“While the final decision was made quickly, it was not one taken lightly”, Menneto told International Dealer News.
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| Polaris President of Motorcycle Operations Steve Menneto: “In strategic terms, in understanding where the Victory brand could play without competing against Indian, we thought we had that” |
“After 18 years and well over 100,000 motorcycles made and sold, we were clearly going to take great care in considering the Victory brand’s future, but in the end the market challenges and responsibilities to our stake holders dictated that there really was no alternate option.
“No buyers were available for the brand, so a reluctant end to Victory production was the only logical step available to us. The brand only made money in three of its 18 years, and the ‘Freedom’ engine is now 20 years old, so Victory would have required considerable engineering investment in coming years. Challenges, such as Euro 4 emissions, made further considerable investments inevitable.
“It is no secret that the new motorcycle market is tough here in the United States at this time, and we have to look at where the best return on capital invested can be found – we have to be diligent in protecting the best interests of our stake holders, our dealers and our employees.
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| The challenges of meeting Euro 4 regulations were among the capital intensive issues faced by Victory |
“We can make better investment returns in a tough market by deploying all available capital into the excellent prospects that Indian Motorcycle represents for us, so in the end market conditions made it one of the simplest of tough decisions.
“While we had clear strategic thinking for a pathway for Victory on a five to ten year basis, generating the capital needed and carrying the losses in a down market just was not something that we could continue to do”, said Menneto.
In those 18 years Polaris has made and sold “substantially” over 100,000 Victory motorcycles, but only sold more than 10,000 units in a year a couple of times.
“In strategic terms, in understanding where the Victory brand could play without competing against Indian, we thought we had that. But the issue remained whether or not there would have been enough customers available to the brand in the timescale needed, and that has proven to be a far less certain part of the equation.
It was Menneto, along with CEO Scott Wine, who persuaded the Polaris Board to acquire the Indian brand from British investor Stephen Julius’ Kings Mountain, North Carolina Stellican operation in 2011. Menneto agrees that, to a large part, it was Victory that gave Polaris the confidence to invest in Indian. “Yes, no question, leveraging our experience with Victory is what gave us the platform to invest in Indian. Without having already had more than a decade in the motorcycle business, I’m not sure we’d have felt quite as confident about buying Indian”, Menneto said.
“It was Victory that gave us the production, engineering and dealer development experience needed, and that experience will be a gift that we expect will keep giving for decades to come”.
In terms of dealer policy, Polaris presently has some 300 to 350 dealerships, and 25 percent of its motorcycle business is international. Menneto says that the company hopes to double its dealership base in the next 3 to 5 years and sees international sales and platform diversification as mission critical.
