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January 27, 2013

Polari to inject new life into Indian motorcycles


Mark Smith, senior research analyst at Feltl & Co. in Minneapolis, said Polaris’ engineers spent big to develop the right engine roar for its new take on the 1901 American classic.

“They have rooms full of special equipment and sound studios where they tuned and tweaked and tested to get the sound just right,” Smith said. “You think of Harley-Davidson, and you immediately get that key piece of recognition because of the engine sound. (With Polaris’ Indian), they certainly need that same feeling of wonder.”

Hundreds of the new 2014 bikes are expected to emerge this fall, thanks to hundreds of Polaris engineers in Wyoming, Minn.; engine builders in Osceola, Wis.; and production workers in Spirit Lake, Iowa. Polaris will make both its Victory motorcycle, a brand it built over 10 years, and the Indian in the same plant.

In buying Indian, Polaris instantly gained an established, well-loved brand that could sell well right out of the starting gate. Indian will be built on two of its own production lines in Spirit Lake.

“With Indian, you have this great, upscale brand,” said Smith, the research analyst at Feltl & Co. “It’s been undercapitalized for decades. Now (under the wing of the $3 billion Polaris), one has the chance to dump the capital and the R&D it deserves into the Indian name. ... I think it’s really exciting.”

With Indian, Polaris has “something where they can go after that high-end consumer. With Indian, there is a lot of brand equity.”

Menneto wants to have 150 Indian dealers set up across the United States and Canada by year end 2014. And he wants about $375 million in annual sales in five to seven years.

It’s a tall order. There are just 14 Indian dealers today. Only 100 of the 2013 Indian models will be made and sold. So a lot is riding on the 2014 redesign and production ramp-up.

To understand the aggressive nature of Polaris’ goals, consider that in 2011, Polaris’s entire “on-road” division — mostly Victory motorcycles and electric vehicles — generated $146 million in sales. Forecasts call for 60 percent growth in 2012. And Menneto predicts $750 million in combined Victory and Indian sales in five to seven years.

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