Power Sports Vehicles Demand, a COVID-19 Side EffectBy Alejandro Enríquez | Thu, 11/05/2020 - 06:00
Q: What opportunity and trends are emerging in the power sports segment?
A: The COVID-19 pandemic created an opportunity for us because when you use a vehicle for snow, you are not in contact with anybody. The same applies to all-terrain vehicles (ATVs) and side-by-side vehicles (SSVs). There is a huge opportunity for us and we are working to supply to these customers.
An important trend has been e-commerce. People never bought a recreational product online before and now they do. This is really interesting. We are asking ourselves what can we do better and how can we provide what the market is actually demanding. In North America, we are seeing 40 percent more customers buying our products.
Q: How did BRP face the COVID-19 pandemic at its North American facilities?
A: No manufacturing company can face a shutdown unabated. To stop some equipment and machinery requires days. The ability to readjust while finding a way to face a market in a downward trend was key. So was our ability to reopen. People were fundamental in the equation. Throughout the different countries where we are, people jumped into the boat with us. Together, we turned the situation around. COVID-19 has tested the ability of an enterprise to adapt to a fast-changing world. By not laying anybody off, we created trust in our team that we were going through this together. Now that we are coming back, we are in fact offering new jobs.
We also took the best practices from our facilities around the world. We created committees to watch over the system we created. Of course, it was difficult at the beginning but our groups prepared our facilities and established processes to secure our buildings. Besides, we created a budget to audit all our processes.
Q: What were the main lessons learned from the pandemic?
A: All our product lines have performed well, despite some of the challenges we faced in spring when everyone remained expectant about what was going to happen. It was quite intense as we restarted operations at the end of spring. In Mexico, we manufacture Can-Am ATVs, SSVs, and the engines for these product lines. We also launched a rental vehicle service, which has been quite efficient. We were doing quite well before but with COVID-19 we are performing extremely well. We have five manufacturing facilities in North America; in Canada, we manufacture snowmobiles (Skii-Doo) and the Spyder, a three-wheeled motorcycle, and in the US, we manage the logistical aspect.
COVID-19 stopped our operations for nine weeks and the processes to restart took two additional weeks, so we stopped for 11 weeks. However, we did not lay off people. It was the right thing to do and when they came back, they were full of enthusiasm. To prevent disruptions, we did emergency shipments. As of mid-October, the challenge remains in transportation from the Pacific but we are on schedule at every facility.
Q: BRP recently announced a new facility in Juarez. What is its status?
A: Building a facility can take time and we are taking the right steps in designing the facility. Everything is in motion and according to plan. Construction is expected to start before the end of 2020.
Q: What are BRP’s strategies to develop local suppliers in Mexico?
A: Our strategy is to get as close as we can to develop as many suppliers as possible. It is not always possible but we have a large number of suppliers in Mexico and we are always looking to increase that number. Most of the time it comes down to price. Mexico has been wise in developing free trade agreements with other countries to attract more businesses.
Q: What are your views on the dilemma of automating operations versus keeping cheap labor?
A: Automating operations is a question of financial efforts. In the end, a station that will replace workers needs to be justified by the savings it will generate. In Mexico, the industry has a long way to go for this to become a profitable option. Our processes require manual labor.
BRP is a Canadian company focused on the production of power sports vehicles. The company has five facilities in North America, three of which are in Mexico