Polaris announces end of Victory Motorcycle line

Tuesday, January 10, 2017
Pictured is the full 2016 Victory Motorcycle lineup. Polaris officials on Monday announced plans to end production of the product line. The motorcycles were manufactured in Spirit Lake, and the local workforce will be reduced as a result of the decision.
(File photo)

SPIRIT LAKE — Local economic development officials say Monday’s announcement by Polaris Industries to eliminate the Victory line of motorcycles caught them off guard.

Polaris plans to “immediately begin winding down” its 18-year-old brand and Victory operations in Spearfish, South Dakota, and Spirit Lake.

The company will continue to manufacture Indian Motorcycles in the Iowa Great Lakes.

“This was an incredibly difficult decision for me, my team and the Polaris Board of Directors,” said Polaris Industries Chairman and CEO Scott Wine. “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.”

A smaller Spirit Lake workforce is expected, according to Megan Kathman, a senior account executive at Skyya Communications. She said Polaris will eliminate temporary positions and use attrition to address reductions. Kathman’s Eden Prairie, Minnesota, firm handles public relations for Indian Motorcycles in addition to some Polaris corporate work.

“Polaris is still committed to maintaining that presence, and we’re going to refocus our resource and manufacturing capability in Spirit Lake — on solely Indian Motorcycle,” she said. “We’re going to be focusing on the Indian Motorcycle brand and growing that brand.”

Polaris officials announced the acquisition of the then-110-year-old Indian motorcycle line in April of 2011. The company closed the Indian manufacturing facility in King’s Mountain, North Carolina as part of the process.

Final assembly of Indian Motorcycles was moved to Spirit Lake, where the workforce of about 700 employees also produced Victory motorcycles at the time.

“The experience, knowledge, infrastructure and capability we’ve built in those 18 years gave us the confidence to acquire and develop the Indian Motorcycle brand, so I would like to express my gratitude to everyone associated with Victory Motorcycles and celebrate your many contributions,” Wine said in Monday’s statement from the company.

Polaris said Victory has struggled to establish the market share needed to be profitable. Polaris officials also like the strong performance and growth potential of its Indian line.

Kathman said Polaris would not release the number of people who work on the Victory Motorcycle line in Spirit Lake. The company also declined to say how many local jobs would be eliminated in light of Monday’s decision.

Spirit Lake employees were notified at the start of the day on Monday.

“We’re certainly hoping and praying that any negative impact is very minor,” Iowa Lakes Corridor Development Corporation President and CEO Kiley Miller said. “From the Corridor’s standpoint, this demonstrates the importance of having a strong, diversified economy — like the one you have in Dickinson County — with a focus on entrepreneurship and small and midsized businesses to create economic resilience.”

Polaris said it will assist dealers in liquidating existing Victory inventories. Parts will be supplied for a period of 10 years. The company also plans to provide service and warranty coverage to Victory dealers and owners.

The decision to end Victory production comes less than five years after Polaris confirmed plans to invest $22.5 million in an expansion at the 565,000-square-foot Polaris manufacturing facility in Spirit Lake. The need for an additional Victory Motorcycle assembly line was part of the September 2012 plans.

The Iowa Economic Development Authority awarded tax benefits and $395,000 in direct financial assistance to Polaris at the time. The company planned to add 79 jobs in exchange for the incentives.

Work on the multi-million-dollar expansion has continued at the site near the intersection of Iowa Highway 9 and U.S. Highway 71.

Polaris revived the Indian brand of motorcycles in 2013 with three models. Indian sales have been strong, but the brand remains well behind industry leader Harley-Davidson. In 2014, the

Minneapolis-based company expanded its Indian line of motorcycles to include the lighter, less-expensive Scout.

Indian has been marketed as the “heritage” motorcycle with generations of riders who have a connection to the brand’s history. Victory motorcycles, in contrast, were designed to appeal to riders looking for better lean angles, more aggressive engine packages, longer-distance capability, more heft and more storage capacity.

“This move allows us to optimize and align our resources behind both our premium, high performing Indian Motorcycle brand and our innovative Slingshot brand,” Wine said.

Kathman said the Victory phase-out in Spirit Lake will be an 18-month process.


Investor information

(AP) — Polaris said it lost money on Victory in three of the past five years after sales of the heavyweight motorcycles peaked in 2012. The brand represented only about 3 percent of Polaris’ total sales.

Jefferies analyst Trevor Young said Monday’s decision to discontinue Victory Motorcycles was a surprise, but it will likely help Indian Motorcycle sales. The Indian brand is second only to Harley-Davidson in the market.

“Over the medium-term, we think this is a positive, as it appears Polaris is doubling down on Indian,” Young said in a research note.

The company will detail its profit outlook for the year when it releases its fourth-quarter earnings report on Jan. 24.

UBS analyst Robin Farley noted the move will eliminate an American motorcycle brand, but Harley-Davidson may not be able to take advantage of it because its customer base is aging and Indian Motorcycle has been gaining market share.

About 400 dealers nationwide sold Victory motorcycles. About 150 of those also sell Indian motorcycles.

In addition to motorcycles, Polaris makes ATVs, snowmobiles, the three-wheeled Slingshot roadster and other vehicles. The company’s Slingshot roadsters are made in Huntsville, Alabama.

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