- BRP (TSX:DOO) is constructing a new facility in Mexico to keep up with increased demand for its off-road vehicles business
- After a brief dip following the onset of the COVID-19 pandemic, retail sales jumped up 35 per cent in May, when compared to the previous year’s corresponding period
- The new facility is expected to cost to C$185 million and will be located in the Mexican city of Juárez
- Construction is set to begin in the coming months and will be completed by the end of 2021
- BRP (DOO) is up 1.98 per cent and is trading at $59.04 per share
BRP (TSX:DOO) is constructing a new facility in Mexico to keep up with increased demand for its off-road vehicles business.
Specifically, the company has seen an increase in demand for its side-by-side vehicles, also known as utility terrain vehicles, over the last few years.
Despite sales being initially impacted at the onset of the COVID-19 pandemic, the surge in interest has now resumed, with retail sales jumping up 35 per cent in May, when compared to the previous year’s corresponding period.
The new facility is expected to cost to C$185 million and will be located in the Mexican city of Juárez. This brings the company’s expected capital expenditure for the new financial year to around $290 million.
Construction is set to begin in the coming months and will be completed by the end of 2021. This is the company’s third manufacturing facility in the region and the new project is expected to generate up to 1,000 permeant jobs.
José Boisjoli, President and CEO of BRP, believes the need for a new facility indicates the company’s strong recent performance and future growth potential.
“Despite the pandemic, demand for our products has remained strong, and even surpassed last year’s figures for the same period.
“Our continued innovation and steady growth in side-by-side vehicles make this additional capacity necessary to meet our goal of achieving 30 per cent market share,” he said.
It’s been a difficult few months for BRP with the COVID-19 pandemic playing havoc with global markets.
In the weeks following the onset of the pandemic, BRP’s share price fell almost 75 per cent, but has since staged a steady rebound and is currently trading at just 20 per cent lower than its pre-pandemic levels.
BRP (DOO) is up 1.98 per cent and is trading at $59.04 per share at 1:38pm EDT.
