This article is a couple of days old, but I had to share it here after reading it. I did a quick forum search and it looks like this hasn't been shared.
Polaris Hopes New Focus Will Rev Up Motorcycle Sales
7:00 am ET February 7, 2017 (Dow Jones) Print
By Bob Tita
The race for young riders is posing a major test to Polaris Industries Inc.'s motorcycle business after years of rapid growth.
The Minnesota-based maker of snowmobiles and all-terrain vehicles emerged in 2014 as a fierce competitor to industry leader Harley-Davidson Inc. for nostalgia-prone baby boomers who want to buy motorcycles made in America. Polaris's motorcycle revenue was $708.5 million last year, up from $146 million in 2011.
But retail sales of motorcycles industrywide in the U.S. fell 2.7% in 2016, forcing both companies to work harder to entice new riders. Last month, Polaris abruptly discontinued its money-losing Victory brand to focus on its Indian line and a niche-market, three-wheel motorcycle known as the Slingshot.
Polaris's 2016 motorcycles sales were up 1% from 2015. But with the loss of Victory, the company expects 2017 sales to be down at least 10%.
Launched in the late 1990s, Victory was Polaris's first attempt at building motorcycles. The line mostly featured midsize bikes with middle-of-the-road prices. Its sales shrank after the Indian brand hit the market in 2013, but its younger customer base remains key, especially as baby boomers age. Polaris must now convert Victory buyers into Indian riders, or risk losing them to Harley.
"The gap left by Victory is an opportunity for both companies to gain share," said Trevor Young, an equity analyst at investment firm Jefferies LLC.
From the early years of the 20th century, the Indian Motorcycle Manufacturing Co. and Harley were intense competitors in a U.S. motorcycle market popularized by barnstorming racers and daredevil exhibition riders. But Springfield, Mass.-based Indian went bankrupt in 1953.
In the decades that followed, several companies tried to revive the Indian name. Polaris bought the brand from a private-equity firm in 2011 and launched the line two years later. It emphasized Indian's heritage by developing a lineup of big, powerful bikes that feature fender skirts, whitewall tires and an Indian-head-shaped running light.
While the biggest Indian models sell for close to $30,000, the best-selling bike lately is the smaller Scout. At $8,999, the low-frills bike attracts young, urban riders.
"That hit right at the early 30s-type customer who's wanted to get into riding and had some disposable income," said Nick Schittone, general manager for an Indian dealership in Austin, Texas.
Motorcycles account for about 15% of Polaris's revenue, but the gross margin for the motorcycle business is less than half that of the company's off-road vehicles. Analysts say pulling Victory's sales numbers into the Indian brand is critical for Polaris to keep up production volumes and make up for the lower margins on cheaper bikes like the Scout.
Harley has lost some market share since Polaris began selling Indian bikes. Polaris's Victory and Indian motorcycles make up about 6% of the U.S. market today, compared with Harley's 50% share. Milwaukee-based Harley is renowned for big bikes that riders affectionately call "hogs," but demand is waning as baby boomers age. The company has also introduced more midsize models in recent years that can sell for less than $8,000.
"Harley knows it needs to go after younger riders," said Robin Farley, an analyst for UBS Securities. "Its core rider is aging."
A Harley spokeswoman declined to comment.
Polaris plans to introduce more midsize Indian models this year aimed at Victory customers and younger riders.
"We owe it to Victory and its die-hard fans," Polaris Chief Executive Scott Wine said in a recent conference call. "We will invest more in Indian to accelerate and expand our product introductions and innovations." Last year, Polaris added touch-screen systems to some Indian bikes for riders to access information about restaurants and gas stations along their route.
Polaris must also reaffirm its commitment to existing Indian customers after nearly 23,750 high-end models were recalled last year for a fuel-system fault that could cause an engine fire. Harley models also have been recalled in recent years. Steve Menneto, president of Polaris's motorcycle business, said he didn't expect Indian's recall to drive customers away.
Todd Gaines, co-owner of an Indian dealership in Libertyville, Ill., said customers are attracted to the brand's distinctive styling and its heritage. "They get a lot of attention on these bikes," he said.
Gabriel Rheaume, a longtime Harley rider and former Harley salesman in Tennessee, planned to buy a new hog last year before his brother suggested he check out Indian bikes. The 38-year-old ended up buying a Springfield, a large Indian bike that features side saddlebags and a windshield.
"The Indian blew me away," Mr. Rheaume said. "The power and the engine really impressed me."
Write to Bob Tita at robert.tita@wsj.com
(END) Dow Jones Newswires
February 07, 2017 07:00 ET (12:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
____________________________________
Scott is off his damn rocker and clearly is not a motorcycle enthusiast. He's a straight up business man that talks out of the side of his neck when it comes to motorcycles. I truly wish he would stop acting like he gives two turds about us. Victory riders have seen your true colors Scott, there is no going back! This coming from a Victory fan who has been listening to Scott's lip service for years. Scott no longer has my benefit of the doubt when it comes to the things he spews. That went out the window when he turned his back on everything Victory had become in 18 years of pushing the boulder up the hill.
From the article: Polaris's 2016 motorcycles sales were up 1% from 2015. But with the loss of Victory, the company expects 2017 sales to be down at least 10%. Hold the damn phone! By discontinuing Victory Polaris expects motorcycle sales to be down 10%? If that isn't a slap in the face to everything Victory had become I'm not sure what is?
At first I thought it was a good business decision, killing Victory that is. However, after reading this article and stewing on my previous thinking, I'm starting to question if it really was a good business decision. Nobody is ever going to forget what happened to our beloved brand. Of those, several will never forgive Polaris for doing it. If Polaris is counting on people that were interested in Victory bikes to help grow Indian, they best produce some RESULTS and fast! How many recalls has the entire Victory line had since the introduction of Indian? [Jack squat when compared to their other brand.] How solid was the production Freedom 106, any sump issues? [Yeah it's a loaded question.]
I believe Scott and the board of directors have positioned Polaris into a make it or break it situation when it comes to the motorcycle industry. If all of these new bikes we keep hearing about do not attract buyers (in part because they made the entire industry leery of their long term commitment) they are going to be in a world of hurt. Likely far worse off than what they would have been by keeping Victory around with a wee-bit of innovation. Only time will tell how things work out long term, but I do not have a good vibe about the short term.
Polaris Hopes New Focus Will Rev Up Motorcycle Sales
7:00 am ET February 7, 2017 (Dow Jones) Print
By Bob Tita
The race for young riders is posing a major test to Polaris Industries Inc.'s motorcycle business after years of rapid growth.
The Minnesota-based maker of snowmobiles and all-terrain vehicles emerged in 2014 as a fierce competitor to industry leader Harley-Davidson Inc. for nostalgia-prone baby boomers who want to buy motorcycles made in America. Polaris's motorcycle revenue was $708.5 million last year, up from $146 million in 2011.
But retail sales of motorcycles industrywide in the U.S. fell 2.7% in 2016, forcing both companies to work harder to entice new riders. Last month, Polaris abruptly discontinued its money-losing Victory brand to focus on its Indian line and a niche-market, three-wheel motorcycle known as the Slingshot.
Polaris's 2016 motorcycles sales were up 1% from 2015. But with the loss of Victory, the company expects 2017 sales to be down at least 10%.
Launched in the late 1990s, Victory was Polaris's first attempt at building motorcycles. The line mostly featured midsize bikes with middle-of-the-road prices. Its sales shrank after the Indian brand hit the market in 2013, but its younger customer base remains key, especially as baby boomers age. Polaris must now convert Victory buyers into Indian riders, or risk losing them to Harley.
"The gap left by Victory is an opportunity for both companies to gain share," said Trevor Young, an equity analyst at investment firm Jefferies LLC.
From the early years of the 20th century, the Indian Motorcycle Manufacturing Co. and Harley were intense competitors in a U.S. motorcycle market popularized by barnstorming racers and daredevil exhibition riders. But Springfield, Mass.-based Indian went bankrupt in 1953.
In the decades that followed, several companies tried to revive the Indian name. Polaris bought the brand from a private-equity firm in 2011 and launched the line two years later. It emphasized Indian's heritage by developing a lineup of big, powerful bikes that feature fender skirts, whitewall tires and an Indian-head-shaped running light.
While the biggest Indian models sell for close to $30,000, the best-selling bike lately is the smaller Scout. At $8,999, the low-frills bike attracts young, urban riders.
"That hit right at the early 30s-type customer who's wanted to get into riding and had some disposable income," said Nick Schittone, general manager for an Indian dealership in Austin, Texas.
Motorcycles account for about 15% of Polaris's revenue, but the gross margin for the motorcycle business is less than half that of the company's off-road vehicles. Analysts say pulling Victory's sales numbers into the Indian brand is critical for Polaris to keep up production volumes and make up for the lower margins on cheaper bikes like the Scout.
Harley has lost some market share since Polaris began selling Indian bikes. Polaris's Victory and Indian motorcycles make up about 6% of the U.S. market today, compared with Harley's 50% share. Milwaukee-based Harley is renowned for big bikes that riders affectionately call "hogs," but demand is waning as baby boomers age. The company has also introduced more midsize models in recent years that can sell for less than $8,000.
"Harley knows it needs to go after younger riders," said Robin Farley, an analyst for UBS Securities. "Its core rider is aging."
A Harley spokeswoman declined to comment.
Polaris plans to introduce more midsize Indian models this year aimed at Victory customers and younger riders.
"We owe it to Victory and its die-hard fans," Polaris Chief Executive Scott Wine said in a recent conference call. "We will invest more in Indian to accelerate and expand our product introductions and innovations." Last year, Polaris added touch-screen systems to some Indian bikes for riders to access information about restaurants and gas stations along their route.
Polaris must also reaffirm its commitment to existing Indian customers after nearly 23,750 high-end models were recalled last year for a fuel-system fault that could cause an engine fire. Harley models also have been recalled in recent years. Steve Menneto, president of Polaris's motorcycle business, said he didn't expect Indian's recall to drive customers away.
Todd Gaines, co-owner of an Indian dealership in Libertyville, Ill., said customers are attracted to the brand's distinctive styling and its heritage. "They get a lot of attention on these bikes," he said.
Gabriel Rheaume, a longtime Harley rider and former Harley salesman in Tennessee, planned to buy a new hog last year before his brother suggested he check out Indian bikes. The 38-year-old ended up buying a Springfield, a large Indian bike that features side saddlebags and a windshield.
"The Indian blew me away," Mr. Rheaume said. "The power and the engine really impressed me."
Write to Bob Tita at robert.tita@wsj.com
(END) Dow Jones Newswires
February 07, 2017 07:00 ET (12:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
____________________________________
Scott is off his damn rocker and clearly is not a motorcycle enthusiast. He's a straight up business man that talks out of the side of his neck when it comes to motorcycles. I truly wish he would stop acting like he gives two turds about us. Victory riders have seen your true colors Scott, there is no going back! This coming from a Victory fan who has been listening to Scott's lip service for years. Scott no longer has my benefit of the doubt when it comes to the things he spews. That went out the window when he turned his back on everything Victory had become in 18 years of pushing the boulder up the hill.
From the article: Polaris's 2016 motorcycles sales were up 1% from 2015. But with the loss of Victory, the company expects 2017 sales to be down at least 10%. Hold the damn phone! By discontinuing Victory Polaris expects motorcycle sales to be down 10%? If that isn't a slap in the face to everything Victory had become I'm not sure what is?
At first I thought it was a good business decision, killing Victory that is. However, after reading this article and stewing on my previous thinking, I'm starting to question if it really was a good business decision. Nobody is ever going to forget what happened to our beloved brand. Of those, several will never forgive Polaris for doing it. If Polaris is counting on people that were interested in Victory bikes to help grow Indian, they best produce some RESULTS and fast! How many recalls has the entire Victory line had since the introduction of Indian? [Jack squat when compared to their other brand.] How solid was the production Freedom 106, any sump issues? [Yeah it's a loaded question.]
I believe Scott and the board of directors have positioned Polaris into a make it or break it situation when it comes to the motorcycle industry. If all of these new bikes we keep hearing about do not attract buyers (in part because they made the entire industry leery of their long term commitment) they are going to be in a world of hurt. Likely far worse off than what they would have been by keeping Victory around with a wee-bit of innovation. Only time will tell how things work out long term, but I do not have a good vibe about the short term.