Thank you everyone for joining us today. Welcome to the BRP Kickoff 2019. Today we'll have management presentation from a few of our members of our management team. Before we get into the presentation, I just want to reiterate that there may be some forward-looking statements in the presentation. You may refer to our MD&A for the risks and uncertainties. With that, we turn it over to José. Good morning, everyone.
Good morning.
How was Ryker? Thumbs up, thumbs down?
Very good.
Very good. I would like to introduce a few people in the room. First, we have Buck and Alain Baudoin from the board. Welcome. A few people from the management team, that is Tracy Crocker, Sandy Scullion, Bertrand Thiébaut , that you all know. You saw them on stage last night. Leslie Quinton, VP, Communication. Andreas Bauer, Manager of Strategic Planning for Powersport. Anne-Marie LaBerge, Senior VP, Global Marketing and Communication. Josée Perreault, that is famous now. Denys Lapointe, Senior VP, Design Innovation. Laurence D'Entremont, Senior Advisor for Communication. That is the management team. Also I would like to highlight Robert, that is probably wearing the Ryker shirt then. This morning, my presentation, I want to do a scorecard of when we introduced to you the 2020 challenge. We do that once a year at BRP, between ourselves.
I just want to flash to you what we consider really great achievement and some areas that need improvement, but I wanted to give you at least the perspective of the management team. As you remember, in Austria in the spring 2016, we introduced to you the 2020 challenge and our focus on growth, profitability and enterprise. We're targeting by the end of 2020 or fiscal year 2021, to deliver CAD 6 billion in sales and CAD 3.50 of EPS. This is the result of our fiscal year 2019 first half. Our revenue 17% up, normalized EBITDA 47%, EPS 103% and North America Powersport retail 15%. Obviously we have a very good momentum and like some of you wrote in the report after the quarterly result, we're firing on all cylinders and we're very happy.
One thing that is very important Anne-Marie joined us two years ago, and when I sat with Anne-Marie LaBerge, I said to her, "We need to bring our brand to the next level. We need to talk about more and more, and we need to be focused." Anne-Marie, who joined two years ago, said to me, "We need to define our brand framework to make sure that when we do things, we're all aligned." We never talked to you about it, and Anne-Marie will present later on this morning. Basically, she taught me that we needed to define our purpose, our positioning, our point of reference, a character and tone of our communication and marketing, our value related to the HR, and also our brand promise. Typically, Anne-Marie told me that the company would take 18-24 months to do it.
I gave her 12. We ended up doing it in 14. For us, this brand framework is very important to make sure that we're all aligned in terms of marketing material, communication, and the way we present ourselves to the consumer. Anne-Marie will tell you more about it in a few minutes. For me, green check mark. Also, the dealer network development. When we came out public five years ago, we set the objective to sign 250-300 dealers. We achieved 289. There is some attrition on a yearly basis, ±20, but basically the dealer network is quite stable. We improve our U.S. coverage by 25%, and our side-by-side coverage by 60%. We've delivered our dealer network evolution, and we have the best value proposition in the industry. For me, check mark, green, very well done by the dealer network team.
The other one, we've talked a lot because industry data is easy to get in North America, but North America grew 27% in the last three years. When you look at the performance in other regions, EMEA, 17%, was pulled down by Russia, but overall, good growth despite the Russia slowdown. Asia Pacific, 51%, and Latin America, 35%. As you can see, we're growing on the top line. We're growing in every single country of the world, and we're very pleased about that. Check mark green. The other one, I'm super proud of the performance we have in our two mature products. Snowmobile, since we introduced the G4 platform, we have great momentum. Today we have 60% plus market share. Watercraft, 55% plus market share worldwide. What I'm very proud of, right now, those market share is the highest in the history of both brands.
Extremely proud of what we have accomplished. I will say the best is to come. We have more things to come to continue to fuel the growth into those two product lines and the Sea-Doo Fish Pro that you saw last night, we believe will have a lot of traction. For us, green check mark. The side-by-side business plan. Introducing when in September 2015, we committed on stage to introduce a new side-by-side every six months for the next four years. The purpose was to say to the rest of the world that we're serious about the side-by-side and to attract the best dealer, and we succeeded that. So far, we have delivered seven new platforms in the last three and a half. One more to come next spring.
Don't be worried, after that eighth one, there will be other product news, but at least we'll have done eight in four years. Super impressed with the delivery of the Juárez 2 facility. Building the building in one year, ramp up production, and now we've been increasing capacity. Phase 1 is done, phase 2 is ongoing. Doing all this, that sequence of new product on top of increasing capacity. When you're producing product every day, the team have been able to do that with incredible quality. This is quite an achievement. Since we introduced the Defender in September 2015, our volume of side-by-side has doubled. Very, very happy about the plan and the way we deliver the plan. Green check mark. Overall, BRP, we focus on growth, agility, and lean, and we're delivering, and I'm super proud of the way we execute our plan.
I just want you to realize that in the last three years, Juárez 2 was built, Québec been under significant improvement, enlargement, and also [inaudible ] that you visit in Mexico were totally modeled. We never missed a beat in production. On top of that, we have our process for product development, and we're delivering on the plan. We're doing all this, and today we have the reputation of outpacing the industry for innovation, and we're doing all this, keeping our quality, our cost of quality below 1%, which is, we believe, a benchmark into the industry. We never talk about it, but we measure on a yearly basis the employee engagement, and obviously success generates success. Last year, the last report, our employee engagement at BRP was 87%. When you score above 75, you're state of the art.
We are very, very happy about the execution overall at BRP. For us, green check mark. The three-wheel vehicle business. I put it yellow. It might surprise you, but we are happy, but not satisfied. First, we depleted the inventory in the last two years. Cost us more than what we had anticipated. This year, because of the very bad April, we decided to advance our non-current program by a month, and that is why I rated it yellow. I am super happy about the program that the Josée Perreault's team have put together. This morning you will hear more about the numbers behind the school program, the Ryker, the RT F3 repricing, the leasing program, and also reinventing the business model, 3 SKU, 75,000 ways of customizing.
You will see the number of Josée and we have the data to back our goal. Our objective with the Spyder business or the three-wheel vehicle business is to triple the business in the next five years. We will be disappointed if we will not be doubling the business. That is the goal that we will fix for the three-wheel vehicle business with the plan that Josée Perreault put together. The marine business. First, it is not easy for Evinrude because the industry is against us. A lot of our sales is repowering, putting a new engine behind an existing boat, and this market is shrinking. The new boat, a new engine package boat is growing. We are behind our plan for G1 to G2 transition. Right now, the G2 above 150 is out. Below 150, we are behind.
We will correct that in the next 18 months. Despite that, it is difficult for the Evinrude market situation and the G1 transition, we are super confident about the marine strategy. Tracy will give you a bit more color about the buy and build and transform strategy to fully unlock the full potential of Evinrude. We do not think there will be significant impact on our result in the short term, one to two years, and we will talk about it. We already told you CAD 0.10 for next year. When you will hear the plan that Tracy is putting together, you will see that it is a diversification and a growing factor vector for the business. Happy about the marine plan.
We cannot not be happy about the new share price evolution. Above the share price that has grown quite a lot in the last two years, the management team with the board have worked to do NCIB, SIB dividend and we returned CAD 900 million of cash to the investor. Happy to be able to return good return for the shareholder and return cash to the shareholders. The creation of the two new groups. BRP is growing. There is a lot more product. We have a lot of opportunity globally, worldwide. I felt that it was time to have more focus with two groups. We created the Powersport group, which includes Ski-Doo, Lynx Snowmobiles, Sea-Doo Watercraft, Can-Am Off-Road, Can-Am Spyder under Josée, still report to me, and the Rotax brand.
In the Marine Group, we have Evinrude right now, Alumacraft and Manitou and more to come. We said on the call two weeks ago, we are right now exploring maybe other acquisition in the boat industry. We'll see if it fits our guideline or what we're looking for. We might conclude that we see more to come. The goal of creating those two groups is to make sure that the team continue to focus, improve efficiency, continue the growth and the diversification. That's in a nutshell, the story of and why it was time to create those two groups to make sure that we bring BRP to the next level. A word on the next step on the 2020 challenge. In spring 2015, we've launched it. We are halfway there, two years and a half have passed.
We have two years and a half ago. Some investor and some of you are saying, "When do you will restate the 2020 challenge because the CAD 3.50 million is coming fast?" The plan that we have is we're working right now on the next plan, probably in one year from now. We already give you that we're targeting or we're confident to deliver at least CAD 3.50 million for fiscal year 2020, one year in advance. We will probably meet together by the end of 2019 to define, to restate what's next. We wanted at least to give you a guideline when the next challenge, call it the 2025 for the time being, will happen. Probably in one year from now, we'll be able to give you a perspective on the long-term plan or the long-term objective of the company.
That's in a nutshell what I wanted to give you as an update. This is what we're planning for this morning. Anne-Marie LaBerge, who is Senior VP, Global Marketing and Communication. Anne-Marie has been with us for two years. She came from TELUS, the big telecommunication company in Canada. Anne-Marie will talk to you about humanizing the BRP brand. Followed by Tracy. Tracy has been with the company one year, about one year now. He's leading Evinrude and now the Marine Group. Tracy will give you an update on why we enter the marine business. We've done the acquisition and the buy and build strategy. Bertrand. Bertrand has been with us for six months. Two months on the road, visiting all the sites, many, many regions, and even four months in the office beside me. Bertrand will give you his perspective on the Powersports Group.
Sandy, that you all know, Senior VP of Global Sales and Services. I think you met Sandy a few times now. Sandy will give you an update on the retail trend, the global retail trend and the product news. Josée Perreault, we kept the best for the last. Josée Perreault will talk about the Can-Am three-wheel vehicle plan. Josée Perreault has been with us for two years. She comes from Oakley, the glass company. She'd been working a bit behind the scene to put together the plan that we've launched last night with the dealer, and she will give you more detail about the three-wheel vehicle plan.
We are planning about 15 minutes by presenter. I would ask you to keep the question for the end. We are planning a 15-minute presentation max, 5-10 minute question at the end, and we believe we can pack all of this within 2 hours. All right. Thank you. Anne-Marie?
I am so heard the best for last. Welcome, everybody. I am very excited to be here. I have been at BRP, like Josée said, for I would say 22 months, seven days, six hours. No, it's been a little less than 2 years, and it's been quite the ride and the education. When I first joined BRP, I thought that HD stood for high definition, and I said, "Why do they talk about high definition so much at BRP?" It's been an incredible ride. I would have to start by saying that for a brand professional, to be able to be the shepherd of these 6 iconic brands is the most exciting thing that could happen in your career. I joined for these friends, and I joined, of course, after meeting with Josée, but no one could resist coming to work for him.
It's evaluation time. I am just doing my little work. I think that the whole strategy, and I will tell you in one line what the marketing strategy moving forward at BRP is going to be. We have 6 incredible iconic brands. We have brand worshipers. I have spent my career in the telecommunication industry trying to having people stop hating us and trying to move non-believers to believers. When I was interviewing with Josée, I said, "Oh my God, like people are just in love." Visiting YouTube and what's being said on social, you do not have brand ambassadors. You have brand worshipers. Can you imagine the power of unleashing these iconic brands and the brand worshiper to be able to turn and yield a positive business return?
That what we have been focusing on for the past few years, and we are going to be focusing on in the next year. As you know, doing a presentation to the analyst community on marketing is a little touchy. I wish I could bring you in the kitchen because we have been doing some exciting things, but they will not let me. I am going to share some of the stuff. I am going to try to bring it as real as possible, so you do not leave here thinking that we have great theory but no real action. Okay? I am going to try to do this. The first thing is, every year we do a brand benchmarks survey. We have been doing this now for a few years, and what this does is it actually helps you understand what each brand is at within the path to purchase.
As you know, there is not one way to looking at engaging with consumers. It is absolutely critical that we understand, are the brands known? Secondly, do people understand what the brand stands for? Thirdly, do people want to buy me? Historically, brands have a tendency of hanging out in the low funnel. Buy me. This is where companies are comfortable. They're pushed by Sandy Scullion that are saying, "If I give you a marketing CAD 1, yield me a CAD 1 in sale." I'm like, "Wait a second here. I won't be able to sell if people don't know why they should buy me." Furthermore, maybe they will buy, but what happens is you need to discount. That's why you need to do CAD 2,000, CAD 3,000 because I go straight to buy me. Consumers don't really know why, so they need an incentive.
We have proven that when investing in the upper funnel, brand equity, we spend less in promotion, we have real case that proves that. What we did is we said, okay, Sea-Doo, awareness is super high. There's no surprise there. Conversion is not as high as it should be, the reason for this is that we stopped telling people why Sea-Doo, why Sea-Doo. We love these products. We know we're the best, honestly, usually, hero brands have a tendency of doing this. We need to start again in talking to consumers about why Sea-Doo is the best product out there, why Sea-Doo is the best product out there. Immediately once you pull up conversion, you'll see sales go up. On Can-Am off and on-road, I'll start with off-road. The opportunity is awareness and conversion.
I will share with you a specific case of what happens when you invest in those two and the results in sales. Jose might be, José Boisjoli's favorite, Josée Perreault, but he has the greatest challenge. That challenge is that not only does she have to bring up awareness in three-wheels, but for her product, Ryker and Spyder, but she has to invest in awareness in three-wheel category. It's not that people don't know the product. They don't know the category. That requires more marketing CAD. If we would share, which we're not, but if we would share promotional CAD on revenue, definitely here we would spend more on three-wheel category because we need to invest in having people aware of the entire category.
Now I'm going to share with you two pillars that do that strategy on increasing our sales for each one of our brands. We're going to be investing in brand equity and digital transformation. Brand equity is really to go get share of mind and wallet of consumers by investing into our brand consideration, the why that I've just talked to you about. Digitization, historically, powersport business, very poor in digitization. There needed to be a massive investment. You cannot build consumer intimacy and humanizing our brand without the power of digital. I will share with you a bit what BRP's been doing on that front. If we start with brand equity, I wanted to start by this. As you know, today, there's a whole marketing revolution where consumers have kicked out brands from the driver's seat.
They've pushed us in the back seat, now they have the control. With this, there is a global social movement where now consumers buy experience, they don't buy product. 20 years ago, consumers would buy product became commodity. Then it was all about service. I remember when I was in telecommunication, 2009, we had a big epiphany that we were not a telco, but a service company. Everybody was talking about service. Today, people buy experiences. If people buy experiences, we're not competing with powersports organization anymore. We're competing with any organization that is fighting for discretionary dollars. That could be Walt Disney World, and it could be Samsung Home Theater. You would say to me, "Okay, what does that change in your strategy?" Here's what it changes.
For example, when we buy keywords on Google, instead of buying snowmobiles, we're going to buy winter fun. That is really addressing an important change in the way that we see this, because this is absolutely key and central in our strategy. If you don't believe me, which I'm sure that you do, Watermark is a research firm, a consulting group that is out of Connecticut, did a whole survey in 2014 that demonstrated that organizations outperform broader markets by more than 25% when focusing on experience. We make the best product. We do believe that we make the best product in powersport in the world. We believe that. We don't need to sell just a product. We need to talk about the experience. This is what consumers are already doing. This is the transformation that is happening.
They talk to you about this, it may seem fluffy, but having a brand framework is actually the North Star in our organization. As you know, BRP is a teenager with an old soul. We are 15 years old. We're going to be celebrating in December. Very young organization with old brand. It was time for us, if we're going to be building brand equity, we first need to solidify who we are, what do we stand for? What is BRP? The importance of a purpose is that it will inspire everything that we do, how we behave as an organization, how our employees behave, and even inspire our organic and non-organic growth opportunities. It did take us 14 months to develop this whole thing, but as you can see, it actually defines the DNA.
Our purpose is we exist to create new ways to move people so that experiences are measured in emotion rather than distance. We reimagine the way you accept your world. This is inspirational to where BRP might want to go, in the future, but it's also very presentative for today. I won't read the rest, but I want to talk about one thing. I do believe that a brand is actually comes as inspired from what's happening with it. I use the term in quotes from within, but I think it's a bad French translation. Without having all of the employees carrying this purpose, there's absolutely no point of having one. Very rare.
It's actually the first time in my career, and I've been at it for a while, that an organization has the courage to revisit its value to ensure that we can deliver on the brand. We did that at BRP. Now we have four values that will entice the right behavior for our employees to be able to deliver on. Finally, the brand promise. I'm going to share with you a little video. A brand promise is basically our commitment to consumers. We'll just run a quick video. What does adventure by design mean is that whatever the product or whatever purpose you ride it, BRP will be obsessed in delivering the best experience. That's that. What we did is that brand framework that I showed you, we redid it for our six product brands.
As you can imagine, the perception of what Can-Am would stand for across the organization was very different. You could interview and ask people, "Oh, you know what? It's all about money. No, it's all about rock. No, it's all about speed." It was very important that if we're going to build equity, we absolutely needed to define what these brands were. We did that for the six product brands. We can actually behave and as that brand framework represents. The tone and the voice of each one of these brands. It was really important for us as well to be able to humanize our brand. What I mean by that is that if consumers are in the driver's seat, consumers do not want to connect with a corporate entity.
They want to connect with a human organization, and the language for this is very important. I call the language to the left, this was an old ad, I call it R2-D2. I'm a Star Trek fan, it's very product defined and oriented. Where we're moving now to a much more human, Can-Am's tone, it's all about gutsy, but it's about real, and it's about human. You will see that all of our ads, if you were there yesterday, we're built for this. We're built for this means that I'm a mother and I'm built for that, but my machine is also built for this. Same thing with the farmer. The farmer is built for farming, but the product is actually built. We always say that we build our product rider down.
If you look at the language, as we were at our [work essay], this whole campaign was specifically targeting farmers. What we did is we obsessed in visiting farmers, looking at farm use, the language. We use real farmers in our ads now. We do talk about the product in a lot of the case. We specifically talk about the technical elements. When connecting on the brand equity and on the brand awareness front, we want to connect with your heart. When I talk about connecting with hearts and minds, this is the heart portion. The results. Another thing that we did, the brand attitude is absolutely critical. I talked to you about focusing on the path of purchase. Am I at a point now with this brand where I need to talk about awareness or consideration, or am I at the point of sale?
The other thing that we did is we realized that it's impossible for us to attack the world with each one of the brand. We'd be spending millions and millions and millions in marketing. What we're doing now, working with Sandy very closely, is we focus on opportunity. We're so good at it. We go in, we laser in, we understand that market. What is the need? Who are we talking to? Where in the path of the purchase are the consumers? We basically go in with a full-on marketing strategy. This specific campaign is for North America, it was for SSV, ATV. The results of this campaign were from 2018 in the spring, a campaign 2018 in the spring, to the campaign that ended in the fall of 2017.
I don't know how much you know about marketing, to yield a 7% increase in unaided awareness in that timeframe is extraordinary. You know what's more extraordinary is we spent CAD 1 million less. On brand equity, the Why Can-Am, you know what we did is, we call it putting butts in seats. Today you went riding this morning. Isn't there a better marketing tool than actually riding the product? I don't believe that. We truly believe that if somebody sits in one of our products, they will buy it, we have the proof of that. We're spending a lot of dollars less in advertising at that level and way more in experiential. We bought trucks and machines, we go and we drop products at our customers.
This yielded 2.2% of market share increase in that time and an incredible 18% in retail sales. You know what? Spending millions of dollars less in promotion dollars. I could share an example for Sea-Doo, Seth didn't want to give me the time to do that. I think this brings the message home. Now let's talk about digital. I won't bore you getting too technical on this is the path to purchase that I've talked earlier. Digital is absolutely critical to be able to connect with consumers' hearts and minds throughout the entire path to purchase.
There is moments of truth, as you know, from, "I don't know you exist" to, "Oh my God, I want to buy again," or, "I want to buy more product." We are now setting up platforms, CRM platforms and marketing automation platforms at BRP that will allow us to actually speak to you at the right time, at the right place, talking to you about the right product. This is really what we're trying to do. I don't need to sell you guys the fact that digital is the single most important marketing tool today, not just in powersport, or automotive, this is an automotive, overall. It was absolutely critical that BRP warp speed into the digital world. There's four pillars to our strategy in digitizing BRP. Automation, this is reach and scale. How can we talk to more people? We are a global company.
We are in hundreds of countries. Again, it would be completely inappropriate for us to start deploying a full-on marketing strategy for all these countries, digital will allow us to be able to connect with more people. The tailored messages to personalization, contextualization. Talk to me at the right place at the right time. There is a great travel site that I won't name. Every time that I use it to book a trip, when I come back, they try to sell me an ad about the same place I just came back from. They would need my team's help. This is all around contextualization. Innovation, this is all about using AI and machine learning into ensuring that I'm more and more pertinent. I wanted to bring you some results again to demonstrate that things are real, and they're happening, and they're moving.
On site performance, so do you know that 75% of the people will never revisit a site if it takes more than 15 seconds or 10 seconds to fully load? Okay. Getting our site speed better, improving it, was absolutely critical. In one year, we improved it 327%. Build Your Own is the single most important marketing tool to drive people from building your machines to going into the dealership and buying it. We have increased 106% the amount of people that filled out Build Your Own on our site. SEO/SEM, I'll quickly explain in case you don't know what it is, search engine optimization, search engine marketing. This is when you go in Google, and you type in words, and the first thing, optimization is organic.
The first thing that comes that doesn't say Ad next to it, this is unpaid, then this is paid, search engine marketing. You want search engine optimization to be at its best because this is free entry into your website. We had double the amount of people that came into our website from organic search in a year, which is incredible because we don't pay for that. That was specifically, I'm bringing this on the Sea-Doo front, but we're doing the same kind of performance on every one of our products. I don't know if you knew that on search engine marketing, when you go into Google, the words that you type in, there's an auction, companies auction for it, prices change all the time. You need experts. We brought in incredible people that are experts into search engine optimization and marketing that help us.
One example here is we decreased 40% the cost of the words that we pay for. Yet, we are more efficient than ever. Increasing the amount of people that come in from SEM into our website. I'm going to at the end of my presentation, I wanted to be very transparent with you guys. This is a Deloitte paper that we found, basically what it says is that there is a path to digitization. This curve, to me, should be a hockey stick if it was truly representative. I'll call Deloitte to tell them. What it is that you start from exploring digital to truly being digital, I believe today BRP is in between doing and becoming digital. What happens is that once you start really becoming digital, you're warped. Things go super fast because you have the right tools.
We have built a best-in-class team at BRP now that I am so thrilled to have. We're seeing things, the speed into which we're moving is getting faster and faster. The last point I want to leave you on is the future. Where are we going in marketing? I like to say that I'd like to work myself out of a job within five years, and the reason for this is if we do our job very well, what we are focusing on today is building a megaphone. That's exactly this whole digital thing is we're just building a megaphone to give the voice to our brand worshipers and ambassadors. All BRP should be doing is actually becoming an air traffic controller to all these things.
After all, how many companies can claim that their customers have given them skin real estate? Like people tattoo our brands on their bodies. Could you imagine if we let these people speak on behalf of us? That would be absolutely incredible. The future is exciting. It's happening fast. That's it for me. Thank you very much.
Is there any question? We maybe have time for one. Go ahead.
As you change the marketing towards experience, are you getting a different demographic coming to the top of the funnel?
Yes, absolutely. What we're doing, talking about experience is we are opening accessibility. We are seeing a different demographic, I can think right now specifically on two of our products. You'll see even on Sea-Doo, we're doing some things right now where we're really opening, because people that ride snowmobiles are more like kind of a tight group, and we're working on opening this tight group and reaching out a much broader crowd. Absolutely. Yeah. Thank you.
Thank you, Anne-Marie.
Thank you.
Appreciate it.
Thank you. Excuse me. Let me start by saying it's no fun working at BRP when you're a yellow check mark surrounded by green check marks. We're going to do something about that, and it's going to start with this new BRP Green strategy. A little bit about myself. You can see my background there. Very excited to be here leading BRP Marine and operationalizing the strategy that we'll walk you through a little bit later on here this morning. To do that today, I'll break it into two parts. The first, I'll just give you a kind of a quick snapshot of why BRP Marine and why getting into the boating industry. Then I'll follow that with unpacking the buy, build and transform strategy that José alluded to a little bit earlier. Okay?
It starts with the size of the sandbox, or maybe I think the size of the swimming pool now, where you've got in the U.S. alone, CAD 185 billion being spent on recreational vehicles, gear, and accessories. It's a huge number. Water sport, fishing and water sport by itself is CAD 41 billion of that CAD 185 billion. Almost twice as big as off-road motorcycle and snow combined. It's a starting point, this is not new to us, but this is a big market. Equally as important, it's a growing market. You look at the bar chart here, you can see that since the recession, it has been a very impressive recovery. In fact, it's predicted end of 2018, we will have recovered to pre-recession levels, driven by new boat sales versus pre-owned, growing at about a 2 to 1 rate that helps drive this growth.
We're also seeing, José alluded to it, that the package business is a trend that's driving this growth package where you get boat engine and trailer in one. Now three out of every four boats are part of a package versus repower. As part of that, you're seeing the horsepower go up, which is driving great margin and good for the industry. Not as good for Evinrude. It gives you an insight as to where and why we need to unlock this to really unlock all of Evinrude's potential in this area. Last, certainly not least, it ties into a lot of what Anne-Marie was saying, is we know these consumers, these consumers know us. They do not only know us, they love us.
27% own an ATV, 34% a snowmobile, 44% a PWC. You can immediately start thinking about the cross-promotional opportunities as we leverage the growth and momentum that we have in our powersport business into our boating business. There's more to that in terms of what built our focus on this strategy. As a starting point, big growing opportunity to cross-promote. That led us to really a three-phase strategy. The first phase, buy. We're thinking of this in kind of a 12 to 24-month timeframe. Followed by build. Build is more of your two to three years timeframe. Then finally transform, and think about that in three to four years. Obviously, these are all working concurrently with each other, but in terms of ultimately delivering the objective for each, those are the timeframes that we've outlined. Let's start with buy.
It begins with getting a critical mass. Critical mass really means finding the right boating segments and then the right brands within those segments that we can bring our core competencies and competitive advantages to help them grow. To give you an example of that, I'll break this slide down, there's a lot going on here, you've got the gray is international, the yellow is North America, and this looks at total boats sold globally in thousands. You got it broken down by the segments here. What pops out immediately is the size of all-around fishing and pontoon. In the U.S. alone, over half of all the boats sold in the industry fall in just those two categories. Okay. A great place to start.
Same look, looking at gray international, yellow North America, a different way of looking at it, aluminum, fiberglass. Here you have that all over same segment around fishing and pontoon for North America, representing over 80% of all of the boats sold. As a company that knows how to design and manufacture in aluminum, that gives us a really great focus. Certainly, why not a better place to start than buying a company that actually has aluminum in its name. We did that with the acquisition that we made in late June with Alumacraft. Alumacraft is a great business, headquartered out of St. Peter, Minnesota. They've been around for 75 years. They've got market share in the mid-teens. They compete against Lund and Crestliner, and we love how they're positioned.
They have a great, what we think is a revolutionary technology, twin-plated 2XB, I should say, hulls. These are riveted versus welded boats. It really gives it a performance profile like no other boat in aluminum fishing in terms of noise, vibration, without compromising any of the ability. A good first acquisition. We love the way this brand is positioned. We followed that up 30 days later by acquiring a pontoon company, Manitou. Manitou is, again, a brand that has been around for a while, 1988, over 150 dealers. They are in the low single digits in terms of their market share. Again, they are a premium pontoon boat, both in terms of the design, the look of the pontoon, as well as the fit and finish. What we really love about this, similar to Alumacraft, is they have some patented technology, Tritoon technology.
That's the third tube that they've integrated into the design of the boat that gives it a great performance relative to any other pontoon in the industry. Now, five years ago, you would never have used performance and pontoon in the same sentence. With a Manitou pontoon, you can do that. Part of that has really. We have benefited from that. We have almost 40% of all the engines sold on Manitou because of the technology that we have. High-performance engines on a high-performance pontoon has really created a great synergy between both of our companies. Like Alumacraft, we love the positioning of this brand in this market. A good place to start in terms of the buy part of our strategy. With that as a cornerstone, if you will, we'll move into the second phase, which is driving growth and efficiency.
This will be broken up into two areas. The first one is really building out the dealer network. It starts with dealer optimization. Being able to take Alumacraft dealers and match them up with Manitou dealers to match those up with Evinrude dealers. We'll have lots of conversion opportunity when we start that process. Shared opportunity between the brands. The second part of that is bringing our manufacturing capabilities and our ability to increase their capacity as we set them up for future growth. Here's an example of how we're going to optimize these networks. You can see the Evinrude dealer network on the left. Over 1,000 dealers spread across most of all in North America. The Alumacraft dealer base still more of an upper Midwest. The Manitou dealer base, again, not as spread out as Alumacraft.
The combination of that really gives you a good visual of how we'll be able to optimize this dealer network. At the same time, we've got lots of expansion, lots of white space that we can bring all three brands into a single value proposition and really grow the network. Underscored by the fact that there's only 14 dealers that sell both Alumacraft and Manitou boats. Great way to start. Lots of opportunity. In addition, we've got a lot of the Evinrude dealers that are out there that are not putting Evinrudes on Manitous and Alumacrafts. We'll get a lot of what we think low-hanging fruit in the short term. We've been able to time up these acquisitions with their dealer meetings, which allowed us to get out ahead and kind of control the narrative.
As a result, we're pleasantly surprised by how many dealers have raised their hand, non-Evinrude dealers have raised their hand and are considering Evinrude. Far exceeded our expectations this early in the game. That's going to be a nice part of what we focus on here over the build phase. In addition, we talked about aluminum as being an important part of this strategy. There's two parts to this. Certainly, we've got lots of technology, lots of know-how, whether that's computer-aided design to assembly, welding, and riveting technology that these companies, and really the industry, has not seen yet. You combine that with our know-how and resources to be able to increase their capacity. We think we'll set this up for the third phase, and I would say the most exciting phase, which is really to transform the industry.
That transform the industry really harkens back to a lot of what Anne-Marie was just saying, is we want to change the boating experience. It's the experience you have before you're on the boat, the experience as you get to the marina to get to your boat, the experience that you have when you're out on the boat, and the experience after you leave the boat. Our ability to do that will really hinge on us taking an industry that, as a boater, I can say hasn't seen a lot of innovation. That experience hasn't really changed much in the last 30 years. If you think, other than maybe pontoons adding upholstery and nicer furniture, we haven't seen a lot of innovation. We think we have the ability to begin bringing that level of innovation to the industry.
While I think this is a very basic diagram, I think one of the things that we will be able to do is address that experience through propulsion. We have technology that is unique to Evinrude, combined with its expertise that we have on the Sea-Doo side, to be able to take that outboard engine and put it under the transom. We're not going to necessarily go into all of what that technology is here today, but we've already gone through the proof of concept. As you think about what that does to the boat and what a consumer is looking for, they don't want to see it. That is an outboard engine. They don't want to hear it. They don't want to smell it.
They don't want to fear it, meaning as somebody's swimming or doing tow sports on the back, and they certainly don't want it to intrude with their overall experience, whether they're tubing on the back or fishing. What we will be able to do with this transformation is do what every boat builder ultimately wants to do, is to find more usable space on that boat. Clearly very excited about the potential of this. We have built it into our new product development plans, this is just one of several initiatives that we have that will be part of this overall industry transformation. With that, I'll pause, open it up for questions. Yes, sir.
Yes. I'm looking at the boating market. Obviously, aluminum is a big part of it, but there's also this fiberglass. Could you talk about your intention to come back into the fiberglass market eventually?
We're looking at all of the segments, as important as the segment is what is the brand within the segment? Does it have a competitive point of difference? Knowing what we can bring to aluminum, we're going to focus there first.
You talked about dealer optimization. You have 1,000 dealers for Evinrude to 150 for Manitou and 275 for Alumacraft. What would be the optimal dealer size in the Marine Group in the U.S.?
We're currently in the process of evaluating that. Building out what we'd call the right dealers in the right markets. We don't have that number exact today. We know it's certainly more than 250, 150 in the case of Alumacraft and Manitou. It's really finding, like I said, it's less about the number and it's more about finding the right dealer in the right market.
Each boat brand has its dealership. When you look at Evinrude, we're not thinking about one dealership network. We're thinking about three dealership networks for the Evinrude brand, for the boat brands as well. There's synergies that'll happen. Let's take the Manitou to Alumacraft dealers, et cetera. We're still very focused on optimizing the individual dealerships.
You're saying this configuration would be obviously different from an outboard, but also different from an inboard outboard or a stern drive?
Yeah. Good question. This is an outboard engine. This has all of the attributes of an outboard engine because it will be an outboard engine. The technology that we have will enable us to put it underneath the transom, put it out of sight, no noise, no smell, and obviously creating more usable space on the boat. When I say all the attributes of an outboard engine, that means you'll be able to moor it, service it, fits onto the same bolt pattern. We also then have the added advantage of working with our boat companies to integrate it into the boat.
Very good.
Yes. Yep.
Balanced. Please.
Maybe you can say why we're showing that today, for us, it's a bit like the commitment on side-by-side. We want to say to the boating industry that we're serious about this and we're committed about this, it's creating, obviously, a goal for the team in the Marine Group. At the same time, now we can talk to dealers who are not sure if they want to work with Alumacraft and us or whatever, and have something is coming. For competitive reasons, we don't intend to say more than that for the time being.
My understanding is that the boating industry is a low CapEx business, but also thinner margin. I would be curious if you gonna make huge CapEx over the next five, 10 years in comparison to the rest of the boating industry. Would you expect margins to expand progressively and maybe to reach your own capital of that business in the coming years with the powersport eventually?
Well, I wouldn't say we have to make huge CapEx. The nice thing about both of the boat companies we bought thus far is that they've got the kind of geographical footprint that we can expand with reasonable CapEx. I think over time, yes, we would think our expertise, our synergy, our leverage is going to help expand margins.
The other thing, Benoit, when you look at the project goals, there is a lot of value in this. When you give that real estate in the back of a boat, there is a lot of value. Now, it's too early, but we believe we can improve the margin there in time.
With this strategy, in some ways, you're telling your current engine suppliers that you're not part of our future, which is part of the risk of going from A to B. How have they received this message? Is there a transition period where you actually could see your volumes dip before they recover in this area?
Yes. Within the boat companies, the engine companies that they do business with?
Right.
We have not shared this yet. This is not out there. In terms of as the announcement has been made, we have said to the dealers is that we are here to help our new boat company sell boats, and we believe that's part of offering consumers choice, and we want to work with all outboard engine companies. There have been a couple that don't look like they're going to want to do that, and so there could be a short-term impact of that as we go through this transition. We are pleasantly surprised, however, how many, and again, this is very early on, how many have raised their hand, how many we're having productive conversations with. Which gives us some confidence that this transition period won't be long.
The other thing, Craig, even if that new, let's call it the ghost platform, that do not eliminate the G2. The G2 will be still out there, and some boat, with the traditional boat could stay there. That's not totally eliminating what we're doing today.
Thank you. Thank you, Guillaume. Next up is Bertrand for our sport group update.
Hello, everyone. I'm the new one, and very pleased to meet you. I heard that some of you wanted to know what I've done before. I'm going to try to summarize, but it's quite easy. I spend pretty much my time in BMW as well, mostly with one more company with different brands. You can see BMW, PAG, Premier Automotive Group, so I was deeply involved at some point with those luxury brands. Then I moved to distribution, was involved with distributing two large network. One called CFAO, which is mostly Europe and emerging markets, and recently based in Dubai with Al-Futtaim being one of the largest automotive distributor in the world, roughly selling 350,000 units.
I was lucky to live not so far from here in Detroit, U.S.A., for some years before, working a lot in the strategy office and finance company as well, based in Europe and Middle East and Africa. I've been living in Asia Pacific as well, nearly eight years, four years in Bangkok and the rest in Tokyo. I would say I have some global geographical experience, and now Canada, which is my new home. The presentation I'm going to make, as José said, I'm here only for six months, and we will be dealing with the business on a daily basis for four months, would be sharing with you what I'm considering as why we are so successful today, and maybe giving you a hint of what could be the growth pillar for the future for the Powersports organization. Summary is very simple.
José put it in a very simple way, and I'm the lucky guy with the green mark. The situation for us is simple. We are clearly leading in two key pillars, which is the snow and the watercraft. We are becoming a strong contender on the two others and doing tremendous progress in the side-by-side, both . We're a fast-growing challenger in this area. If you look at the geographical footprint, we're growing fast pretty much everywhere with very strong progress in our home base, which is the U.S.-Canada area. But even the other markets, they are growing at fast pace. This is a pretty good balance between the different geographical footprints. The four elements behind this growth, if you would like to summarize it, and that's more effective, of course, I share it with José.
What I will call diversification, I'll come back on it in one minute. Innovation, which is clearly our DNA, strong distribution network and manufacturing footprint. If you take the first one, I'm sure you're familiar with some of our competitors, we're pretty lucky because we have a pretty well balanced. We have a balanced portfolio between product which are able to be sold year-round and the one which are seasonal. We're growing in the back area with a lot of accessories, that's making us quite well-balanced in those different areas. We have a geographical footprint where international business is growing. Of course, we are enjoying a very good economy right now. The reality is, if anything happens to the North American economy, we still have a strong footprint in international, and we won't appreciate.
The last element from the manufacturing footprint, we have a combination of very mature and very technologically advanced manufacturing footprints, which are our historical footprint in Canada and of course in Austria. We have a second area where we are clearly developing our future growth, which here is Mexico, where we are developing and producing much more. Of course, the cost base is much lower. Now, if we look at the product innovation, I think there is three areas I'd like to cover. We have been investing in a very consistent way across the years, that's giving us a fantastic situation in terms of product innovation. The benefit are extremely simple. The first benefit is we are being able to create sub-segments. I would say the best example is the Spark Trixx. Nobody was thinking about using a watercraft in the way it's done.
Nowadays, it's becoming one of the best-selling machine in the industry in this area. The second element is the pace of the introduction is very fast because we have a lean and flexible production system. The combination of those two things create a situation where we are extremely connected to the customer, and we are able, at the end of the day, to have less discount and a better premium. From a profit perspective, it's very obvious. The last element, which is extremely important for us, Danny is in the room, we have an extremely strong design, and it's not us telling it's pretty much all the big rewards around the world. We're not talking about one or two, we are talking about 18. We are very well recognized for the quality of the design and the innovation.
The third elements, talking about dealers, I'm sure you have been facing some of our friends and competitors saying we have a very good dealer value proposition. I don't want to make a game of the beauty contest here. I'm going to say very simply that if you look at the situation, we are able to attract tier 1 dealers and to do it in a very good way around the globe. If you look at places like USA, we have been growing by 21% from a distribution network perspective with very strong company. Same in China, where we are clearly leading the markets of powersports in this country. You know the size of China with 1.3 billion people. In Brazil, same situation.
I think the last element, which is showing how strong we are from a value proposition, Sandy will cover it in a lot of details. We have decided because it's a substantial future, big markets for us to go direct in Russia. In this exercise, all the dealer came on board and we lost no one. They were extremely happy to sign with us. Manufacturing footprint. Again, why Valcourt and Gunskirchen, which is the engine, are so important to us? They are the technological hub and heart of our company. We need to keep those hub for the future because they are really the place where we can develop not only the technique itself, but the people who are going to run the company somewhere else in the world.
If Mexico has been such a success for us, it's because we have those two hubs where we have been able to take people and transfer this knowhow and to teach and train the people locally. Now we have this well-balanced organization where we have those hubs. Even with higher labor cost, we continue to develop those hubs. Valcourt 2020 is the last example where we are bringing the latest technology. We can basically support the growth here. The second element with those three Mexican sites is we have a lot of flexibility, and we need it because you saw the growth. I heard the question, do you have the capability to grow without big CapEx? We are in a situation today where in Mexico, just to show you, we have been growing by 30% for the year we are living.
For next year, we're assuming that we can still be growing by 50% without massive investment. Because the site has been designed by the people who did it in Juárez 2 for the side-by-side business in a way that we can expand it without having to build and create the new plant. The new plant is, of course, a lot of money. The site is flexible enough, and you have a picture of the way it was designed originally. We add pieces, but we still have room for this growth. That's extremely important for keeping up with the momentum. Now, going forward, I will not give you the full strategy because I don't think it's finished yet, but I would just highlight 3 elements. The first one is side-by-side linked to the 3 wheels you have just seen with Josée Perreault.
The second one, I just mentioned it, how we are going to go further with international markets and further diversification. The third one, some of the elements presented by Anne-Marie, were showing why it's so important for us, Sandy will cover the other points. I'm coming back to those 3 points. The first one, the side-by-side, is extremely simple. We have been growing between 2015 to 2018 by 66%. It's the fastest growth in the industry. In reality, if you look at our performance, it's very simple. We have the yellow line here, especially in this area in utility, we still have a runway ahead of us. With the quality of the product we're bringing, there is no reason why we cannot grow to a bigger number.
I'm not going to give you any number today, but you can imagine that we are not going to be shy. The second one, in term of international diversification. There is, we believe, three markets which are important for our growth. All are important, of course, but those three one are extremely important. Russia, China, and Brazil. The Russian market is probably the only big snow market where today we can say the volume is not what it could be. That's why we're going direct. There is clearly an ATV business as well there. We are definitely going direct in Russia to expand these markets. The second one, we are already a market leader, and we are very happy with that. The team has done a very good job. Again, we're still in small numbers in a 1.3 billion people markets.
We really need to adapt the way we're making business to be compatible with this territory, which is in many ways very unique. We are definitely going to focus our energy on this. In Brazil is recovering, even if it's still fragile, and it's a big business for Sea-Doo, sorry, and we are growing and growing extremely fast. The third element, that's probably the combination of the three elements I was mentioning before. We want to be effective in keeping our customer, because attracting new customer without being able to retain them is extremely expensive. Anne-Marie with her digital frame was showing that very well.
The first one, product and accessories, we are in a situation where today I think we are ticking them off in a good way, and we want to continue to do it, really being able to tailor product to aspiration. The second one is how we are going to treat physically the people visiting our dealerships. What's the customer experience when you visit one of our dealers? Not only for the sales experience, but the service experience. We used to sell small product. We are now selling things which are nearly as big as a car. When you look at the Maverick X3 MAX, it's a huge product. We clearly need to adapt our organization to that.
The third one, I think, was very well covered with Anne-Marie, is how we are going to create the relationship from a digital perspective with the customer to be first more connected to the people, having a more cost-effective approach with them. I think she said that in a very good way, I'm not going to come back on this point. Summary, again, you have to forgive me, it's only a few months. I think we have a very strong momentum based on a very strong foundation. We have further opportunity. The last point I'd like to make, it's probably a little bit more personal. Great company and great growth are built not only on assets, but they are built on people.
If I compare the people inside BRP from the company I'm coming from, especially the big automakers, I can't see any big difference in term of talent pool. We really have the talent pool to be able to grow and to go further because it's really everywhere, not only in the engineering side. You have a huge quantity of young and energetic people, and I believe you have seen some of those people on stage last night. That's what I wanted to share with you today. Any question?
The powersports industry can get competitive and discounts can, especially as capacity growth can become an issue. How do you intend to manage that if you're taking share from competitors who don't really want to give that up?
I think there's two questions in. First, you're right. This thing will definitely increase. If we take side-by-side as an example where we definitely We have challenges there, we know we are going to become more aggressive and we are going to create reaction. I don't think our competition is going to be shy of those kind of attitudes. There is a risk that we are going to be forced to be more aggressive. Aggressive doesn't mean always discount. There is different way to be aggressive. I think the best answer is the fact that we believe we are able to create more targeted and more segmented products, they are more relevant to our customer, and we see that already.
The second thing is the strategy from a digital perspective Anne-Marie is putting in place allow us to basically, on a pretty basis, be more cost effective. That will give us more runway to be aggressive. Of course, if we enter lower segments from a percentage perspective, margin wise, we have a risk to maybe go a little bit lower. It's still very high margin, I don't think it's a big issue for us.
Any other question?
Thank you.
Thanks, Bertrand. Next up is Sandy.
Morning, everyone. I think I have the easiest portion. As you look at the results so far, it's very solid results everywhere. Most of the regions are double digits. North America being the biggest pie, obviously, this is where the focus is. Looking at Latin America and Asia Pacific at 27% and 18% respectively, is pretty strong. This is largely driven by side-by-side, also the watercraft season has been phenomenal so far. This is for H1. Obviously for EMEA, what's not there is that we actually ran out of snowmobiles at the end of the season only because the winter was also great in Scandinavia. If you put that back into EMEA, it would probably be double digits as well. Phenomenal momentum as we speak. If we zoom into North America, this is not only about solid economics in North America.
Clearly, there's a contrast between our performance and what's happening with our competitors. When you look at side-by-side, mid-single-digit growth for the competitors and mid-30s for BRP tells a lot. I'll go back to side-by-side in a couple of slides, showing you the opportunities in a little bit more details. ATV, in a slowing down industry, we are actually gaining momentum, so getting market share there as well. We're still the leaders in the top CC segment, and we're fast growing in the mid CC segment for ATV. We're actually been growing in the past 4 years significantly in that entry level segment. For watercraft, it's largely driven by the new platform we launched last year. Trixx has been surprising us all the way, so a huge increases there as well.
The watercraft, especially with the combination of Mother Nature cooperating this year pretty much everywhere on the planet. Some of our dealers actually ran out of product in June from the new platform. It tells you about the attractiveness of our product line-up for watercraft. For snowmobile, obviously right now we're in off-season, the foundation for this fall and this winter are solid. We finished with relatively low level of inventories as compared to the year before. We also had a phenomenal spring break, I think the bases are very solid for snowmobile going forward for the next couple of quarters. In terms of international, the highlights here is simple. China is leading the pack. China has been growing 40%-50% year-over-year for the last three to four years. Great momentum there. As Bertrand said, Brazil is recovering with a vengeance.
Watercraft business in Brazil has been really good for us. They're a temperamental market. They're even retail units off-season during their winter or our summer. There's also Mexico. We can't forget Mexico is driving a lot of growth with the side-by-side business. We believe that we present a fair amount of share in Mexico. With that being said, again, side-by-side is most of the driving force, Watercraft as well throughout the world has been really good. A word on EMEA. A couple of things are happening in the EMEA. The ORV industry is actually softening a little bit, and the reasons behind it has went through in the last couple of years, a huge transition in terms of obligations. As you may know or may not know, in Europe, mainly ATVs and side-by-sides can actually go on-road.
European authorities in 2016 changed the dynamics, so noise regulations, speed regulations. We actually right now have the only ATV lineup with ABS that can go over 40 kilometers an hour. There's been some consolidation from the OEMs in terms of which strategy to choose. We believe we have one of the best strategies in Europe to go forward. If we look at the lineup and what's relevant for the next waves of growth, obviously, we've launched the Maverick Sport 60-inch this spring. This was kind of expected from our network that we went to the max version. Just to give you an idea, in a very short time, we were able to grow our market share significantly in the sports segment.
We believe that the aging platforms that exist from our competitors allows us to go more rapidly into this segment relative to the other segments. We're doing extremely good with the Maverick Trail and the Maverick Sport category. This is one of the recipes that we're pretty good at as well as creating some specialty packages, top of the line, great margins for dealers, great margins for us as well. The continuation of applying the XRC package in the Maverick Sport segment we launched last night, the XMR as well in the Maverick Sport segment, and not to forget the Defender MAX XMR. This will be very popular units in our network. Lastly, to be able to hit the $10,000 less mark, especially in the U.S., we came up with the 6x6 with DPS and the 450 engine.
If you look at a little bit of the history, also in terms of industry volumes, obviously we're looking at the Rec Sport 60-inch and the Rec Sport 64-inch mid-HP. Those were areas where we had some gaps in the lineup. Talked about what we launched this spring with the 60-inch, now what you saw yesterday is actually filling some of the holes in these categories. We're better equipped to go faster and more aggressively within these segments. Also in terms of the Rec Sport 64-inch plus top-HP, we're doing extremely well in the high-end category. We know we have to go more aggressive and more of the base entry levels of that category. As you probably know, we've been ramping up production capacity. We've been a little bit behind demand in terms of supply.
The dealers are actually focusing on the high end because they just can't get what they need through the whole lineup. As we get more capacity starting this November and then in February, then ramp it up faster, we'll be able to fill these holes much rapidly and the dealers will be able to commit on these segments as well. Really interesting dynamics right now. Zooming in through the utility segment, I just talked about the sports segment. Bertrand showed the runway we have in front of us. With the momentum we're having right now and the capacity that's going to be able to follow demand, we believe this is going to be a very interesting next, at least a year and a half, two years.
Look at the five top states in the U.S. for utility, Texas being by far the biggest opportunity we have. Minnesota, Wisconsin, Michigan, and Florida. Just to say that in the last year, we've been focusing on Texas. Anne-Marie talked about lasering into a market and really mobilizing the dealers and the retail ops team with the marketing teams. In the last years, this is the result of what we say we're able to do in Texas, +65%. It gives you an idea. We have the recipe in our hands right now. When we want to focus on a market, the results follow automatically. Really happy with what the team has put forward and the momentum we're having, and you can expect more focus in these states in the coming months. Switching to Watercraft. Obviously, the FishPro is, in my view, a hidden gem.
Even dealers I talked to yesterday are just realizing, how come we didn't think of this earlier? This is already a trend in North America, but it's a lifestyle already in some of the countries like South Africa or
New Zealand.
The New Zealand, sorry about that. We believe that with what we're seeing from New Zealand specifically, because the volumes are much larger there, if this trend continues in North America, this could be much bigger than a lot of people think. In terms of the accessories is a concern. Last year when we launched a new platform, we included the LinQ system and everything around the new platform, and we've had phenomenal success with that. This is a continuation on the Spark platform, obviously with the Trixx. Don't forget, there's about 100,000 units of these in the market right now. This is all retrofittable, so this is quite interesting, but also more focus from our teams on the rental business, which has not been a focus in the past.
We have a unit that is purpose-built for the rental business, so we're going to go aggressively on that segment as well. As I said earlier, in terms of the success we've had in the accessory area in the last three years, we've grown the dollars per unit. That's fleet neutralized dollars per unit by 24%. You add the fleet that's increasing, so it adds up pretty quickly. This is an example of what we've been able to apply to the Spark platform as we did to the last year's new platform in Watercraft. None of this would have been possible if it wasn't with the support of our network. José talked about it a little bit earlier. Dealer value proposition for us is key. The network is one of our most important assets we have. We have a recipe in place.
It's an ecosystem of a lot of elements I won't go into right now. Just to give you proof that that ecosystem and strategy is paying off big time. When you look at the side-by-side growth in multi-line dealers versus single line BRP dealers, we're actually growing twice as fast when we have competitors beside us. This is quite telling. With all the dealers we've added in the network in the last couple of years, the number of units per dealer actually increased as well. Another proof that we've got our fingers on the dial in terms of the dealer value proposition. In terms of engagement, we're one of the lowest OEMs in terms of churn, so losing dealers over time. We just won this year or ranked the number one UTV Mystery Shopper Survey in terms of customer satisfaction for the BRP brand.
This is really rewarding. That's all I have. Any questions for Sandy?
Can you talk about the broader SSV demand environment when you look at the ag buy, the oil patch, and then everything excluding those?
Obviously, we see right now a lot of growth in our utility markets. For us, this is really important. You need to understand that it's still relatively new for the BRP dealers to focus on the utility market, whether it's utility, whether it's oil and gas and so on. A good portion of our network is with part of our competitors, so we are making a lot of inroads in there, and the quality of our products is also showing big time when you're competing with the others. Obviously, the perspective we have right now is quite encouraging. The economies are strong pretty much everywhere. It's our focus in Australia as an example. It's purely Defender because you cannot ride with the X3 on public land in Australia. You can ride with the Watercraft and the four by four, but not with the X3.
It's mostly farmers and utility. The teams are actually mobilizing the network to be able to twist their business model to be more focused on that section or that part of the business. Now that we have our lineups in our hand, we can go more aggressively. Does that answer your question?
Yes.
Mark.
I'm not sure if this is a question for you or who, but could you just talk about the leasing program that was talked about last night?
Yeah.
What that means, how material a change that is, what that means for the dealer economics and also for BRP?
It changes a lot of the dynamics and it's surprisingly nobody or very few players in the powersports business actually ever launched leasing. BMW is certainly one of them, and they apply it in Europe very successfully. In North America, it's basically unheard of. This is not a leasing program that the dealer is responsible for the repurchase of the unit. This is what you used to see in the auto industry. For us, this is about accelerating the repurchase cycle. As we've done financing for years and years, and the terms go from 48-60 months to 72-84 months, we're keeping these people out of the market. With leasing, we'll be able to accelerate that repurchase and pump more volume, and then also create more volume for the used market.
For us, this is a big move and it's really exciting, and the dealers see that as well.
We have a slide in Josée Perreault presentation about this. The other comment may be all our product, except Spyder or the three-wheel vehicle now is off-road. When you use a product off-road, you can abuse and it's very difficult to fix a residual value. That's why for us, the three-wheeled vehicle segment or category was the best to start, because this is an area where we have scheduled maintenance for the consumer in BRP-certified dealer to make sure that when the customer brings back the vehicle, it's well-maintained. We have a slide we'll show you in a few minutes.
Just one quick one. Could you talk about the future of the Commander right now, given the lineup that you've been able to put in place over the last few years?
The Commander is actually stabilized in terms of volume. It's actually doing good. Obviously, we won't share anything about the future products. For now, we're happy with what the Commander is delivering.
Joseph Dubuc, you're coming on the lease here, it makes sense on the three wheels first.
Yep.
What about that contemplated on the marine side or?
To be honest, well, let's see. We've been able to define guidelines for maintenance and everything on the on-road product, which is the easiest. We'll see how it goes. If it goes well and our partner wants to continue, we could expand, but let's see what it will give on the road first, as a beginning.
Will we see that repurchase commitment for these leases show up in any way on the balance sheet?
It's going to be an off-balance-sheet commitment. Disclosure on the financial statements, obviously, if there were any changes to the residual value expectation versus the initial contract, then you might have a liability pop up. For now, it's going to be a disclosure requirement.
Do you know what the underlying assumptions might be in terms of the year?
We're looking at residual value in the range of, let's say, 45%-50%. That's what we're looking at. That would be the type of commitment. Obviously, we've ran some models as to what could be the take rate on it. Could the contingent liability go as high as CAD 100 million? Yes. Again, that would mean that we have a very good business on the Spyder side. That would be positive. Again, the secret is managing those residual values and managing the closing process of the lease when the consumer returns the lease to make sure that there is a proper inspection done and if there are any flaws in the vehicle or damage that was done, that we highlight those and get compensated then accordingly.
One more question. Thank you, Sandy. Next one is Josée Perreault.
Good morning. 10 years ago, we reinvented this three-wheeled business with the launch of Spyder, and today we're in a position where we're saying we're reimagining it. To reimagine the three-wheeled business, we need to address two key things that will increase the accessibility of new riders to the three-wheeled category. That's, first of all, the accessibility to get a three-wheel license, and secondly, address pricing. Pricing is still the number one barrier, and this time we decided to address it in all angles. We hinted to it last night in the reveal. There's a few things that we're going to address, and this morning we met with all the dealers during the business meeting. Basically what we told them is that we are right now putting everything on the table.
In the spirit of GSP's visit last night, the gloves are off, and we're really ready to fight for the success of the three-wheeled business. The four points that we're going to be addressing in the plan starting now or season 19 is, first of all, expand the rider education program, reprice RT and F3, introduce the first leasing program, and obviously the introduction of Ryker. We'll go over these four points during the presentation today. Rider education, just to put everybody into context, basically, we are taking two-wheel riding independent schools in the U.S. and implementing a three-wheel rider education curriculum that will allow consumers or new entrants into that market to get their license to drive. Okay. When we started that in Florida about two years and a half ago, we discovered that there was one school in Florida that offered three-wheel rider education.
We looked beyond that into seven key states as the plan last year, still there was nobody offering that. This year, starting in February, we put a dedicated team, and their only job was to go and open schools that would offer three-wheel rider education. We've been very successful. If you look at the U.S., by the year-end, we'll have 150 schools open. Today, we have about 142. The coverage of the U.S., in terms of last year when we left at Christmas, we had seven states, and by year-end this year, we'll have 42 states. In terms of Canada, we know that the benchmark and the golden state or province was Québec. Okay. It started all with Québec, 119 schools in Québec, but there was nothing in the rest of Canada.
Our goal was to mimic what we did in Canada, in the U.S., and start opening in the rest of Canada. As we open schools, basically we're registering and we're giving license to more people. This gives you an idea, since February, about 8,000 people signed up to take the class. Out of those 8,000 people, 5,000 people since February already have their license. That's 5,000 people more than last year that are capable and legally riding a three-wheel. Okay. Of these 5,000, over 15% have converted to a Spyder. Okay. The profile of the 8,000 people taking the class, there's two important nuggets there. First of all, it's the gender split. Over 30% of these people are women, and if you compare to the motorcycle industry, the gender split is 15/85. We believe we have something strong there. Okay.
Secondly, of the people, again, the 5,000 people who got their license, 45% are saying that they're really interested in purchasing a 3-wheel, but it was too expensive. Now we have Ryker. For us, these are very important nuggets that we're going to attack with the launch of Ryker. Repricing. We had to address three things. First of all, over the last two years, we were discounting heavily, and that's never good for the brand equity. Secondly, when we introduced our Spyder F3 a few years ago, we realized that we probably priced it too aggressively, and we needed to address it. Thirdly, as we introduce Ryker, we are now in a position to introduce a good, better, best pricing strategy. As we looked at the whole pricing ladder between Ryker and our seat, it was not very smooth.
We did address the pricing according to a better transition in upgrades of pricing. Overall, the price difference or the weighted average price decrease is around CAD 2,500. We are decreasing the price more on F3 because we had alignment issues with the TVL product versus our seat. If you look at versus the discount we were giving over the last few years and the price decrease that we've announced today to the dealers, it's about CAD 800 per product, the difference. Okay. Leasing. Very, very important for us. First of all, in the U.S., it's critical that we advertise the monthly payment. It is monthly payments that attract consumers to the product. With leasing, it allows us to advertise CAD 149 a month, which is huge for us and huge for the dealers.
Secondly, if you look at the financial terms of a Spyder owner, right now, it's 69 months. With these things, we will reduce the ownership period either from 24 to 36 to 48 months, which, like Sandy alluded to, will accelerate the repurchasing cycle. That's the story about leasing. It's launched in the U.S. as of now only. Canada, we're looking into it, but it's not launched yet. Ryker. As we launch Ryker, there's a lot of stats out there that are showing us that the market is ripe for the introduction of Ryker. First of all, if you look on the 3-wheel side, on the Spyder side, 63% of our total registering sales were used units, and the average price that people were paying for Spyder was CAD 13,500. Consumers were willing to purchase back up to model year '11 to get a good deal.
Then we put the parallel to what happened with Sea-Doo and Spark. When Spark was introduced into Sea-Doo, used units were 66%, and we have the business increase of what Spark did to Sea-Doo, and I believe José and I have discussed that a lot in the last year or so. This is the baby. Hopefully, you enjoyed riding Ryker this morning. Ryker is not a Spyder because Ryker is a different ride for a different rider. Okay. We are obviously doing two parallels with Spark because, first of all, Ryker is for 3-wheel what Spark for Sea-Doo. It's a fun product like Spark is. Ryker is totally a blast to ride. Hopefully, you'll concur with me. Secondly, Spark did propel the Sea-Doo business, and we know that Ryker should propel the 3-wheel business as well.
If I go back to the features and the technology behind Ryker, hopefully, you had a chance to witness this this morning, it's jam-packed of cool and high-end technological features that make the product super high-end for the price. It is not a cheap product. You saw it last night. You saw it this morning. It's easy to ride. It's awesome. There's two engine options of a 600 or an 800, the CVT transmission, highly durable drive shaft like high-end motorcycles, customization, UFit. That's only just to name a few. We know that for that price of CAD 8,500, it's loaded of benefits. Okay. Our riders. Our riders are different than our current Spyder riders. You know that the current Spyder riders is, on average, a white male that's 62 years old. There's two types of riders for Rykers. We call him Connected Carlo.
Connected Carlo is between 30 and 40 years old. He is a bit younger, a bit more diverse in terms of ethnicities. Also, Connected Carlo is not new to powersport. In his youth, he's probably driven an ATV, he's probably ridden a snowmobile or a Sea-Doo. That's one part of the ridership. Second part is On the Move Greg and On the Move Margo. These are a bit older. Okay. It's a couple, they're older, 40 to 50 years old. Greg loves to ride, but most importantly, Margo is used to riding on the back of the bike. Now she wants her own ride. Okay. When we said initially that 30% of our people signing up for classes are women, this is Margo. If you look at addressable market and market size, of people having the intent of buying a three-wheel over CAD 15,000 in the U.S., it's 4.8 million.
If you do that same research for people having the intention to look and buy a three-wheel below CAD 15,000, that's 8.6 million. For a total addressable market of 13.4 million. Okay. About 2.8 times the size of the actual market. We feel good about the addressable market, and that's why when José did that, our business in the next 5 years, we hope to triple it. That's one reason why. If you look at the go-to-market for Ryker, we are trying to address the shopping trends or the retail trends going on. We all know that it starts with the phone. 83% of people start their shopping experience with the phone. Technology is at the forefront of the retail experience, and AR, augmented reality, is the most engaging technology right now. Product customization is the new norm.
71% of the people who are willing to pay more to customize their product. Lastly, a good retailer is the one who is obsessing on retail experience. For Ryker, our team has tried to address all four points in a comprehensive go-to-market plan. I'm only going to address a few things here, but trust me, we have a bigger plan that we can't cover today. It starts with the personalization or customization of Ryker. Like José mentioned yesterday, one platform, three SKUs, and 75,000 ways to customize a product. Okay. That's critical. Our plan is to put really customization at the heart of the experience in terms of the phone and also in terms of the dealership. To be at the forefront of where our consumers are shopping, which is in the phone, we're introducing the new Can-Am Ryker app.
The Ryker app is based on augmented reality, it allows you to personalize your bike and see it on augmented reality, either in your garage, living room, kitchen. We hope that that first touchpoint with the product will push the consumers into the dealership. We talk a lot about online shopping, but we know that 90% of people still finish their shopping journey in our dealership. For us, what we've done is that we've established a new Ryker Design Lab to allow the consumer to finish that customization process in the dealership. There's also a sensor stage of technology there. There's a touch screen in the middle, where people will be able to customize their bike on the touch screen, then take the panels and design their bike to have the last touch and feel of the product. That's basically what we're doing.
Again, I'm saying that we're doing way more. The launch is in three phases. Right now, Expo. Over the next three, four months, we're going to have a heavy PR campaign. We're going to obviously launch the app, also address every people that took the rider education class and did not convert. We call them the low-hanging fruit, and we believe that's the first point we need to address. Lastly, this is in February. It's the time where we're doubling down on marketing investment, and we're making a lot of noise. We believe that we've put everything on the table. Truly, the gloves are off, and we feel very confident on the success of the 3-wheel category. That's it for me.
Any concern about the cannibalization of your existing Spyder lines?
We believe it's a different rider and a different ride. F3, RT are more long distances ride. I don't know if you tested it this morning, but it's for really shorter rides. It's like we don't feel that the guy or the girl who's going to be on a Ryker is going to go riding 500 kilometers a weekend. That being said, there might be a few cannibalization with the baseline of the F3, but not the F3 Limited or the RT.
Maybe if I can. When we've introduced the Spark, it was the same thing. I don't think there is much cannibalization on the new product, but on the used, there will be some adjustment. It'll be probably a 12 to 18 months transition.
When do the shipments start for that?
In the first half of December.
December?
Yep.
Have you changed any of the manufacturing process for the Spyders to help offset a lower retail price?
No.
Well, it's going to be manufactured in Mexico.
No.
No, no.
It's going to be the same Spyder.
We'll be reducing the price.
Okay.
No.
Okay. One more thing. Just that 15% conversion figure that you mentioned for rider education. Is that what you're actually seeing, or is there any reason to think that that would see difference or change moving forward?
This is actually what we're seeing.
That's what you're expecting?
We hope to improve that considerably.
Yeah. How many dealers do we have selling the Spyder right now? I'm just wondering what would you expect in terms of the dealership network, you'll be asking some dealers to invest.
It could be probably a key catalyst also for develop other Spyder and Ryker dealers.
Right now, in North America, we have close to 500 dealers currently set up selling Spyders.
Okay.
Honestly, I don't expect that we're going to have a big drop-off rate in terms of putting a mandatory investment. Just to be clear, we're saying to all our dealers, "If you want Ryker, you need to invest in the Ryker Design Lab," customization is really at the heart of the product, if you can't offer the customization in your dealers, you're not offering the proper experience with Ryker. Look, it's really hard to say, but right now, with what I saw last night, what I heard this morning, there's a lot of excitement. There's a lot of people we've heard that don't even sell Spyder right now, they're asking about it, maybe it's going to be net neutral.
Do you know how many dealers is this profit? Let's say you currently have 500, I assume that some will be asking to distribute this product.
Yeah, honestly, I have zero idea.
To be honest, Benoit, if we lose some, probably we don't want those.
Yeah.
It's probably a good thing, you have opportunity to sign up dealers in the area.
Yeah.
How much sales do you need to do on this platform to earn your return on investment hurdles of the company?
The volume is not so high. Yes, it's an important investment, but we're leveraging already the engine that was developed for other platforms, so it's a vehicle development. The break-even point is not too significant. We could achieve that break-even point after two years of selling in terms of overall volume.
Yes.
What's the Ryker Design Lab square footage requirement per dealer?
It's about 200 sq ft. It's just currently in their BRP platform.
Okay.
What's the dollar investment per dealer?
It's $9,000 in the U.S., we are offering it with the C-
TCF.
TCF, thank you. It's CAD 500 a month for the next 18 months.
It's financed through the floor plan partner we have, which is all they provide, the financing. Zero interest.
It's fully serviced. I mean, with the company that-
It's turnkey solution. That means they sign up, we show them, we show at their dealers, we install everything, we have the maintenance of the Design Lab.
What is the average selling price you expect dealers to sell the Ryker? If you do a parallel with the Spark you work in-
You mean the mix?
You listed at CAD 4,999. I don't know. I think the average price was CAD 2,000 higher with all the accessories. I'm just curious to know what type of accessories you could put on that, and where is the Spark right now since the launch in terms of average sell price?
Maybe I'll take the Spark question. Obviously, with the introduction of the Trixx, we saw margins improve quite a bit on the Spark platform. You saw at least 300-400 basis point improvement in margin because of the Trixx. The Trixx is 50% of the volume of Spark is Trixx. That brought margins up quite significantly. The mix that we were forecasting on Ryker
We have bets going.
We have bets going on.
We have, I think it's.
Go ahead.
A high percentage on the 900cc engine and a lower than 30% is.
When we look at the mix, the biggest part of the mix was mostly on the 900. As we are hearing the comments, we're thinking that we probably are going to see a higher proportion on the Rally and less around the 600, which is great. Like you say, I have a bet with my boss, and I have a bet with my team.
You're flexible, right? [inaudible]
Minimum change.
Any other question?
The beauty of the Ryker is the three SKUs reduces complexity a lot for the dealer. There's not 15 SKUs he needs to order, and he's betting on making sure he has the right SKU. He only has to determine the mix on three SKUs. That's a big advantage as well.
The other thing maybe, too, we said it on stage yesterday, when we say defining a new business model, three SKU, 75,000 way of customizing. We can change a lot of accessories in the future, but keep the three basic SKU, at least for a period of time, no change. It's very simple for the dealers, very simple for us. If we can be successful with the design lab and everything, there is maybe a new business model there.
Yeah.
The price reduction of CAD 1,500 that you're taking on average, is this on the new shipments or is it on the existing inventory?
It's gonna be on the season 19 product, we are also gonna price protect everything that was in the inventory right now. As we launch the new units, we're gonna have to price protect the inventory back in the dealership. That means that we're gonna have to double down on the discounts so to make sure that our dealers are not losing profit.
All in our guideline.
I just want to find what that
In the U.S., it's going to be a $5,500 advertised discount.
That's all factored in our guidance. It's all built into our projections for this year. Obviously, before we launched this repricing, we knew the inventory we had in the field, model year 2018, model year 2017. We already had important discounts for non-current models. That's been all adjusted for in our guidance.
Just to make sure you get it right then, the average price reduction is CAD 2,500, but net to us after discount and everything, we estimated CAD 800 per unit going forward.
F3.
RT.
Just again, to clarify that, the average is CAD 2,500 incremental net.
No. When we launched the F3, we made a mistake and you know you do PV, what you compare with the competing product, and we probably priced it too high from the get-go. The RT was reduced a bit, but the main reduction came from the F3. We saw in the last few years that F3, at the minute that the non-current, at the end of a season, a program happened, you can see the retail increasing significantly. At the end of the day, we said that we better to readjust the pricing. The average readjustment is CAD 2,500, but net to us after discount, it's about CAD 800.
So less than-
We should have a less discount going forward with the readjustment. That's the point. Yep.
Can you just give us a relative sense of the profitability by Ryker and the various Spyder products after all this pricing is sorted out?
Yeah. Obviously, similar to when we introduced the Spark, Ryker is an entry-level product, and therefore margins are slightly lower than on the traditional Spyder product line. When you look at the overall impact on bottom line that Ryker generates, it's obviously favorable. The plan with Ryker, as we had it with Spark, is while can there be availability to upsell the consumers. When you come out with models like the Rally, then the Rally gets much closer to a traditional Spyder, and then with the accessorization. Don't forget, the flexibility with accessorization today is you'll have people buying two sets of panels. I'll buy a blue, and I'll buy a green. I'll buy the red and white. That's another element where it's going to be driving additional margin as well.
Slightly lower, when you factor in all the customization and accessory business that you could sell with it, but still very profitable to us.
I would encourage you that you download the apps during the next few days, and you will see how competitive our accessories is priced. We believe some people will change panel every year, just to give it a different flavor.
Just for broader context, how does Spyder compare today to the rest of year-round?
I'll split it in two. On the contribution margin, so we'll take the selling price, net the material cost and labor, Spyder is very competitive versus the other year-round products. Where we are investing more is obviously in marketing and in R&D, as the business is not necessarily to the scale that our other year-round product businesses are. With the target that we gave José to triple the business, well, obviously, that's going to bring profitability to the comparable level to what we have with Side-by-Side.
Just to follow up on that, I guess, what level of sales do you need to get with Spyder to bring the overall profitability level in line with the rest of your year-round products?
At doubling the Spyder business, we're going to be in line with the other.
Other segments.
year-round product businesses.
With respect to the global reveal, if we look at the Ryker, it will be available in the first half December. Talking to one dealer that focus also on RV, that it seems that when they do the global reveal, the products become available six days after, so they can receive all. Is there an opportunity for BRP to keep momentum and distribute the products more closer after the global reveal, or is there part of the strategy?
Each program is different. Obviously, there was a few challenges when we started the development of the Ryker, and the ideal timing would be you announce and you ship the day after. We did face a few challenges in this program, and we will be starting in December. We have a pilot run of about 300 units.
We have a pilot run in the first of October. In the meantime, Benoit, we're also going to be training. We have to train the whole pipeline of dealers on the new product because there's a lot to it. As of November, we're going to start deploying the retail environment, there's Ryker lab for when they receive the unit, they'll be ready to go.
Yep.
How will this roll out internationally outside of North America?
We're launching it in Europe at the Mondial de la Moto in Paris, October third and fourth. We are launching it in Asia, in their motor show in Australia in end of November, then in Japan in early next year.
Which fiscal quarter should we expect initial Ryker sales to hit here?
Q4. You'll see sales hitting in Q4, moderate sales, and Q1 is going to be a bigger quarter of next year.
Evenly, which quarter should be the largest?
Q1 should be the largest. Q4, you'll see some probably upward profit, let's say 30% of the model year volume could happen in Q4 because you're entering for the retail season, and then the big chunk is going to be in Q1, a bit like Spyder.
Thank you.
Thank you.
Thank you, José.
Maybe just as a closing, get to this slide today. As you can see, I just want to come back on this. We're very proud in the last few years. We have great momentum worldwide, and you can count on us to continue. It's a bit funny lately, we're meeting investors, and they are asking a lot of questions. When you finish your introduction of side-by-side, are you stopping there? We'll not. We will get to that. Never saw a BRP product pipeline so interesting and so exciting. You can count on us that we will continue to push the innovation and the technology. Again, some of you are asking when you will restate. The plan is probably at this time next year, we'll restate the 2020 Challenge with our long-term plan for probably the next five years. That's in a nutshell the message.
Thank you very much for coming. Always a pleasure. Wish you a good trip back home.