Polaris says it plans to expand its pilot Maximum Velocity Program (MVP) to more dealers in 2009. Introduced last year to 175 select dealers in an effort to improve Polaris’ relations with its retailers, MVP emphasizes retail sales rather than wholesale fulfillment.
Dealers using MVP place orders twice a month versus the previous twice a year – a shorter order cycle Polaris says allow the OEM to respond quickly to market changes and trends while allowing retailers to achieve profitability with much lower levels of inventory.
“Our MVP test with our dealer network, which is essentially a new way to do business in powersports, continues to perform to our expectations,” says Bennett Morgan, president and COO, Polaris Industries.
To quickly adapt to swings in demand and accommodate a faster product turnaround, Polaris reduced supplier lead time on components, and produces mixed models on the assembly line thanks to its flexible manufacturing capability — the design of vehicles with common platforms and processes that makes it easier to alter assembly schedules.
Polaris targeted the MVP program to retailers in areas where the OEM has had a lesser impact. Dealers in the New England area were the first to be tapped.
“This was a thing that was developed between the corporation and dealer council,” says David Burgess, principal of Full Throttle Motorsports, Inc. in Lansing, Mich. While Burgess does not yet take part in the pilot program, he is one of 17 retailers who make up the Polaris Dealer Advisory Council, a group that worked with the OEM on formulating the MVP.
“This was a thing that was developed between Polaris and the Dealer Council to benefit the corporation and its dealer base, so that Polaris would be able to produce inventory that would be more to the demand of the marketplace,” Burgess tells Dealernews.
“I’m very comfortable with their program, even without MVP. Nevertheless, I think MVP is going to happen regardless. There are some very good attributes to the program that I think will be good for everybody – for the dealers and for the manufacturer. From that aspect – since I was involved in putting this thing together – I’m for it.
“It’s no secret that, in past years, there was some animosity between some dealers over the aggressive approach to inventory levels that (the OEM) required stores to carry. In some degree, that disengaged some of the dealers, and sometimes increased their cost of doing business, so I think that having this approach will bring more dealers into the fold, and therefore increase penetration into the marketplace in those areas where they had dealers that were not as engaged.”
“As is the case with most tests, we are learning very rapidly,” Morgan says. “Our internal process improvements on MVP continue and we remain optimistic that we will expand this program further in 2009.”
Polaris supplies about 1,500 off-road dealers, 800 snowmobile dealers, 315 Victory dealers and 1,500 parts, garments and accessories dealers. About 17 percent of the OEM’s North American sales volume is currently generated through the 175 dealers participating in MVP.
—Submitted by Guido Ebert