Indian’s New Chiefs

Polaris buys an American original

After miraculously surviving five ill-fated resurrections since its initial demise in 1953, America’s original motorcycle brand has found a more worthy and hopefully permanent home. Polaris Industries, Inc.—makers of Victory motorcycles, popular four-wheel off-roaders, snowmobiles and other specialty vehicles—acquired the King’s Mountain, North Carolina -based business from British private-equity firms Stellican Limited and Novator Partners LLP for an undisclosed sum last April.

Why Polaris? Only a handful of companies have the right mix of engineering, manufacturing and market resources to make Indian competitive again, and most of them would only be biting into their own customer base. Polaris has a different take: Heading into its 12th model year, the firm’s Victory lineup trades on performance, originality and bang per cubic buck. Meanwhile, Indian is all about history and heritage. Mark Blackwell, Vice President of Polaris Motorcycles, sees it this way: “Victory is the New American Motorcycle, appealing more to enthusiasts than die-hard bikers, while Indian appeals to the other end of the spectrum.” Would that make it the Old American Motorcycle? Blackwell calls it a bookend strategy, with Victory and Indian at opposite ends of the Polaris shelf. Both are relatively small players in the big picture. Separately, each brand has its weaknesses. But together, Polaris will own a much bigger slice of the cruiser/tourer pie.

Yeah, but … Indian? Selling for $25,000 to $37,000 apiece, about 1000 bikes have rolled out of the King’s Mountain works since 2008—a drop in the proverbial bucket compared to the 210,500 bikes Harley-Davidson shipped last year in a sour market. But Polaris brass sees potential beyond those numbers. Blackwell says they’ve been keeping an eye on America’s unsinkable motorcycle for years. “We’ve always known Indian was an important name; the only one that can be used in the same sentence as Harley-Davidson. Most anyone you meet knows Indian was the first American motorcycle, and a formidable competitor for Harley in the first half of the last century. We’ve always been blown away by just how strong the brand is, despite all the challenges it’s faced over the years. Polaris has been looking at ways to have a broader, global motorcycle business for at least the last 10 years, either through organic expansion—designing and launching additional motorcycles—an alliance with some other manufacturer or some sort of acquisition. This is a big step in that direction.”

When can you buy one? What will they look like? Aside from the fact that Indian will be run as a separate entity, Blackwell says those questions are waiting for the right answers. “Will it be two years or three years before the next-generation Indians show up? I don’t know yet, but I do know what Scott Wine, our CEO (see sidebar), made clear to all of us: We’re not going to rush this and screw it up. Current Indians hit the center of the bull’s-eye for that target customer, but we think the products are priced way too high to appeal to enough people. Are we going to try and make Indians with the best suspension or the most horsepower? Probably not. Victory is at that end of the spectrum. The trick will be to protect the goodness in past and present Indian designs while doing everything necessary to bring quality up and reduce the cost so more people can afford one. We can’t slap Indian logos on a Victory and think we’re fooling anybody. But we also want to make the next generation of Indian motorcycles more affordable, higher quality and even better products.”

How do you pay for all that? Record net income in the first quarter of 2011 helps. “We’re a public company,” Blackwell adds, “and our shareholders want a return on their investment. But because the company is doing so well, we can afford to take the long view on big ideas. We’ve been working at this with Victory for 12 years. Every day I’m reminded of just how hard it is to build a brand from scratch.”

Considering how far Victory has come in a dozen years and the corporate horsepower Polaris is capable of putting behind its newest/oldest motorcycle brand, the one-two punch gaining momentum in Medina, Minnesota, has to be making some people in Milwaukee and elsewhere a little nervous.

Nobody is saying what next-generation Indians will look like, but Polaris is aiming to build a higher quality, less expensive version that carries on 110 years of history and heritage.
Indian production will move to Polaris’ 225,000 square-foot Spirit Lake manufacturing facility in Northwestern Iowa, where Victory motorcycles have been built since 1998.
Indian’s current Kings Mountain, North Carolina headquarters are being shut down. Expect the revitalized brand to expand its dealer network beyond the current 30 outlets under Polaris.
Nobody is saying what next-generation Indians will look like, but Polaris is aiming to build a higher quality, less expensive version that carries on 110 years of history and heritage.