Did the Catalyst kill Yamaha?

On 6/28/2023 Yamaha announces it will exit the snowmobile industry.

To preface this post, we do not have any insider information on this situation; it is all speculation.

Yesterday Yamaha dropped the bombshell news that they are exiting the snowmobile market in 2025. They did so with class and gave dealerships and customers a long window to get things in order and still another year to grab a new Yamaha before they are gone forever. It is sad to see a manufacturer leave the sport after producing some legendary machines for so long. Some are wondering why now, after so many years with Cat, we'll go over possible reasons.

How did Yamaha get here?

The main problem for Yamaha is they went all in on 4-stroke snowmobiles, abruptly cutting their 2-stroke line in the early 2000s. The upside was there with 4-strokes—more torque, longer lasting, less maintenance, and later on, big turbo horsepower. The problem is that a big part of the market wants lightweight 2-strokes, effectively turning them into a niche brand. Being a niche in a niche sport will not bode well over time. It wasn't for lack of trying; their machines were innovative and ahead of the time, and the market could not get past the weight, unlike the dirt bike and atv markets.  

The marriage with Arctic Cat

In 2014 Yamaha released the SR Viper manufactured by Arctic Cat in the pro cross chassis. It was the start of Yamaha's reliance on Arctic Cat and slowly winding its own manufactured line. Each year Yamaha models made in Japan slowly started to disappear, with 2023 being the last year of any 100% made Yamaha Snowmobile. We were worried when we saw the 2024 lineup of only Arctic Cat Chassis.

This setup allowed Yamaha to reduce R&D expenses and primarily worry about marketing and sales of the snowmobiles. Without it, Yamaha likely exits it much sooner than 2025.

Enter the Catalyst

Arctic Cat received a lot of flack from consumers for having the Procross chassis for so long. To stay relevant, they needed to update their chassis. A new generation of snowmobiles is costly to release. It means new tooling, re-training the factory workers, and marketing. The smaller the market share, the longer it takes to recoup the costs of a new chassis.

Arctic Cat moving to the Catalyst means that Yamaha's hand was likely forced. They either had to reinvest and sign a new contract with Arctic Cat or bow out. Yamaha is a public company, so how they operate is very clear.  

The number crunchers did the math, and the investment to stay in snowmobiling was too much. Was it too much risk, too long of a payoff? We'll only know if they tell us.  

There are a lot of factors involved:  

How much rework of the Catalyst chassis to fit the 998 turbos?

Arctic Cat was not owned by Textron when the partnership started. Did they want too much, making the snowmobile line unviable in Yamaha's eyes?

Does Arctic Cat see an opportunity to make more money by bringing the turbo 4-stroke in-house?

Did Yamaha's numbers dip, placing a return on a new lineup investment too far outside the acceptable range?

Did Yamaha not want to contribute to the creation of the Catalyst chassis?

Did Suzuki make an engine supply offer they couldn't refuse?

When Arctic Cat and Yamaha joined forces, the Procross was already being sold for two seasons and saw Yamaha production as extra units made. Textron would probably see it differently and want contributions in the form of more per unit or a large lump sum.

We will not know why Yamaha's snowmobile line became too costly, but it does align well with Cat moving to the Catalyst. Chances are it was not one reason but a combination of the reasons above.

Yamaha's Future In Snowmobiling

While Yamaha brand sleds are done after the 2025 season, there are still questions about supplying motors to Cat. All responses from Yamaha were non-committal on engine supply. It would make sense for Cat to utilize the 998 Turbo still as it is the most dominant hyper sled stock or tuned.  

If Cat moves on from Yamaha engines, it could return to the Turbo Suzuki and still be the fastest production sled. Yamaha could look elsewhere too. We don't see Ski-Doo touching it, as it would damage the Rotax brand, but Polaris could be a wild card. Again it will come down to math; how much would it decrease 850 Turbo sleds? Many Thundercat and Sidewinder riders jumped on the 850 Boost last year, so are bets are not likely at this time. Things can always shift, and those high horsepower riders may ultimately return to a 4-stroke turbo, opening the opportunity for Yamaha.

The consequences to the snowmobile industry

One of the biggest right off the bat is fewer snowmobile dealers. Some may move to Arctic Cat, Polaris, or Ski-Doo, but a portion will opt out of the sport of snowmobiling. The second is for Yamaha loyalists. They will have to move to a new brand.

The sports publications will lose advertising dollars. OEMs spend a lot on advertising and help keep our favorite magazines and sites running. The Yamaha dollars will disappear and not return as the other OEMs already run large advertisements.  

It does not help the outsider's view of the snowmobile industry. Any serious snowmobiler knows that Yamaha's commitment to snowmobiling was the bare minimum. Still, the average outsider doesn't know they outsourced their entire production to Arctic Cat, and that's dead last in market share. They see a big recognizable name leaving our sport and may scare investors from putting money into snowmobiling.

It's a sad time for the sport to lose a big name like Yamaha, but everyone knew it was coming. That did not help the shock factor, as it was like a bomb went off in the sport. Yamaha will be missed in so many ways that it will take years to feel the true effects. We can guarantee that Yamaha will not disappear from the trails cause those machines can run forever.