Indian drives big quarter, year for Polaris, execs say

Publish Date: 
Jan 28, 2014
By Vince Guerrieri

MINNEAPOLIS -- The reborn Indian Motorcycle brand has translated into buzz and improved sales for parent company Polaris in a record-breaking fourth quarter, company executives said Tuesday.

Polaris Chairman and CEO Scott Wine said the company  has seen growth in all segments of the market as it broke $1 billion in sales for the quarter. Wine tempered expectations, but anticipates Indian and Victory motorcycles leading the way in the next year.

“Polaris is not going to grow to the moon, and we do not expect growth to always continue this slope,” he said.

With a 10 percent growth rate, the company is outpacing a 7 percent industry-wide growth rate in retail sales, said President and COO Bennett Morgan. Motorcycle sales lead the increase, up 94 percent due to the new Indian line. The company introduced three new models in August: the Chief Classic, Chief Vintage and Chieftain. The Indian line has been introduced to abundant positive reaction for satisfaction and quality, Morgan said.

Morgan also said that interest in Indian has also brought a pickup in sales for Victory. A total of 140 dealers have been signed up in North America to carry the Indian line, and about 60 are already selling the motorcycles, Morgan said; he anticipates sales figures could increase as well. Another 70 dealers are signed up outside of North America, and the Spirit Lake, Iowa, factory where Indian vehicles are made is expanding production.

“We have plenty of reasons to be bullish,” he said. “We are poised for another strong year in motorcycle growth.”

Retail sales and market share were up for off-road vehicles due to high demand for the Ranger and RZR. Morgan said sales figures don’t take into account the 2014 models that have started to ship as well.

For the fourth quarter, the North American off-road unit retail sales were up mid-single digits percent from the comparable 2012 quarter, with consumer purchases of side-by-side vehicles up high-single digits percent and ATV retail sales up low-single digits percent for the 2013 fourth quarter, the company said. Polaris gained market share in ATVs during the quarter, but estimates that its market share in side-by-sides was "flattish as several competitors became significantly more aggressive in product introductions and promotions during the 2013 fourth quarter."

Snowmobile sales declined in the quarter but increased 7 percent for the year. Morgan anticipates a lot of interest in 2015 models, which will be introduced later this year to commemorate the company’s 60th year in the snowmobile business.

And in PG&A, Polaris had record sales in the fourth quarter, more than 15 percent gains in all categories year-over-year. Polaris bought Klim in the fourth quarter of 2012, which had a positive impact on PG&A for motorcycles and snowmobiles.

Despite the growth, Polaris executives believe they left money on the table in 2013, and must improve in the years to come. Morgan said among the plans for 2014 is a commercial sales force to make business-to-business sales.

“We see significant missed opportunities,” Morgan said.

Overall, the company has achieved its goal of net income at 10 percent of sales earlier than expected, and are still targeting $8 billion in annual sales and $800 million in net income by 2020.

Polaris declared a 48-cent dividend for stockholders Jan. 30.