, the specialty or niche customer is not a part of the consideration because he/she already has the “bug” and they are going to have their dirt race car, jacked up truck/jeep or buy a project whatever to build up in their shop or (insert personal preference here) even if they sacrifice somewhere else to make it happen. Statistically speaking, that group will always be the minority in any type of market.

Then there is availability. Look in the yellow pages. Count the number of bike and 4 wheeler dealerships in yourtown USA, Ca or wherever. Next look at the number of AATV sellers. A big part of the purchase and decision process is the family outing where they go to the showroom, sit on it, look at it, check it for fit, features and basically do the “hands on” method of decision making. Its hard to get that level of excitement and information to make a purchase based on a sales brochure and a youtube video or anything else that cannot be measured with the full range of human senses.

Then there is service after the sale. The average yuppie is technically challenged and it would probably be dangerous to put a wrench in his hand. Also, its easier and faster for daddy to trailer it and take it to the shop and pay the bill rather than order everything, wait for it to come in and then fix it. (all the while junior is in the background crying because he wants to play with his toy) Again, this doesn’t apply to that niche customer who does this and looks forward to doing it but they are always the minority.
Then there is the ultimate marketing tool. The peer market. What is everyone else in the community using? If everyone else is riding 4 wheelers and/or bikes- that’s going to probably dictate the first or second choice in the decision making process as to what to focus on. Then there is the added benefit of “word of mouth” where little Jimmy’s mommy and daddy can talk to little John’s mommy and daddy to see how their whatever works and maybe take it for a test drive.

That brings up the oldest problem in the book. How do you get that level of market penetration when the majority of your potential customers have so many other options that will suit their needs just fine and almost all of them have substantially cheaper price tags and right down the street. Unless there is an investor with several million dollars for market advertising or the unit somehow becomes the focus of a major motion picture or TV show that’s difficult to do especially when all there is to really sell is “fun” and the market is already saturated with “fun” products at about a 3rd of the cost. This goes back to Beeman’s most perfect statement “jack of all trades but master of none”. (its like he literally read my mind because I used that exact phrase the other night discussing this little project we are considering)

Yeah they float and swim but if the desired usage is fishing, a good jon boat and motor does all those things better, faster and is more fit for purpose. It’s the same with 4 wheeling. Many like the “speed” and as far as overall riding trails go- any quad will go about 75% of the places the AATV will which is where the “average person” ( who is the major purchaser in demographics) is going to go. I would personally try to go “where no vehicle has gone before” and I go looking for places to get stuck in and/or put the vehicle through a torture test but then again I’m in that small minority niche market. The final nail in the coffin is that when you put figures to paper and add them up- you can buy that (new mind you) jon boat/motor/trailer and 4 wheeler and dirt bike for less than the cost of some of these new machines. ( I and several others did that exact thing using 2 of my quotes averaged as a baseline because we all live all over the US and Canada and we wanted several different views based on somewhat of a national average rather than just a single market type)

Anyone who has any interest or desire to start any business has to consider this first and foremost because without a strong market presence and selling point(s) that fit the needs or wants of the customer base you simply will not make the money to survive. The first question in any business endeavor is “do I proceed or not” and that’s always based in the market analysis.

What our consensus was to focus on the utility aspect of these vehicles. Basically a design rooted in the recreational market but with specific design capabilities that could compete with lawn mowers, the small homeowner tractors and similar vehicles. Our logic was pretty simple. I’ll throw it out there for any comments anyone wants to share.
We didn’t think it realistic to even try to build a model with the baseline characteristics that make AATV’s what they are to compete pricewise with the quad market.
If we focused on the “better, stronger, faster” aspect, that is nothing more than whats already out there so there is no real improvement because these vehicles as a whole already meet that criteria. Additionally, if this board is any indication, that’s already being done on a grand scale by both individual owners and manufacturers with a high level of success. Not to mention that since there is really no “new technology” to make something radically different and the majority of the components would be “off the shelf” already- it wouldn’t take but 1 generation before every other manufacturer would incorporate ( or have the ability to) anything we would do so you are back to square one where all units are basically the same again. (granted it’s a given that that is going to happen anyway no matter what product is put on any given market. All competitors buy their competitions products, test them and tear them down to see what new ideas they can use and back engineer them.)

When everything was tabled what remained was the multi-purpose market where the selling points could focus on versatility and multiple uses to replace several types of equipment with the added benefit of recreational use. I see some manufacturers already doing this and I think from a business perspective that’s the way to go. I don’t see any reason why an AATV could not be built where it would accept mower decks/yard vacs and basically any 3 point hitch accessory. An approach like this with multiple light equipment usages combined with recreational capability would put the product in several markets thus increasing exposure and give potential customers more to think about regarding the justification for such a purchase. For those who are into Jeep history, Jeep tried this with limited success right after WWII and there are videos of Jeeps pulling plows and other things out there. They didn’t push it very hard and the Jeep had its military reputation so it was hard for the public to think of it as a potential replacement for a tractor in many applications. I’m sure there will be some of the same cautious apprehension with an AATV because its radically different than the traditional light utility vehicles but this is a different society more open to change than it was 60 years ago. Plus an 8 wheel AATV might appeal to the more “cool conscious” suburbanite than having than having a light tractor for their garden.

Our final decision was based on 2 things really. It’s a drill down for the bigger models for industrial/military applications we may be contracted to design should the project go forth. The other is simply making a marketable product that produces a profit. Its not about (at least for us) building the next worlds greatest AATV because they are already out there. Every manufacturer I’ve looked at makes a pretty stout reliable machine that has been field proven to perform and perform very well. One model may have more bells or a special thing it does better than another but that’s nothing more than variations of a theme.

From purely a business perspective I believe it would be financial suicide to bring any product to a market where established name brands that are proven heavy hitters exist unless you had either a “new and improved” product or some form of lateral expansion where it would be more versatile and attract non traditional buyers in other markets. I know there is really no “secret” new technology out there and there is nothing we could design that would be significantly different than the design teams at the established firms have either already thought about or may already be in the planning stages of. Every manufacturer currently out there could decide today to put a bigger power plant, larger transmission, thicker body, propeller and even wings on it to make it fly and have a prototype ready in a few months. The question is would the market accept the cost and buy it. In my mind, that only leaves some form of lateral expansion based in expansion of versatility and usage- even if it reduces some of the recreational aspect functionality.

I know to the more traditional users that probably sounds like blasphemy and I would have to concede that to a point it is. I also know that for any business (especially a new one) to survive it must have a positive monthly cash flow that covers all overhead and expenses and makes a growth focused profit annually to expand and adapt to the respective market and survive economic downturns or its life expectancy will be measured in weeks or months. In order to accomplish that it must generate sales in enough volume and profit margin per unit and on an upward curve. The company has to grow. In order to accomplish that it must have constant market penetration and appeal to people in a way that makes them want to buy the product over everything else out there. In order to accomplish that a company simply has to meet the needs of a potential buyer and be at a price they can justify in their budget. It all goes back to marketing and infrastructure. Most buyers (excluding the niche buyers like myself and probably most of the “informed” AATV world) research into buying begins and ends with whatever is available locally. Most agricultural outlets have some model of 4 wheeler there. I see no reason why there couldn’t be an 8 wheeler with a plow or mower deck attached sitting right beside it.

[azz7772]

I'd be willing to start on design. I don't think money has to be an issue at the beginning.

I think what has to happen is find people who are willing to invest (but not necessarily investing right away), and start with that small core group of people in an advisory discussion group (closed to public) with the intent of building a new machine. Once the concepts and market direction are agreed upon, a design concept can follow. Once the design is approved, money to build the prototype would then need to follow. Having said that... who's in?

I am interested what do you think is a fair amount per person to begin the process I guess it would depend on the number of interested parties and then a discussion on what type of machine to design and prototype and the cost of the first build.also where to build it and what resources we can pool together.

[Beeman]

I'd be willing to start on design. I don't think money has to be an issue at the beginning.

I think what has to happen is find people who are willing to invest (but not necessarily investing right away), and start with that small core group of people in an advisory discussion group (closed to public) with the intent of building a new machine. Once the concepts and market direction are agreed upon, a design concept can follow. Once the design is approved, money to build the prototype would then need to follow. Having said that... who's in?

[Bw6]

Where To Ride: If you own an AATV your world is full of restrictions, forget about most State Parks, Public Roads etc. your world becomes Private Property and Off Road Parks. There is no lobby for AATV's. On the other hand if you own an ATV your world is vast, ride on public roads, invited into communities, clubs, low cost insurance, trail systems etc. Why, there is a BIG LOBBY for ATV's. In most areas an AATV can't even be driven on the side of a road, it must be trailered.

So from many viewpoints a new AATV design is needed. Especially in the recreational segment. So how do you start? Well forget the banks, their into low risk and high collateral, and venture capitalists aren't very venturesome. So you need to start small and get a small group of like minded investors. Say 10 guys kick in $5,000 (change to suit), with $50,000 working capital you can build a proto-type, then market it using social networking, and at large venues, Mud Nationals etc. Then take deposits for orders. This method is similar to Kit Aircraft industry, build a flying proto-type, go to EAA, and Sun/Fun, get a booth and take deposits.

[Ken Hiltz]

This may be a 6x6/8x8 amphib forum so one would expect a "new" 6-8 wheel amphib to start there. You've already stated the obvious to me. To sell into the fast paced 2x4/4x4 market you need speed, suspension, . . . Put a tub on the 4 wheelers design.

[Beeman]

"I think the biggest thing the amphib industry lacks is marketing. But TV comercials and magazine adds cost money....And I bet the profit margin just isn't there in this economy."

I don't fully agree with this. The AATV's are well known, and have even taken on the brand "Argo" as the all encompassing label for these types of vehicle, like you would see brand names as "Kleenex" and "Rollerblades" classifying those particular products. I don't believe that a 6x6 or an 8x8 is unknown to anybody looking for a recreational toy or for a workhorse application.

I do think that AATV's as they are currently built and "marketed", suffer from being pinned into very unique situations where they would become the #1 choice for users. Versatile? yes - Applicable? seldom. It's the jack of all trades/master of none scenario. I think a new breed of design would be to make the vehicle capable of a quad or side-by-side in speed and suspension, while maintaining an amphibious nature beyond a snorkel. If it's purely for fun, than make it a unit where you "are" the machine (like a bike or a quad).. if you are merely a driver, you'll lose the thrill crowd. (I think this design should have a single user (in the center), have little carrying capacity and probably open without a roll cage. It should have reasonable speed in the water). If it is for a workhorse, than the design should focus around carrying capacity, high torque on land and high trust in the water. I'd put in seating for two people.

[azz7772]

[QUOTE=Bw6;114953] hired a test driver and told him to go break it, which he promptly did. The testing revealed design weaknesses, these flaws took about 2 years to correct.]

that would be a great job

[thebuggyman1]

I agree with the "price doesn't matter"
What matters is convincing banks to finance.

[Beeman]

Definitely agree with Bw. It has to be able to grab a portion the ATV/UTV market.

[Bw6]

Kadoo, thanks for asking. What brought the Hoot down, was mainly 2 things: 1: The Hoot as designed for production was not commercial. Knox hired a test driver and told him to go break it, which he promptly did. The testing revealed design weaknesses, these flaws took about 2 years to correct. This drained a lot of the available cash, to Knoxs' credit they wouldn't ship the machine until it was ready. 2. Is something that is the downfall of many companies, "It's not invented here" syndrome. Meaning that ideas for product improvement are ignored, only because the source was outside the company. Engineers and Designers are especially guilty of this. In the case of Hoot, design advice was largely ignored until it was too late.

I'm not surprised that RI production/employees are down, Argo goes through the same cycles, the only thing that saves Argo was their foreign distributors allowing them to sell machines abroad.

I believe to be successful in the AATV recreational market, you need a machine that will attract the ATV/UTV guys. Argo calls their 8x8 line a UTV (Side-by-Side), but just because they put in a couple of suspension seats and some bling, doesn't make it an UTV. The ATV guys want, style, no maintenance, and speed. It doesn't mean much that no ATV can follow an AATV, that's why they have a winch.

So a successful AATV that's going to win over some of the ATV market needs the above, plus a suspension, and decent water speed. Price is secondary, if it does those things people will buy it. Our traditional (Argo) market is just too small.

The Hoot was close to being a winner. It had sport's car handling, light, straddle the suspension seat, true 6 wheel drive, and handlebar steering. It had some weaknesses that could be addressed, maybe the new guys will continue the evolution.

[brushcutter]

Since molding a poly body is such an expensive proposition, the "gorilla hull" might work. It's a lot less expensive to build a mold for fiberglass than to tool up for poly forming. This business is located a short drive from my home, and I know the owner. The gorilla Hull is guaranteed for the life of the "boat" and if I remember right it's made with Kevlar. Just something to think about. If you ever decide to go into production, I'll try my best to get in on it, I want to be in the R&D dept.

[thebuggyman1]

Grouping all quads together, kadookid, is like grouping all amphibs together. There is a huge difference between a maxII and a turbo diesel mudd-ox.
I've seen the little 2wd quads fly across the sand dunes, and 4wd ones that can't climb the hills. On the flipside, I'd much rather push snow with a 800EFI than try with the small light 2wd race quad.
I think the biggest thing the amphib industry lacks is marketing. But TV comercials and magazine adds cost money....And I bet the profit margin just isn't there in this economy.
Not to mention having the competeing manufacturers cooperate on such a venture.

[kadookid]

just curious BW6 was it the economy that brought hoot down, I spoke to R I this week and they actually only have 8 employees is what I was told. it has allways baffled me how popular 4 wheelers and side by sides are compared to an aatv that market is huge the cost of those machines new is about the same as an aatv, then they add snorkels and other hop ups to go through deep water why not just get a machine made to do that, it must be the lack of high speed or the maintanence on all the chains that turns them away.

[Bw6]

Just curious MudNMall, where are you located?

[azz7772]

found a place very close to home that does custom Roto mold work

Custom Rotational Plastic Molding, Rotomolding, Custom Rotational Molder, Custom Metal Fabrication, Plastic Recycling