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Insight

Powering Recreation on Land, Air and Sea

Thu, 09/01/2016 - 13:01

The motto of Bombardier Recreational Products (BRP) is simple: “Moving people with passion and innovation.” Its innovations have fueled the company’s growth with manufacturing plants now in five different countries, a direct distribution network in 20 countries and a reach of 107 countries through indirect distributors. Mexico is a significant player in that success.

The country’s competitive economy and openness to international trade are two factors that make it a key contributor to BRP’s international expansion, says BRP President and CEO José Boisjoli. “Through a combination of Mexico’s outward trade strategy and BRP’s exports business model, we can find new markets for our products while increasing our volumes and creating more jobs,” he says.

Originally a division of airplane and train manufacturing powerhouse Bombardier Inc., BRP was spun off in 2003 to become an independent brand. The company specializes in the design and manufacturing of recreational vehicles and engines. Its product portfolio is divided into all-terrain vehicles and seasonal products such as snowmobiles and watercraft. BRP’s Rotax line focuses on engines for its vehicles and for aircraft and motorcycles. Its products are sold for both public and military use.

In Mexico, BRP has three plants involved in exports to over 100 countries, one in Queretaro and two in Ciudad Juarez, Chihuahua. The Queretaro site manufactures the Sea-Doo watercraft and Rotax engines used in all BRP’s vehicles. This site required a US$100 million investment for construction and operations, coming on line in 2013. Before that, BRP invested US$35 million to move its allterrain production to Ciudad Juarez in 2005, beginning operations at its first plant in 2007 and specializing in the assembly of the Can-Am all-terrain and side-by-side vehicles. The plant now employs 500 people.

The company inaugurated Juarez 2 in April 2016. It will provide employment to 900 people and will be the main platform for the production of the new DEFENDER model, created specifically because of requests from clients according to Laurent Autier, Commercial Director for Mexico and Central America of BRP. Juarez 2 is a state-of-the-art facility that will receive a Leadership in Energy & Environmental Design certification, allowing it to eliminate waste production. “In this new facility, BRP will also produce and assemble different components for several vehicles as part of our strategy to remain competitive,” says Autier.

Although the US and Canada are BRP’s main markets, Mexico is the third most important region for the company, especially for the commercialization of allterrain and side-by-side vehicles. According to Autier, the company has 25 distributors in Mexico operating in 35 locations. Its five-year objective for the country is to have a network of 55 dealerships. BRP sells over 4,000 units per year and expects to close 2016 with sales of over 5,000 units. By 2020 the company expects to sell 10,000 units annually.

The biggest hurdle for the company is increasing production in both Ciudad Juarez and Queretaro. Ironically, the growth of the automotive industry has not helped BRP as it has made it harder for the company to attract more suppliers, Boisjoli says. Staffing, on the other hand, has been easier since “Mexican people are passionate and excellent workers,” he adds.

For BRP, the bottom line comes down to innovation. “Our story is about creating new vehicles that move people both physically and emotionally,” says Boisjoli. At an Orlando, Florida event for global dealers in mid-August, the company unveiled three vehicles for 2017 including the Can-Am Maverick X3, the Sea-Doo Spark TRIXX PWC and the Can-Am Spyder F3 limited, according to BRP’s website. The company is expecting these products to add to its earnings. In June, BRP raised its guidance for fiscal year 2017, saying in its fiscal Q1 earnings statement that it expects total revenues to climb 4-8 percent, year on year, while seeing a 2-8 percent rise in net income for the same period.

To help reach those targets, BRP has four development centers. The enterprise has invested more than US$165 million since 2011 in research and development projects and these efforts have led it to register 1,500 patents. Mexico could play a bigger role in R&D as the company expects that by having a bigger presence here, the country will eventually also host BRP's R&D activities, concludes Boisjoli.