What are the Critical Issues for GCT Vehicles Over the Next 3-8 Years?

The outlook for golf car-type (GCT) vehicles is quite positive. Small Vehicle Resource, LLC has announced its latest study of the market, including personal transportation vehicles, low speed vehicles, light duty utility vehicles, and fleet golf carts. This study and analysis will be available late this month.

Critical turning points in industry and market development

With the strong likelihood that there will be significant tariff penalties assessed against golf car-type (GCT) vehicles imported from China, what does this change in the competitive landscape mean for the industry and the market? This article takes a look at the key issues going forward over the next three-to-five years.

It should be noted that these issues are covered in SVR’s upcoming market report in considerable detail, along with comprehensive forecasts to 2023.

Key market feature going forward: Excessive inventory buildup and sell-of

The dynamics of the GCT vehicle market were profoundly changed with the petition brought to the International Trade Commission by the American Low Speed Personal Transportation Vehicle Manufacturers Coalition in Juen 2024. In its petition, the Coalition alleged that GCTs from China, in particular those partially assembled, benefitted from Chinese government subsidies or were selling to U.S. importers at lower prices than the same product was sold in China (i.e. dumping).

The findings by the ITC and by the Department of Commerce, which looked at the dumping side of the issue, have resulted in very substantial penalty rates that will significantly raise the prices of such imports to the U.S. market. These findings and the assessment rates will officially be implemented sometime this month (August).

In anticipation of these findings, certain Chinese companies rushed substantial supplies to the U.S. in the latter half of 2024. It is believed that the vast majority of these vehicles have been warehoused at the various ports of entry and have not been released to importing companies. Assuming these units will be released at some point over the course of 2025, they are likely to have a major impact on the market. Excessive inventories of these imports will be sold off only at lower prices—prices lower than similar models from domestic manufacturers. Thus, it is also likely that the difference between domestic production and sales of domestically-produced GCT vehicles will increase.

SVR’s new report includes a predictive model of the price decreases as inventories are reduced over time, and the impact on sales of domestically-produced units.

New markets ahead? Aggressive marketing efforts needed

There is considerable potential for segment growth in two areas, according to the SVR report. The first is what the report characterizes as the short-distance driving market in the consumer channel and other being the last-mile delivery market.

Short-distance-driving dominates movement from point A to point B

U.S. Department of Transportation data shows that the majority of all miles driven in the United States are for trips of seven miles or less. These short-distance trips in terms of their number are far more numerous than longer distances. Street legal, low speed vehicles could well become one of the principle means of undertaking such trips.
Exploiting the SDD market will require moving away from the traditional customer interfaced, which is a walk-in customer. Marketing campaigns will, of necessity, embrace a wider set of stakeholders, including local transportation departments, safety officials, and others, including neighborhood representatives. This broad base of stakeholders need to be convinced that LSVs are safe, dependable, and efficient in meeting constituents’ mobility needs.

To some degree, and increasingly so, street legal LSVs are making headway on a national basis. The evidence of a widespread grassroots movement to allow LSV usage on public roads is evidenced by the plethora of municipal hearings involving the issue.

If this SDD market takes hold as a lifestyle alternative to the conventional automobile, it will be a gamechanger for the industry promising to expand sales by a multiple of two or three over the next 5-8 years.

Last mile delivery market needs GCT utility vehicle
While the last mile delivery market has been developing for several years now, the GCT utility vehicle, adapted to this market, has not made major strides. Instead, less capable vehicles have been tapped for the task—such vehicles as cargo bikes single rider scooters, and even bulky conventional vehicles have been used.

More recently, minisubs have been introduced for trial runs in a number of urban environments across the country. This supply chain concept fits readily into a system that could involve GCT utility vehicles. While both Club Car and E-Z-GO have GCT models will-suited for the market, it may be companies outside the traditional golf car industry that first take advantage of the opportunity.

Honda, for example is participating with a new four-wheel vehicle in a trial in New York City and a firm based in the U.K., Fin, plans on expanding to the U.S. market this year. Developing this market requires finding partners and investors in a collaborative framework.

Keep the upgrades coming

There have been many upgrades to the basic golf cart vehicle of old. These upgrades, such as four-wheel hydraulic disk brakes, light kits, backup camera, G{S technology. etc. have greatly enhanced the vehicle to the point that it is almost difficult to name it. We at SVR have chosen the label golfcar-type vehicle or GCTV. This nomenclature covers both consumer-oriented and commercial market segments.

These upgrades and others have positioned GCT vehicles to successfully enter and exploit the markets described above. Vehicle interconnectivity and driverless technologies have also been initiated and would further facilitate successful market entry. Another upgrade which has been either overlooked or given relatively little attention, but nonetheless would be important for sales growth, is a fully-enclosed driver/passenger cabin. Not a loose canvas type but rather a hard shell with removeable doors for clear weather driving and the open air feeling. (It should be noted that certain models, such as Club Car’s Carryall line do have this option.)

SVR’s new market analysis comprehensively brings these factors and opportunities together as a guide, and hopefully an inspiration, for senior executive and managers to exploit the opportunities that lie ahead.

For more information on the SVR market analysis, Market Outlook for Golf Car-Type Vehicles Trends from 2020-2924, Forecasts to 2032—Tariff Impact and the Potential for Strong Market Growth, contact Stephen Metzger, Managing Director, Small Vehicle Resource, LLC at smetzger@smallvehiclereousrce.com or (914) 293-7577.

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Contact the Author: Steve Metzger at smetzger@smallvehicleresource.com.  Or check out our website at www.smallvehicleresource.com, where you will find an extensive database of vehicle models and can make side-by-side comparisons of vehicles based on a full set of specifications.