Golf Cart Market Analysis

Golf Cart Market Deep Dive – PESTLE, Porter, SWOT

The golf cart market has emerged as a significant sub-market of the broader transportation and leisure vehicle industry, backed by a combination of factors, including the rising popularity of golf as a leisure activity, the growing trend of electric vehicles, and the rising demand for efficient and environment-friendly transportation solutions in a wide range of applications. This has meant that golf carts are no longer confined to golf courses. They are increasingly being used in residential and commercial communities, tourist resorts, and industrial zones, thereby reflecting a shift in consumer preferences towards more sustainable and versatile transportation solutions. Moreover, with the entry of new players into the market and the launch of new products, the market is also witnessing a diversification of the products on offer, to suit the needs and preferences of a wide range of consumers. And this is presenting both opportunities and challenges to the industry.

PESTLE Analysis

• Political:
  In 2022, the golf cart market was influenced by many political factors, such as the government's regulations on electric vehicles. In the United States, for example, the government allocated about $ 7. 5 billion to build an electric vehicle charging network, indirectly promoting the golf cart market by promoting electric golf carts. In addition, the local governments of some states such as Florida and Arizona have issued golf cart policies to encourage golf carts to be used in cities, and more than 200 cities have issued special traffic regulations to facilitate the use of golf carts.
• Economic:
  The economy in 2022 showed a growing interest in leisure, with a 12 per cent rise in the purchase of vehicles for leisure pursuits. New golf-carts cost from five to fifteen thousand dollars, depending on the model and equipment. In addition, the unemployment rate in the United States was reported at 3.8 per cent, indicating a solid economic base, which facilitated the purchase of such leisure items as golf-carts.
• Social:
  In 2022, golf as a leisure activity was on the rise. Participation had risen 5% over the previous year. This increase in interest had created a demand for golf carts, particularly in retirement communities and golf resorts. Moreover, the trend towards a sustainable lifestyle had led to a preference for electric golf carts. Sales of electric golf carts accounted for 60% of all golf carts sold in the United States during the year.
• Technological:
  In 2022, the development of smart technology had a major impact on the golf cart industry. A large number of new golf carts were equipped with GPS and Bluetooth, greatly improving the driving experience. Lithium batteries have taken up half the market, with a longer lifespan and faster charging speed than lead-acid batteries.
• Legal:
  Legal restrictions on the golf cart market in 2022 were the safety standards set by the National Highway Traffic Safety Administration (NHTSA). They required that all golf carts sold in the U.S. meet certain safety requirements, which led to higher manufacturing costs. These manufacturers estimated that, in 2022, the cost of compliance was about $1,200 per unit, which had a significant impact on price strategies.
• Environmental:
  In 2022, the golf cart market was largely influenced by considerations of the environment, particularly in terms of emissions and overall economy. Electric golf carts, which emit no emissions in comparison to gasoline-powered models, saw a 25 percent increase in production. The Environmental Protection Agency (EPA) had calculated that the average golf cart emits approximately 1,500 pounds of carbon dioxide annually. This had a profound effect on both consumers and manufacturers, as they began to seek more environment-friendly options.

Porters Five Forces

• Threat of New Entrants:
  The golf cart industry has moderate entry barriers, including a substantial investment in manufacturing and distribution. There is a high degree of customer loyalty and brand recognition for established brands, which may discourage new entrants. The increasing popularity of golf carts and other utility vehicles may, however, attract new players looking to take advantage of this trend.
• Bargaining Power of Suppliers:
  The bargaining power of suppliers in the golf cart market is relatively low because of the availability of multiple suppliers of components such as batteries, tires, and electrical systems. The low cost of switching suppliers means that the bargaining power of suppliers is low. The availability of alternative materials and components further reduces the power of suppliers.
• Bargaining Power of Buyers:
  High - The buyers in the golf cart market have high bargaining power because of the large number of options and brands. It is easy for the buyer to compare prices and features, which leads to greater competition among the manufacturers. The emergence of e-commerce also gives the buyer a wider choice, which also increases its bargaining power.
• Threat of Substitutes:
  The threat of substitutes in the golf cart industry is moderate. The alternatives, bicycles, electric scooters and other forms of personal transportation, can be used to perform the same functions. However, the unique features and benefits of golf carts, especially in golf courses and in gated communities, limit the extent of the substitution. The special uses of golf carts help to maintain the industry’s position.
• Competitive Rivalry:
  Competition is high in the golf-cart market, with several established players competing for market share. Price, quality, innovation, and service are the key factors. A combination of large manufacturers and niche players has intensified competition, and there are frequent product launches and marketing campaigns to attract customers.

SWOT Analysis

• Strengths:
  • Growing popularity of golf as a leisure activity, increasing demand for golf carts.
  • Advancements in electric golf cart technology, leading to better performance and lower emissions.
  • Strong brand loyalty among established manufacturers, providing a competitive edge.
• Weaknesses:
  • High initial cost of electric golf carts compared to traditional gas-powered models.
  • Limited market penetration in regions where golf is less popular.
  • Dependence on seasonal demand, leading to fluctuating sales.
• Opportunities:
  • Expansion into new markets, including urban areas for personal transportation.
  • Increasing interest in eco-friendly transportation options, boosting electric golf cart sales.
  • Potential for partnerships with golf courses and resorts to enhance fleet sales.
• Threats:
  • Intense competition from alternative modes of transportation, such as e-bikes and scooters.
  • Economic downturns affecting discretionary spending on leisure activities.
  • Regulatory changes regarding emissions and safety standards impacting production.

The golf cart market will be driven by the rising popularity of golf and the advancement of electric technology. However, the high cost and the seasonality of the industry are the weaknesses of the market. Opportunities include urban areas and greening. Competition from other transport modes and macroeconomic factors are potential threats. The strategic focus on innovation and market expansion can increase the resilience and profitability of the industry.