Polaris announces major shift in motorcycle lines
Minnesota-based Polaris is shaking up the motorcycle world.
The company announced Monday that it will immediately begin winding down production of the Victory Motorcycles brand.
"This was an incredibly difficult decision for me, my team and the Polaris Board of Directors," said Polaris Industries Chairman and CEO Scott Wine in a statement Monday. "Over the past 18 years, we have invested not only resources, but our hearts and souls, into forging the Victory Motorcycles brand, and we are exceptionally proud of what our team has accomplished."
While the news comes as a bit of a surprise to consumers and Victory fans, it didn't seem to surprise too many on Wall Street.
The Star Tribune notes that sales of Victory motorcycles peaked in 2012, and according to UBS Investment Analyst Robin Farley, Victory represented just 3 percent of total Polaris sales last year.
On the other hand, Polaris' Indian Motorcycle has remained strong – so the company will focus on continuing to grow that brand.
Growth of Indian Motorcycles
How strong have sales of the Polaris Indian been? According to an April report from FOX Business, North American sales of the Indian surged more than 50 percent during the first quarter of 2016.
That growth came at a time when industry sales were roughly flat.
It doesn't appear to be a fluke either.
Since Polaris re-launched the Indian line in 2011 the company's total revenues have jumped 47 percent to $4.7 billion. Motorcycle sales have jumped from accounting for 8 percent of company's total sales to 15 percent, while quadrupling to $698 million annually.
"This decision will improve the profitability of Polaris and our global motorcycle business, and will materially improve our competitive stance in the industry," said Wine Monday. "Our focus is on profitable growth and in an environment of finite resources, this move allows us to optimize and align our resources behind both our premium, high performing Indian Motorcycle brand and our innovative Slingshot brand."
The changes do come at a tough time for Polaris, the company has battled recalls in four wheel ATVs and Indian Motorcycles because of a potential fire risk.
