Polaris 2006 Annual Report Download - page 6

PAGE 2 2006 POLARIS INDUSTRIES INC. ANNUAL REPORT
TAKING VICTORY
TO THE NEXT LEVEL
The new 2008 model year Victory Vision™ is our
most researched product line in company history.
We rode 30,000 miles on competitor bikes, spent
hundreds of hours in focus groups and talked with
riders one-on-one. The result? We focused where
it matters most—on comfort and style. The Victory
Vision is the most progressive line of American luxury-
touring bikes ever built. From the thunderous V-Twin
engine to the breakthrough styling and unmatched
comfort, Victory Vision totally redefines what it means
to be an American Motorcycle and delivers on the raw
passion riders have come to expect from Victory—
the New American Motorcycle Company.
Our product quality and performance have
been the primary drivers. With an expanded
product offering in 2007, we expect the
RANGER business to continue to perform well.
The Victory motorcycle division also had a
great year in 2006. While the overall market
for motorcycles sold in the United States hit
another all-time record, Victory retail sales
grew by more than ten times the overall market.
We are now the second-largest American
manufacturer of motorcycles. In 2006,
we marked the first full year of profitability
for our Victory business, and we expect that
performance to accelerate in 2007 and
beyond. Extremely high customer satisfaction
and positive word-of-mouth referrals are two
important drivers of Victory’s success.
Our financial services business also had a
great year. We accelerated our efforts selling
into the military market, and our overall
product quality improved. So there were some
significant positives.
But the disappointments outweighed the wins
in 2006. In two of our businesses, snowmobiles
and ATVs, things were tough. In both cases,
the overall markets were down and we lost
market share. We were not competitive enough
in either market. In ATVs, we did not correctly
forecast the magnitude of the market softness.
SEGMENT: Luxury touring (bagger), designed
for comfortable long-distance riding, with amenities
such as cruise control, saddlebags and top-notch
sound systems
TARGET AUDIENCE: 50-year-old (average age),
seasoned rider with time and a passion for long-
distance motorcycle touring
COMPETITORS: BMW, Harley-Davidson, Honda
POLARIS DIFFERENTIATORS: Unprecedented comfort
and styling for riders who want a fresh take on
American-made
2006 U.S. TOURING MARKET OPPORTUNITY
Unit Volume 3-year Compounded
Annual Growth Rate
Soft-bag Touring 43,000 – 7%
Hard-bag Touring 61,000 +21%
Luxury Touring 64,000 + 9%
Total 168,000 + 7%
Average industry selling price is $19,000, which translates to $3 billion in market opportunity
for touring. In addition, related apparel and accessories for motorcycle touring will be available.
Victory Vision Tour™
Victory Vision Street™