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I know upfront that this will be a controversial topic. With that said, I would like to address this issue in a straight forward manner. So, here goes:

It's no secret that the motorcycle industry is having a difficult time in this economy. "Difficult" is an understatement and "serious" could be more appropriate.

Let's face it, as I've openly stated previously, with the jobs and housing markets what they are, spending discretionary income on recreational products is not a top priority when putting food on the table, paying for the kid's education, facing rising mortgage costs and other economic factors are facing many current and potential riders. While the markets are starting to show signs of stability, typically, the recreational products sectors are the last to rebound after a recession as many folks who were barely scraping by are a bit more hesitant committing to major purchases after going through an unstable economy, job and housing market.

We already know that H-D is facing its toughest challenge ever. Considering its strong name brand recognition and loyal customer base, once the market stabilizes, I'm not too worried they will survive the current challenges and in just a few short years, could possibly emerge as strong as they were at its peak. Yes, for the next year or so, they will be building fewer bikes, closing the plant for an additional 14 weeks and laying off an additional 1,000 employees. But once they stabilize the inventory and balance the dealer's stock, my gut is telling me they could emerge as a leaner, better company. Time will tell on this prediction.

Victory is in a different situation as although they were making great inroads in the motorcycle industry before the market became unstable, they have yet to achieve the "brand awareness" of other motorcycle companies. Let's face it, Suzuki or Yamaha sell more of a specific model than Victory has sold of its entire lineup in ten years.

Victory is fortunate to be a part of multinational Polaris Industries, a publicly traded company that has a variety of divisions and income streams...including Government Sales. I can only guess that if Victory was a stand-alone company, things might be much different for them today as they might not have the backing to weather the current storm.

However, like any public company, they report to its Board of Directors and ultimately to its shareholders. The shareholders are the investors and vote their approval/disapproval by the purchasing or selling of shares of stock.

It's been stated on other posts that if Victory closes its doors today, it could add up to 30% to Polaris's bottom line profits. While I cannot verify this statement, I can state that I've owned companies that have had various divisions. If one division is under performing after giving it the proper operating capital, marketing support and time to succeed, the decision to pull the plug is not as difficult as staring at a spreadsheet that's loaded with red ink.

We've discussed here online the situation with the Dealers and there are various opinions on this topic. But now with not only one, but two bikes (Vision and Cross Country) designed for touring, having a solid Dealer Network seems to be something that should be on the front burner to insure future growth. This is akin to the "Chicken and Egg" scenario. Victory has a nice lineup, but to sell them, they need a strong network of competent and knowledgeable dealers.

In this market though, would YOU invest in a dealership that sells recreational products? I know that I would have a difficult time doing so in this day and age as even in a good market, it's a risky investment.

While the motorcycle industry will surely be around in the future, I can only wonder how much longer Polaris will give Victory before making some tough decisions that will affect all of us who frequent this site.

Those who know me already know that I don't sugar coat things. I truly do my best to call 'em as I see 'em. With that said, I think it could be productive to hear your opinions on this topic.

Will 2010 be the year that Victory has to prove itself to the world or face the consequences of being an under performing asset?

If you were running Victory, now that you have a new line of bikes to sell, what would you do?

As stated, I know this is controversial. But were all adults here and addressing situations in a straight forward manner can only help identify which way things will be headed in the future.

Many of us have a nice relationship with a specific dealer. When they return from the National Meeting, feel free to ask them their thoughts on this matter. I'm sure they got an ear full this week.
 

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Simply put, "No!"

Although many businesses are as flaky as a box of Kellogs, Polaris does not seem to be one of those companies. You have to scale back production until demand picks up, but Polaris also knows that once the economy does pick back up, so will sales.

It is not a lack of want that is bringing the recreation industry down, it is a lack of funds. Once the discretionary income returns, so will the purchases.

That being said, a company can only sustain losses for a period of time. If this recession descends into a full blown depression or last longer than 12 more months, many companies will be going down.

Although I know many suffer from Obama-mania, I am afraid with Obamanomics and the rest of the Democrats liberal agenda, this recession will porbably last much longer than it should. If Obama and company do succeed in passing the Government take over of Health Care, as they have General Motors and much of the banking industry, coupled with the rest of their 3-4 trillion dollar budget, we may be in for a very, very rough ride.
 

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Discussion Starter · #3 ·
Let's attempt to keep Politics out of the mix. While I won't say who I voted for, he is our current President. I'm not saying that I agree with the current Administration and I can only guess that my taxes will be skyrocketing in the near future. 'Nuff said on that.

The current market is what it is. The question remains, with the current conditions, will Polaris continue to fund Victory?
 

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Victory's chances would be perhaps better if their technicians (and I use the word loosely) had some clue what they were doing. I just paid over 700.00 in repairs for a machine that runs worse than when I brought it in, after being assured (lied to?) by two individuals that they had both test driven it, and that it ran better. This is a 2000 92c that I like very much, but the service department is making me wish I had purchased a Yamaha.
 

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No do or die, they are in it for the long hall. They have seen bad timesbefore. believe there will be a rebound that starts the first of 10. No crystal ball, just gut.
 

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Well, I hate to say it but a big +1 on both comments above. I usually try to stay out of politics but it is all tied together and this recession/depression is going to string out longer then I would like.
 

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Polaris/Victory will be ok as long as there are any dealers left when this is all over.
2 Dealers (not Polaris/Victory) in my area have just gone under in the last two months and they were old dealerships and a couple more look like they are in trouble.
 

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Longrider said:
Victory's chances would be perhaps better if their technicians (and I use the word loosely) had some clue what they were doing. I just paid over 700.00 in repairs for a machine that runs worse than when I brought it in, after being assured (lied to?) by two individuals that they had both test driven it, and that it ran better. This is a 2000 92c that I like very much, but the service department is making me wish I had purchased a Yamaha.
This may not have any effect on Victory as a MFG,but the dealer may suffer due to unqualified techs. I suggest you find a dealer that has better techs that know the product.
 

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No, I do not think this will be a do or die year for Polaris/Victory. I've been checking their stock ratings for the last year. They are holding there own. I like their changes for 2010. I feel that they could do more, but makingsome steps each year is ok, rather than no changes at all. I don't know how they could improve their marketability, other than making a good product and the followup with customer
satisfaction. An old school thought, but time tested everywhere.
So Andy, will you be getting a 2010 model ?
 

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Discussion Starter · #11 ·
wjoel said:
So Andy, will you be getting a 2010 model ?
Very likely. Since my riding season doesn't commence until late October (or later depending on the humidity), I have the luxury of time to check them out up close and personal.

Or, I could get a Summer home in Canada and ride there during the Summer months! (I like that idea!). My neighbors do that and they always seem to be smiling!
 

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White is a nice color for Florada but here in the north one might lose their bike until spring
 

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kramer said:
Longrider said:
Victory's chances would be perhaps better if their technicians (and I use the word loosely) had some clue what they were doing. I just paid over 700.00 in repairs for a machine that runs worse than when I brought it in, after being assured (lied to?) by two individuals that they had both test driven it, and that it ran better. This is a 2000 92c that I like very much, but the service department is making me wish I had purchased a Yamaha.
This may not have any effect on Victory as a MFG,but the dealer may suffer due to unqualified techs. I suggest you find a dealer that has better techs that know the product.
It all rolls up or down hill depending on your perspective. If you don't have the dealer support the manufacturer suffers from a lack of sales by the dealer.
 

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I don't think 2010 will be a do or die year for the Victory brand, but the next couple of years will be key. With the market down, it's a good time to make investments and inroads. I think the introduction of the Cross Roads and Cross Country are great steps in that direction. However they still need to keep their production and dealer costs low (really lower them somehow) so that savings can be passed on to the consumer. As you said discretionary spending on recreational vehicles isn't high on a lot of peoples budgets right now, especially in an area like here in Minnesota where we have such a short riding season. Also that discretionary money for a rec vehicle is competing against itself. For example, if I am going to buy something, do I get a new Polaris Sportsman for 7k or a new Vic for 17k? I chose a motorcycle but that ATV sure looked nice! It's a good time to take some risk and get the brand out there more but whether the Polaris board and shareholders are willing to take that risk and for how long remains to be seen.
 

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I do believe it is a do or die year for them. The stock reportlooks good because of the 23% jump in snowmobile sales and the undisclosed jump in ATV sale to the military. But lets look at it from a pure number perspective... Victory averages probablyaroundthen 5000 bikes a year (we know this because number 50,000was to made it out of the plant this year). The first quarter showed a 52% decline and the second quarter showed 55% decline. These declines are based on the previous year which wasn't to good. If the decline stay about the same you are roughly 50% under in sales. Leaving you with maybe 2400 units moving to your then 300 dealers. This means a whopping 8 units per dealer? How are these single line Victory dealers supposed to keep their doors open? Why would a multi line dealer want to invest the time or money for 8 units.
I understand some dealers are selling well but some dealers are not selling anything at all. If Victory as a manufacturer wants to remain viable they are going to have to do something with distribution to get the product out there because I have I funny feeling after this dealer meeting there are going to be a few less dealers....
 

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kramer said:
Longrider said:
Victory's chances would be perhaps better if their technicians (and I use the word loosely) had some clue what they were doing. I just paid over 700.00 in repairs for a machine that runs worse than when I brought it in, after being assured (lied to?) by two individuals that they had both test driven it, and that it ran better. This is a 2000 92c that I like very much, but the service department is making me wish I had purchased a Yamaha.
This may not have any effect on Victory as a MFG,but the dealer may suffer due to unqualified techs. I suggest you find a dealer that has better techs that know the product.
But if enough prospective buyers do their homework and research forums and read about poser "techs" and the failing of dealers added to Victory's very blatant ignoring customer's requests for rectifying the problems that dealers seemingly can't then those prospective buyers will look at other brands. Just my opinion.
 

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If I was running Polaris it is simple. I would shut down the Victory line. Then I would increase profits to the bottom line of Polaris. I would get to keep my job for a few more years andI looked good to my share holders. You might not like that but thats what I think.
The good news is I dont run Polaris I just ride a Victory. I personally think Victory is in it for the long haul.I am not sure about the rest of the dealersbut my local dealer sells Victory, Snowmobiles, ATV's and Rangers.I thinkPolaris looks at Victory as part of the over all picture. They keep putting money intodevelopment as well just look at the 2010 line up. They spent a boat load of money on the Vision getting it going I am sure.
There also comes a time when the bottom line matters. I do think the next 2 years will tell the tail. If economy picks up we will have Victory. If this economy does any worse and keeps getting worse. I think Victory will be gone at some point.
When it comesdown to it the bottom line is wht matters to share holders and at some point they say make up money or shut it down.
Didnt Polaris sell water crafts? where did they go?
 

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i fear more the loss of dealers than I do the brand going away. I have no way of knowing if the brand is profitable or not but it has seen growth every year until the downfall of the economy. I know my favorite local dealer is doing ok, not great but ok. I don't think they will ever be a mainstream brand like HD, Honda or Kawasaki but I do think they'll continue to make bikes, continue to expand and offer up some product.

We do know that they do listen us the end users but things we see come out every year that we ask for. The Cross Town and Cross Country will bring in some geezer gliders from the other brands as well that the funky looking Vision couldn't.

I think they'll do just fine once they weather this storm.
 

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Polaris is a large multi-national company that is not going to scrap their long term plans for a short term problem.
Yes, in the future, afterthe economy startsto grow again,we may have less to spend on recreational vehicles. This due to an obvious attack on our way of living, taking property from one group of people and giving it to another group is wrong and will only hurt Americans, which in turn will only hurt the global economy.
Well managed, large corporations do well in the recovery process after a recession. They down-size their least valuable assets, reduce benefits, acquire capital equipment at severe discounts, lure talent from venerable companies, etc.
With the new "On-Road" division, it's apparent there isa larger plan for Polaris that goes well beyond a few quarters in the red.
 
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